SYNETIC INC, 10-K, 1995-09-28

SYNETIC INC
10-K, 1995-09-28
DRUG STORES AND PROPRIETARY STORES

Previous: WARBURG PINCUS INTERNATIONAL EQUITY FUND /PA/, 485BPOS, 1995-09-28

Next: SMITH CORONA CORP, 10-K, 1995-09-28

<PAGE>

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1995

Commission file number 0-17822

SYNETIC, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 22-2975182
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

669 RIVER DRIVE
ELMWOOD PARK, NEW JERSEY 07407-1361
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (201) 703-3400

Securities registered pursuant to Section 12(b) of the Act:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
NONE

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, $.01 PAR VALUE
(Title of Class)

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, and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of the registrant's voting stock (based on
the last sale price of registrant's voting stock on the NASDAQ National Market
System on September 15, 1995, and for the purpose of this computation only, the
assumption that all of the registrant's directors and executive officers are
affiliates) held by non-affiliates of the registrant was approximately
$279,097,290.

The number of shares of registrant's Common Stock, $.01 par
value, outstanding at September 15, 1995 was 16,648,096.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information in the Registrant's definitive proxy statement to
be filed with the Securities and Exchange Commission relating to the Company's
1995 Annual Meeting of Stockholders is incorporated by reference into Part III
hereof.

================================================================================
<PAGE>

PART I

ITEM 1. BUSINESS.

INTRODUCTION

The Company is a Delaware corporation and was incorporated in 1989. The
Company's principal offices are located at 669 River Drive, Elmwood Park, New
Jersey 07407, and its telephone number is (201) 703-3400. As used herein, the
"Company" means Synetic, Inc. and its subsidiaries, except where the context
otherwise requires.

Porex Technologies Corp. (together with its subsidiaries, "Porex"), a
wholly owned subsidiary of the Company, designs, manufactures and distributes
porous and solid plastic components and products used in health care,
industrial and consumer applications. Porex's principal products, which
incorporate porous plastics, are used to filter, drain, vent or control the
flow of fluids or gases. A large percentage of Porex's products are sold to
other manufacturers for incorporation into their products. See "--Porex".

Prior to June 28, 1989, the date of the initial public offering of the
Company, the Company was an indirect wholly owned subsidiary of Medco
Containment Services, Inc. ("Medco"). Thereafter, the Company became a
publicly held, partially owned subsidiary of Medco. Medco provides health
care cost containment services, principally managed prescription drug
programs, to benefit plan sponsors. On November 18, 1993, Medco was acquired
by Merck & Co., Inc. ("Merck") in a merger transaction (the "Merck/Medco
Merger"), and as a result, the Company became an indirect, partially owned
subsidiary of Merck. Merck is a worldwide organization engaged primarily in
the business of discovering, developing, producing and marketing products and
services for the treatment of disease and the maintenance or restoration of
health. Until December 14, 1994, the Company's operations consisted of Porex
and a group of subsidiaries that provided institutional pharmacy services (the
"Institutional Pharmacies Business").

On December 14, 1994, the Company consummated certain transactions
pursuant to which: (1) the Company sold the Institutional Pharmacies Business
to Pharmacy Corporation of America ("PCA"), an indirect wholly owned
subsidiary of Beverly Enterprises, Inc. ("Beverly") (such sale is referred to
herein as the "Divestiture"), for approximately $107,300,000 in cash, subject
to certain post-closing adjustments; (2) the Company purchased 5,268,463
shares of its common stock, par value $.01 per share ("Common Stock") from
Merck for an aggregate purchase price of $35,778,088, subject to certain post-
closing adjustments; and (3) SN Investors, L.P. ("SN Investors"), a limited
partnership the general partner of which is SYNC, Inc. (the "General
Partner"), whose sole stockholder is Mr. Martin J. Wygod, Chairman of the
Board of the Company, purchased 5,061,857 shares of Common Stock from Merck
for an aggregate purchase price of $34,375,029, subject to certain post-
closing adjustments, pursuant to an assignment by the Company of the right to
purchase such shares from Merck. The purchases of shares of Common Stock from
Merck by the Company and SN Investors are hereinafter referred to as the
"Purchase." The shares of Common Stock purchased by the Company are being
held as treasury shares and are no longer outstanding or entitled to vote.
The Company's purpose in entering into the Purchase was to acquire a
significant portion of its Common Stock on terms it believed to be in the
interests of its public stockholders and to structure the Company as an
independent public company with the benefit of Mr. Wygod's association as a
significant investor. Merck required the consummation of the Divestiture as a
condition to the Purchase.
<PAGE>

Immediately prior to the consummation of the Purchase, Merck owned
approximately 58% of the issued and outstanding Common Stock. As a result of
the consummation of the Purchase, Mr. Wygod and SN Investors own, as of
September 1, 1995, an aggregate of approximately 31.5% of the outstanding
Common Stock and Merck no longer owns an equity interest in the Company.

The Company intends to pursue an acquisition program pursuant to which it
will seek to effect one or more acquisitions of or business combinations with
businesses that the Company believes have significant growth potential. The
Company intends initially to concentrate its acquisition efforts in the health
care industry but such emphasis would not limit in any manner its ability to
pursue acquisition opportunities in other industries. The Company's
acquisition program could result in a substantial change in the business,
operations and financial condition of the Company. The Company has not yet
entered into any agreement or understanding with a prospective acquisition
candidate. No assurance can be given that the Company will succeed in
consummating any acquisitions or that the Company will be able to successfully
manage or integrate any business that it acquires. The future growth of the
Company will depend primarily on its ability to consummate one or more such
acquisitions and to operate such businesses successfully. See "--Acquisition
Program".

As a result of the Divestiture, a significant portion of the Company's
assets are invested in short-term, interest-bearing investment grade
securities pending use in operations and for acquisitions. The nature of
these securities could under certain circumstances result in the Company being
deemed an investment company under the Investment Company Act of 1940 (the
"Investment Company Act"). The Investment Company Act requires registration
of, and imposes substantial restrictions on, any company that is, or holds
itself out as being, engaged primarily, or proposes to engage primarily in the
business of investing, reinvesting, or trading in securities, or any company
that engages, or proposes to engage in the business of investing, reinvesting,
owning, holding or trading in securities and which has a certain percentage of
its total assets invested in, and of its net income derived from, certain
types of securities. The Company intends to structure its investments and
acquisition program so as to avoid application of the Investment Company Act
and, if necessary, will apply to the Commission for an exemption from the
Investment Company Act.

POREX

GENERAL

Porex Technologies Corp., a wholly owned subsidiary of the Company,
designs, manufactures and distributes porous and solid plastic components and
products used in health care, industrial and consumer applications. Porex's
principal products, which incorporate porous plastics, are used to filter,
drain, diffuse, vent or control the flow of fluids or gases. A large
percentage of Porex's products are sold to other manufacturers for
incorporation into their products.

Porex's health care products include proprietary products manufactured
and sold under Porex's trade names. These products are sold for clinical and
medical/surgical use in hospitals, clinics, physicians' offices and
laboratories. Porex also manufactures and sells a line of plastic vials and
produces components made to the specifications of original equipment
manufacturers ("OEMs") for incorporation into their health care products.
Porex's industrial and consumer products consist primarily of custom-
manufactured components made for manufacturers of industrial and consumer
products. The Company believes Porex's principal strengths to be its
manufacturing processes, quality control and relationships with distributors
of its proprietary health care products.

Porous plastics are permeable plastic structures having omni-directional
(i.e., porous in all directions to the flow of fluids or gases)
interconnecting pores. Porous plastics are manufactured by Porex with pore
sizes between approximately 10 and 500 micrometers (one micrometer is equal to
one-millionth of a meter; an object of 40 micrometers in size is about as
small as can be discerned by the naked eye). Porous plastic materials can be
molded from several thermoplastic raw materials and are produced by Porex at
its own manufacturing facilities as
<PAGE>

fabricated devices, custom-molded shapes, sheets, tubes or rods depending on
proprietary application or manufacturer specifications. Porex also purchases
for resale through its distribution channels certain products which are
complementary to its manufactured product lines.

Porex has an injection molding facility which produces solid plastic
products for health care, consumer and industrial applications.

HEALTH CARE PRODUCTS

Porex's proprietary products for clinical and surgical applications
include blood serum filters, blood tube closure devices and a line of
medical/surgical products designed primarily for use in plastic and
reconstructive surgery and maxillofacial surgery. Porex also manufactures and
sells a line of plastic vials and produces components for incorporation into
health care products made by OEMs.

BLOOD SERUM FILTERS AND RELATED PRODUCTS. Porex's blood serum filters
are used to separate microscopic particles and fibrous matter (fibrin) from
centrifuged blood serum to prevent clogging of automated laboratory chemical
analysis equipment. The filters allow the serum to pass through while
blocking passage of particulate materials. Analysis of the serum provides
specific information as to a patient's health. Porex also manufactures a line
of closure devices that are used with blood serum filters and tubes.

In response to health concerns regarding the handling of human blood, new
blood testing equipment is being developed which may not require filtered
blood serum for analysis, or which may eliminate the need for handling of
blood serum by medical personnel. Increased use of such new equipment may
have an adverse impact on sales of Porex's current line of blood serum
filters.

SURGICAL PRODUCTS. Porex's surgical products are marketed primarily to
surgeons who specialize in plastic and reconstructive surgery and
maxillofacial surgery. The product line includes MEDPOR(R) Surgical Implant
material, which is polymeric biomaterial used for craniofacial reconstruction
and augmentation, tissue expanders and TLS(R) Surgical Drainage Systems for
small wound sites. Porex also markets TLS(TM) Surgical Marker pens to mark the
areas of proposed surgical incision. Porex manufactures MEDPOR(R) Surgical
Implant material and distributes, and in some cases assembles, the other items
in its surgical product line.

OEM MEDICAL PRODUCTS. Porex manufactures various porous plastic
components that it sells to other health care product manufacturers for
incorporation into their finished products. These porous plastics are used to
vent or diffuse gases or fluids and are used as membrane supports in other
manufacturers' products. The components include (i) disks used to support
membranes, modules and other filtration devices used in diagnostic kits and
therapeutic devices utilizing monoclonal antibody technology, (ii) a venting
system for catheters which allows air to vent from a catheter as it is
inserted into a vein, while at the same time preventing blood spillage and
possible contamination of hospital personnel, (iii) a porous disk used in
pipette tips to prevent the fluid to be pipetted from passing into the pipette
instrument, and (iv) an oxygen diffuser, which is typically used in oxygen
therapy equipment to humidify oxygen.

VIAL AND SOLID PLASTIC COMPONENTS. Porex manufactures and sells a full
line of plastic vials for pharmaceuticals. Porex also produces close
tolerance solid plastic components which use most thermoplastic resins, but
primarily polystyrene, polypropylene, nylon and thermoplastic rubber for
medical and industrial applications. These products are custom designed and
produced to satisfy individual customer specifications.

During the year ended June 30, 1995, Medco purchased certain plastic
vials and caps manufactured by Porex for use in its operations totalling
$2,569,000. Prior to consummation of the Purchase, these sales were based on
prices and terms generally available to non-affiliates. Pursuant to a
Purchase Agreement dated as of May 24, 1994 between Medco and Porex (the
"Medco/Porex Purchase Agreement"), entered into in connection with the
<PAGE>

Purchase and effective as of the closing of the Purchase, Porex has been
supplying to Medco all of Medco's needs as described therein (the
"Requirements") for certain plastic vials and/or caps of different styles,
dimensions and designs as described therein (the "Products"), for Medco's use
in its prescription dispensing operations, and Medco will continue to purchase
such Requirements until December 14, 1996. The cost to Medco of the Products
is the price in effect on the date of the Medco/Porex Purchase Agreement and
Medco will be entitled to that price until December 14, 1995. Such price will
increase by 3% on such date subject to certain adjustments set forth in the
Medco/Porex Purchase Agreement.

INDUSTRIAL PRODUCTS

Porex manufactures a variety of custom porous plastic components for
industrial applications. These components are produced as molded shapes, and
in sheets, tubes and rods, individually designed to customer specifications as
to size, rigidity, porosity and other needs.

AUTOMOTIVE PRODUCTS. Porex believes that it is currently the largest
producer of porous plastic vents used in domestic automobile batteries. A
battery vent is used as a flame arrester to prevent damage to an automotive
storage battery and possible personal injury. The typical lead-acid storage
battery, when being charged, generates significant quantities of hydrogen gas.
The accumulated hydrogen must be vented into the atmosphere to prevent
internal pressure build-up in the battery. The porous plastic material
incorporated into the battery vent allows the generated hydrogen to pass into
the atmosphere and reduces the possibility that accidental sparks or flames
will enter the battery.

WASTEWATER TREATMENT PRODUCTS. Porex manufactures a porous plastic
material used for filter support media for wastewater treatment facilities.
Such facilities are generally large construction projects built under
contracts awarded to third parties through competitive bidding with state or
local government authorities for communities. Porex expects continued sales
in this area. However, due to the scale and frequency of such construction
projects, as well as the dependence of Porex's customers on government
contracts, sales of wastewater treatment components are expected to be
irregular.

OTHER OEM INDUSTRIAL COMPONENTS. Porex produces (i) industrial filters
to remove particulate matter, oil and water residues from compressed air
lines, (ii) silencers and mufflers to reduce sound levels produced by
compressed air exhaust, (iii) miscellaneous water filters for industrial use,
including use in vending machines, and (iv) products for facilitating the
movement of powdered materials. Porex also manufactures a large variety of
highly specialized plastic components to meet specific applications for
manufacturers.

CONSUMER PRODUCTS

Porex manufactures a line of porous plastic components used in a variety
of home and office products and appliances. Porex's consumer products include
a variety of writing pen tips or "nibs" which Porex supplies principally to
manufacturers of marking and highlighting pens. The porous nib conducts the
ink stored in the pen barrel to the writing surface by capillary action.
Porex produces a variety of porous plastic filters used in home water filters
and conditioners. The filters are used for particle and sediment removal
through devices attached to a sink or faucet. Porex's porous plastic
components are used in health and beauty aid products (such as deodorant and
fragrance applicators).

MARKETING AND DISTRIBUTION

As of June 30, 1995, Porex had over 300 customers for its porous and
solid plastic products. Porex distributes its proprietary blood serum filters
and related products through independent distributors. Porex's MEDPOR(R)
products are sold primarily by Porex's marketing staff while the remaining
surgical products are sold primarily through independent dealers and agents.
In the United States, sales of OEM health care products,
<PAGE>

industrial products and consumer products are made directly by Porex's
marketing staff. Internationally, such products are sold through independent
distributors and agents who work in conjunction with Porex's marketing staff.
Export sales, which are made principally to Europe, consist primarily of
Porex's OEM medical product, industrial product and consumer product lines.
For the fiscal year ended June 30, 1995, Porex's foreign sales and export
sales were approximately $10,403,000, or 27% of sales, as compared to
approximately $7,904,000, or 24% of sales, for the fiscal year ended June 30,
1994 and approximately $6,540,000, or 21% of sales, for the fiscal year ended
June 30, 1993. See Note 6 to the Consolidated Financial Statements.

Porex has a marketing staff of 14 professional employees, six of whom
work with manufacturers on matters which include development of component
products to help solve such manufacturers' problems.

SEASONALITY AND BACKLOG

Porex's plastic products business is not seasonal to any significant
extent. At June 30, 1995, Porex's backlog was approximately $9,640,000, as
compared to approximately $8,152,000 at June 30, 1994. The backlog consists
primarily of blanket orders with release dates of up to 12 months, the full
amounts of which are expected to be filled over a 12-month period.

PRODUCT AND PROCESS DEVELOPMENT

Porex maintains a continuing development program devoted primarily to
porous materials and their applications and proprietary products for the
clinical laboratory. Development activities include designing new and
improved products, either proprietary or for customers' specific requirements,
and new manufacturing processes.

Porex's development expenditures were $1,490,000, $1,328,000 and
$1,547,000 for the fiscal years ended June 30, 1995, 1994 and 1993,
respectively. Recently, new product development activities have focused on
porous components for use in health care and other applications and
proprietary products for the clinical laboratory.

RAW MATERIALS

The principal raw materials used by Porex in its plastic products
business are a variety of plastic resins which are generally available from a
number of suppliers in the United States in adequate quantities to meet
Porex's needs. Porex has been able to obtain adequate supplies of raw
materials and believes that sufficient supplies will be available in the
foreseeable future. Porex has no long-term supply contracts for the purchase
of raw materials. Because the primary resource used in plastic resins is
petroleum, the cost and availability of plastic resins for use in Porex's
products varies to a great extent with the price of petroleum. Porex's
inability to acquire sufficient plastic resins at a reasonable price would
affect Porex's ability to maintain its margins in the short term.

Porex requires high-grade plastic resins with specific properties as raw
materials for certain of its porous plastic products. Accordingly, shipments
of raw materials from suppliers are closely monitored for compliance with
Porex's standards. Porex has routinely rejected pre-shipment samples of
product from raw material suppliers. Although there are various suppliers of
high-grade plastic resins with specific properties and Porex has not
experienced any material difficulty in obtaining adequate supplies of high-
grade materials, the inability to obtain such high-grade plastic resins, or
any raw materials, could have a material adverse effect on Porex. To ensure
the availability of high-grade plastic resins with specific properties, Porex
occasionally purchases more than it would otherwise currently require. Porex
maintains an inventory of raw materials sufficient to satisfy its production
needs for an extended period of time.

For its solid plastic products, Porex utilizes commercial grade
thermoplastic resins, including polyethylene, polypropylene and polystyrene.
Such materials are readily available from a number of sources and Porex is not
dependent on any single source of supply. Because of the ready availability
of such materials, Porex does not maintain a significant inventory of such raw
materials.
<PAGE>

PATENTS AND TRADEMARKS

Porex owns a number of patents and trademarks in the United States and
foreign countries. The majority of Porex's patents and patent applications
relates to porous plastics and medical devices. Porex is the exclusive
licensee of a patented valve device used in one model of its blood serum
filters, and of a patent on a surgical drain device. Porex does not consider
either license material to its business operations. Porex owns one patent on
blood serum filters. Although Porex deems its patents to be important to its
business and intends to continue to seek patent protection when deemed
appropriate, no significant portion of the business of Porex is deemed by
management to be materially dependent on any particular patent. Porex
believes that its non-patented manufacturing processes are protected under
contractual and other legal principles which, however, do not afford the
statutory exclusivity possible for patented processes.

REGULATION

The developing, testing, marketing and manufacturing of medical devices
such as plastic and reconstructive surgical implants and tissue expanders are
regulated under the Medical Device Amendments of 1976 to the Federal Food,
Drug and Cosmetic Act (the "1976 Amendments") and additional regulations
promulgated by the Food and Drug Administration (the "FDA"). In general,
these statutes and regulations require that manufacturers adhere to certain
standards designed to ensure the safety and effectiveness of medical devices.
Compliance with such requirements and the process of obtaining approvals can
be costly, complicated and time-consuming and there can be no assurance that
such approvals will be granted on a timely basis. When Porex merely
distributes devices manufactured by others, the actual manufacturer must
comply with these requirements.

Under the 1976 Amendments, each medical device manufacturer must be a
"registered device manufacturer" and must comply with regulations applicable
generally to manufacturing practices and clinical investigations involving
humans. The FDA is authorized to obtain and inspect devices, their labeling
and advertising, and to inspect the facilities in which they are manufactured
in order to ensure that a device is not improperly manufactured or labeled.
Porex is registered with the FDA and Porex's Japanese supplier of tissue
expanders has submitted its facilities to voluntary FDA inspection.

In addition, the sale and marketing of specific medical devices are
regulated by the FDA under the 1976 Amendments, which classify medical devices
based upon the degree of regulation deemed appropriate and necessary. A
device is classified as a Class I, II or III device based on recommendations
of advisory panels appointed by the FDA. Class I devices are subject only to
general controls. Class II devices, in addition to general controls, are
subject to "performance standards." Class III devices, including most devices
used or implanted in the body, require FDA pre-market approval before they may
be distributed other than in clinical trials.

Porex's MEDPOR(R) Surgical Implants and tissue expanders are regulated as
Class II medical devices. Products which Porex may introduce in the future,
if any, may also be classified as Class I, Class II or Class III medical
devices. The procedure for obtaining classification of a new device as a
Class I or Class II device involves the submission of a petition to the FDA.
If the FDA determines that the device is substantially equivalent to a pre-
enactment device or a device subsequently classified in Class I or Class II,
then within 210 days of the filing of the petition it will grant approval to
market the device commercially. If the FDA determines the device is not
substantially equivalent to a pre-enactment device or a device subsequently
classified in Class I or Class II, it is automatically placed into Class III
and will either require reclassification or the submission of valid scientific
evidence to prove the device is safe and effective for human use. Devices to
be implanted will be categorized as Class III unless such classification is
not necessary to ensure their safety and effectiveness. For new Class III
devices, Porex may submit to the FDA an application for an Investigational
Device Exemption ("IDE"). An approved IDE exempts Porex from certain
otherwise applicable FDA regulations and grants approval for a clinical
investigation, or human study, to generate data to prove safety and
effectiveness. In addition, the possibility exists that certain pre-
enactment, or substantially equivalent, devices may be placed into Class III
by the FDA.
<PAGE>

When a manufacturer believes that sufficient clinical data has been
generated to prove the safety and effectiveness of the device, it may submit a
pre-market approval application ("PMA") to the FDA. The FDA reviews the PMA
and determines whether it is in submittable form and all key elements have
been included. Following acceptance of the PMA, the FDA continues its review
process which includes submission of the PMA to a panel of experts appointed
by the FDA to review the PMA and to recommend appropriate action. The panel
then recommends that the PMA be approved, not approved or approved subject to
conditions. The FDA may act according to the panel's recommendations, or it
may overrule the panel. In approving a PMA, the FDA may require some form of
post-market surveillance or other restriction.

Certain environmental regulations also apply to Porex's business, and the
Company believes that Porex is in substantial compliance with all of such
regulations. However, Porex is subject to random and scheduled checks by
environmental authorities. The Company does not anticipate that any material
capital expenditures will be required to comply with environmental
regulations.

COMPETITION

Competition in Porex's plastic products business is characterized by
technological change, product obsolescence and the introduction of competitive
products at lower prices. Porex attempts to compete principally through
product performance, quality and service, rather than price.

In the porous plastics area, Porex's competitors include other producers
of porous plastic materials as well as companies that manufacture and sell
products made from materials other than porous plastics which can be used for
the same purposes as Porex's products. In this field, Porex has two
significant direct competitors in the United States and two significant direct
competitors in Europe. Porex competes with several manufacturers of blood
serum filters whose products perform the same function as Porex's original
blood serum filter and its other blood serum filters and which utilize
technologies both similar to and different from Porex's products. Porex's
porous plastic pen nibs compete with felt and fiber tips manufactured by a
variety of suppliers in the United States and other countries. Other of
Porex's industrial products made of porous plastic compete, depending on the
industrial application, with porous metals, metal screens, fiberglass tubes,
pleated paper, resin-impregnated felt, ceramics and other substances and
devices.

The market for injection molded solid plastic components and products is
highly competitive and highly fragmented. Many manufacturers compete both
domestically and abroad and no company controls a significant percentage of
the market.

POTENTIAL LIABILITY RISK AND AVAILABILITY OF INSURANCE

The products sold by Porex expose it to potential risk for product
liability claims particularly with respect to Porex's medical/surgical
products. The Company believes that Porex carries adequate insurance coverage
against product liability claims and other risks. There can be no assurance,
however, that claims in excess of Porex's insurance coverage will not arise.
In addition, Porex's insurance policies must be renewed annually. In 1994,
Porex was notified that its insurance carrier would not renew its then-
existing insurance coverage after December 31, 1994 with respect to actions
and claims arising out of Porex's distribution of silicone mammary implants.
However, Porex has exercised its right to purchase extended reporting period
coverage with respect to such actions and claims. Such coverage provides
insurance, subject to existing policy limits but for an unlimited time period,
with respect to actions and claims made after December 31, 1994 that are based
on events that occurred during the policy period. Porex has renewed its
insurance coverage with the same carrier for other liability claims. Although
Porex has been able to obtain adequate insurance coverage at an acceptable
cost in the past and seeks indemnification for products manufactured by others
and distributed by it, there can be no assurance that in the future it will be
able to obtain such insurance at an acceptable cost or be adequately protected
by such indemnification. See "--Health Care Products" and "Item 3. Legal
Proceedings--Mammary Implant Litigation."
<PAGE>

ACQUISITION PROGRAM

The Company intends to pursue an acquisition program pursuant to which it
will seek to effect one or more acquisitions of or business combinations with
businesses that the Company believes have significant growth potential. The
Company expects that the growth potential from such transactions may come
from, among other factors, its ability to (i) improve the financial and
operating performance of an acquired business, (ii) redefine the business
strategy of an acquired business to enhance its market position or gain entry
to new markets for its products or services or (iii) enhance the value of an
acquired business by the acquisition of similar or complementary businesses.
The Company intends initially to concentrate its acquisition efforts in the
health care industry but such emphasis would not limit in any manner its
ability to pursue acquisition opportunities in other industries. The Company's
acquisition program could result in a substantial change in the business,
operations and financial condition of the Company. The Company does not
intend to seek stockholder approval for any such acquisition or security
issuance unless required by applicable law or regulation. The success of the
Company's acquisition program will depend on, among other things, the
availability of acquisition candidates, the availability of funds to finance
acquisitions, and the availability of management resources to oversee the
operation of acquired businesses. No assurance can be given that the Company
will succeed in consummating any acquisitions or that the Company will be able
to successfully manage or integrate any business that it acquires. The future
growth of the Company will depend primarily on its ability to consummate one
or more such acquisitions and to operate such businesses successfully. Any
acquisitions will be limited, as required by the Purchase and Sale Agreement
dated as of May 24, 1994, between Merck and the Company (the "Purchase and
Sale Agreement"), to areas of business that would not be competitive with
certain businesses of Merck and its subsidiaries, including the Institutional
Pharmacies Business.

EMPLOYEES

As of June 30, 1995, the Company had 445 employees.

ITEM 2. PROPERTIES.

The Company leases approximately 7,000 square feet of corporate office
space at 669 River Drive, Elmwood Park, New Jersey 07407-1361.

Porex owns a total of 47 acres of land at three locations in Georgia with
four buildings with an approximate area of 242,000 square feet, used for
manufacturing, research, office space and warehouse purposes. The land and
buildings at one such location are subject to a first mortgage securing the
industrial revenue bond described in Note 4 to the Consolidated Financial
Statements. Porex also owns a manufacturing, office and warehouse facility in
Bautzen, Germany with 3.4 acres of land and approximately 36,500 square feet
in three buildings.

The Company believes its facilities and equipment are well maintained, in
good operating condition and, in general, suitable for the Company's purposes
and adequate for its present operation.
<PAGE>

ITEM 3. LEGAL PROCEEDINGS.

MAMMARY IMPLANT LITIGATION. During the year ended June 30, 1988,
Synetic's subsidiary Porex began distributing silicone mammary implants
("implants") in the United States pursuant to a distribution arrangement (the
"Distribution Agreement") with a Japanese manufacturer (the "Manufacturer").
Because of increased government regulation and examination, Porex's supplier
determined to withdraw its implants from the United States market. On July 9,
1991, the FDA mandated a recall of all implants manufactured by companies that
elected not to comply with certain FDA regulations regarding data collection.
Accordingly, Porex notified all of its customers not to use any implants sold
by Porex and to return such implants to Porex for a full refund. Porex had
ceased offering implants for sale prior to the recall date. Porex believes
that after accounting for implants returned to it, the aggregate number of
recipients of implants distributed by Porex under the Distribution Agreement
in the United States totals approximately 2,500.

Since March 1991, Porex has been named as one of many co-defendants in a
number of actions brought by recipients of implants. One of the pending
actions, Donna L. Turner v. Porex Technologies Corporation, et al., is styled
as a class action. As of September 14, 1995, certain of the actions against
Porex have been dismissed where it was determined that the implant in question
was not distributed by Porex. In addition, 48 claims have been settled by the
Manufacturer or by the insurance carriers of Porex without material cost to
Porex. As of September 14, 1995, 189 actions and 30 out-of-court claims were
pending against Porex. Of the 189 actions, 70 involve implants identified as
distributed by Porex and 79 cases involve implants identified as not having
been distributed by Porex. In the remaining 40 actions, the implants have not
been identified.

The typical case or claim alleges that the individual's mammary implants
caused one or more of a wide range of ailments. These implant cases and
claims generally raise difficult and complex factual and legal issues and are
subject to many uncertainties and complexities, including, but not limited to,
the facts and circumstances of each particular case or claim, the jurisdiction
in which each suit is brought, and differences in applicable law. The Company
does not have sufficient information to evaluate each case and claim.

In 1994, Porex was notified that its insurance carrier would not renew
its then-existing insurance coverage after December 31, 1994 with respect to
actions and claims arising out of Porex's distribution of implants. However,
Porex has exercised its right, under such policy, to purchase extended
reporting period coverage with respect to such actions and claims. Such
coverage provides insurance, subject to existing policy limits but for an
unlimited time period, with respect to actions and claims made after December
31, 1994 that are based on events that occurred during the policy period. The
Company believes that such coverage, together with Porex's insurance policies
in effect on or before December 31, 1994, should provide adequate coverage
against liabilities that could result from actions or claims arising out of
Porex's distribution of implants. To the extent that certain of such actions
and claims seek punitive and compensatory damages arising out of alleged
intentional torts, if awarded such damages may or may not be covered, in whole
or in part, by Porex's insurance policies. In addition, Porex's recovery from
its insurance carriers is subject to policy limits and certain other
conditions. Porex has been expensing the retention amount under its policies
as incurred.

The Company believes that Porex has a valid claim for indemnification
under the Distribution Agreement with respect to any liabilities that could
result from pending actions or claims by recipients of implants or any similar
actions or claims that may be commenced in the future. However, Porex's right
to indemnification is subject to a disagreement with the Manufacturer.
Pending the resolution of such disagreement, the Manufacturer has been paying
a portion of the costs of the settled claims.

Based on the foregoing, the Company believes that the possibility is
remote that pending actions and claims by recipients of mammary implant
devices or any similar actions and claims that may be commenced or made in the
future could pose a material risk to the financial position of the Company or
its results of operations.
<PAGE>

STOCKHOLDER LITIGATION. On August 18, 1994, an action entitled Fuss v.
Wygod, et al. was filed against the Company, its directors, and Merck in the
Court of Chancery of the State of Delaware in and for New Castle County (the
"Delaware Court"). The action purportedly arises out of the events leading to
the Divestiture and the Purchase and is purportedly brought both derivatively
on behalf of the Company and as a class action on behalf of the Company's
stockholders other than the defendants. On October 14, 1994, the parties
entered into a Memorandum of Understanding (the "Memorandum") in connection
with a contemplated settlement of the lawsuit. The basis for the contemplated
settlement includes (a) changes to the terms of the Purchase partially in
response to the filing of the lawsuit and (b) resolution of certain disclosure
issues raised by plaintiff's comments on a draft of the proxy statement sent
to stockholders of the Company in connection with the Divestiture and the
Purchase. The contemplated settlement is subject to, among other things,
dismissal of the lawsuit with prejudice and without awarding costs to any
party, except for certain fees and expenses that plaintiff's counsel intends
to seek. In June 1995, the plaintiffs completed discovery to confirm that the
settlement is fair and reasonable and in the best interests of members of the
proposed class (the "Class"). The defendants have denied, and continue to
deny, that they have committed or have threatened to commit any violation of
law or breaches of duty to the plaintiff or members of the Class and the
defendants have entered into the Memorandum because, among other reasons, the
proposed settlement would eliminate the burden and expense of further
litigation and would facilitate the consummation of transactions that they
believe are in the best interests of the Company and its stockholders.

In connection with the contemplated settlement, plaintiff's counsel will
apply to the Delaware Court for an aggregate award of attorneys' fees and
expenses in an amount not to exceed $275,000. Subject to the terms and
conditions of the Memorandum, the Company will pay such fees and expenses as
may be awarded by the Delaware Court. Pursuant to the Purchase and Sale
Agreement, Merck is required to reimburse the Company for 58.65% of such fees
and expenses.

DEA SETTLEMENT. Dunnington Rx Services of Massachusetts, Inc.
("Dunnington"), a former institutional pharmacy subsidiary of the Company, has
entered into a settlement agreement with the United States Attorney for the
District of Massachusetts relating to allegations by the Drug Enforcement
Administration (the "DEA") that Dunnington violated certain federal
regulations dealing with the record keeping and physical security of
controlled substances. Under the settlement, the Company paid $700,000 to the
DEA in full resolution of this dispute. In connection with the sale by the
Company of its Institutional Pharmacies Business, the Company had retained
this liability.

ENFORCEMENT DIVISION INVESTIGATION. On July 6, 1994, the Division of
Enforcement of the Securities and Exchange Commission (the "Enforcement
Division") began an investigation regarding the trading in the securities of
the Company. The Company is cooperating fully with the Enforcement Division's
requests for information and, although it cannot predict the ultimate result
of the inquiry, the Company believes that such inquiry will not have a
material adverse effect on its financial position or results of operations.

The Company is not a party to any other legal proceedings which, in its
belief, could have a material adverse effect on the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The following matters were voted upon at an Annual Meeting of
Stockholders held on May 17, 1995 and received the votes set forth below:
<PAGE>

1) Each of the following persons nominated was elected to serve as director
and received the number of votes set opposite his name:

<TABLE>
<CAPTION>
FOR WITHHELD
---------- --------
<S> <C> <C>
Ray E. Hannah 14,708,164 28,205
Roger H. Licht 14,708,164 28,205
Per G.H. Lofberg 14,704,939 31,430
Herman Sarkowsky 14,708,064 28,305
</TABLE>

2) A proposal to ratify and approve the grant, on December 7, 1994, of
options (the "December 1994 Options") to acquire an aggregate of 830,000
shares of Common Stock to certain officers of the Company was approved
and received 12,526,072 votes FOR and 544,984 votes AGAINST with 38,915
abstentions and 1,626,398 broker non-votes.

3) A proposal to ratify the appointment of Arthur Andersen LLP as
independent public accountants was approved and received 14,547,137 votes
FOR and 5,890 votes AGAINST, with 7,842 abstentions and 175,500 broker
non-votes.
<PAGE>

EXECUTIVE OFFICERS

Pursuant to General Instruction G(3) to the Annual Report on Form 10-K,
the information regarding executive officers of the Company required by Item
401 of Regulation S-K is hereby included in Part I of this report. The
executive officers of the Company are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>

James V. Manning 48 Chief Executive Officer

Paul C. Suthern 43 President and Chief Operating Officer

Charles A. Mele 39 Vice President--General Counsel

Victor L. Marrero 38 Vice President--Finance and Chief Financial Officer

Ray E. Hannah 59 Vice President--Technologies Group
</TABLE>

Mr. Manning has been Chief Executive Officer of the Company since January
1995 and has been an executive officer of the Company for more than the last
five years and was, until December 1994, an executive officer of Medco for
more than five years. He is also Chairman of the Board of COMNET Corporation
("Comnet"), a computer software company.

Mr. Suthern has been the President and Chief Operating Officer of the
Company since February 1993 and was also the Chief Executive Officer from
October 1993 until January 1995. Mr. Suthern was also the President and Chief
Operating Officer of Medco from November 1992 through December 1994 and
Assistant to Medco's Chairman from December 1991 to November 1992. Prior
thereto he was Executive Vice President - Operations of Medco for more than
five years.

Mr. Mele has been Vice President--General Counsel of the Company since
July 1995 and was an executive officer of the Company from May 1989 until
December 1994 and was an executive officer of Medco for more than five years
until March 1995. Mr. Mele is also a director of Comnet and Group 1 Software,
Inc., computer software companies.

Mr. Marrero has been Vice President--Finance and Chief Financial Officer
of the Company since December 1994 and has been an officer of the Company for
more than the last five years and was, until December 1994, Senior Vice
President--Treasurer of Medco for more than five years.

Mr. Hannah has been President of Porex since September 1987 and its Chief
Executive Officer since November 1992. Mr. Hannah was the Chief Operating
Officer of Porex from November 1984 to November 1992.

Mr. Hannah is the only executive officer of the Company who devotes his
full time to the operation of Porex. Porex has additional senior officers who
also manage the day-to-day operations of Porex.

No family relationship exists among any of the directors and executive
officers of the Company except that Martin J. Wygod, Chairman of the Board of
the Company, and Paul C. Suthern are brothers-in-law. No arrangement or
understanding exists between any director or executive officer and any other
person pursuant to which any director or executive officer was selected as a
director or executive officer of the Company. All executive officers are
elected annually by the Board of Directors and serve at the discretion of the
Board of Directors.
<PAGE>

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock is traded in the over-the-counter market and
included in the NASDAQ National Market System under the symbol "SNTC." The
following table sets forth, for the periods indicated, the high and low sale
prices for the Company's Common Stock as reported by NASDAQ.
<TABLE>
<CAPTION>

High Low
------- -------
<S> <C> <C>

Fiscal Year 1994
----------------
First Quarter..... $15 3/4 $10 3/4
Second Quarter.... $12 $ 8 3/4
Third Quarter..... $12 1/2 $10
Fourth Quarter.... $16 1/2 $ 8 1/4

Fiscal Year 1995
----------------
First Quarter..... $16 1/4 $11 1/2
Second Quarter.... $20 1/4 $14 3/4
Third Quarter..... $25 1/2 $19
Fourth Quarter.... $26 1/4 $23 1/4
</TABLE>

The Company's Common Stock was held by 147 stockholders of record as of
September 1, 1995. The Company believes that its Common Stock is beneficially
held by at least 400 stockholders.

The Company did not pay any dividends to the holders of its Common Stock
during the two fiscal years ended June 30, 1995. The Company intends to
continue to retain earnings to finance its business and its acquisition
program and, accordingly, does not currently anticipate paying cash dividends
to holders of its Common Stock.
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth selected consolidated financial data for
each of the five years in the period ended June 30, 1995. The selected
financial data for the four years in the period ended June 30, 1995 has been
restated to reflect the Divestiture.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------------------------------
1991 1992 1993 1994 1995
------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net Sales................... $24,704 $ 28,486 $ 30,645 $ 33,093 $ 39,179
Income from continuing
operations before
provisions for income
taxes.................... 4,754 6,031 5,430 1,080 1,078
Provision for income taxes.. 1,630 2,151 2,046 411 443
------- -------- -------- -------- --------
Income from continuing
operations............... 3,124 3,880 3,384 669 635
Income from discontinued
operations............... -- 1,376 2,734 1,823 15,459
------- -------- -------- -------- --------

Net Income.................. $ 3,124 $ 5,256 $ 6,118 $ 2,492 $ 16,094
======= ======== ======== ======== ========
Net income per share (1):
Continuing operations.... $ 0.21 $ 0.24 $ 0.19 $ 0.04 $ 0.04
Discontinued operations.. -- $ 0.09 $ 0.16 $ 0.10 $ 0.89
------- -------- -------- -------- --------
Net income per share........ $ 0.21 $ 0.33 $ 0.35 $ 0.14 $ 0.93
======= ======== ======== ======== ========

<CAPTION>
AT JUNE 30,
-------------------------------------------------------
1991 1992 1993 1994 1995
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Working capital............. $30,430 $ 44,350 $ 65,673 $ 64,625 $105,279
Net assets of discontinued
operations............... -- 25,352 52,548 55,882 --
Total assets................ 46,233 163,011 189,494 194,009 188,174
Long Term Debt, less
current portion.......... 1,875 81,714 81,058 80,716 --
Stockholders' equity........ 39,566 74,056 102,378 105,130 166,832
</TABLE>

___________________

(1) Restated to reflect two for one stock split effected on February 26,
1993.
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

As described in "Item 1. Business--Introduction", the Company has sold
its Institutional Pharmacies Business to Pharmacy Corporation of America. The
Divestiture was completed on December 14, 1994. The Company's remaining
industry segment is Plastic Products. The Company's consolidated financial
statements have been restated to report separately the results of operations
and net assets of the Institutional Pharmacies Business as discontinued
operations.

The following table sets forth for the periods indicated the percentage
which certain items in the financial statements of the Company bear to net
sales.

<TABLE>
<CAPTION>
PERCENTAGES OF NET SALES
FISCAL YEARS ENDED JUNE 30,
---------------------------
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>

Net Sales................................. 100% 100% 100%

Costs and Expenses
Cost of sales.......................... 58.7 65.0 59.5
Selling, general and administrative.... 31.0 27.3 26.4
Interest and other income.............. (18.7) (15.3) (23.3)
Interest expense....................... 9.2 18.0 19.7
Other expense.......................... 17.0 1.7 --
----- ----- -----
97.2 96.7 82.3
----- ----- -----
Income before provision for income taxes.. 2.8 3.3 17.7

Provision for income taxes................ 1.1 1.2 6.7
----- ----- -----

Income from continuing operations......... 1.7% 2.1% 11.0%
===== ===== =====
</TABLE>

Fiscal Years Ended June 30, 1995 and 1994
Consolidated Results of Operations

Net sales for the year ended June 30, 1995 increased by $6,086,000, or
18.4%, over the comparable prior year period as a result of sales improvements
across several product lines, principally increased sales of writing
instrument components in the consumer sector and medical products in the
health care sector. The effect of inflation was not significant for the year
ended June 30, 1995.

Cost of sales for the year ended June 30, 1995 increased by $1,512,000,
or 7.0%, over the comparable prior year period due to the increased sales
volume noted above and costs associated with the establishment of additional
manufacturing capabilities. As a percent of net sales, cost of sales for the
year ended June 30, 1995 decreased to 58.7% from 65.0% in the comparable prior
year period principally due to increased sales of higher margin products and
manufacturing efficiencies resulting from the automation of certain production
processes.

Selling, general and administrative expenses for the year ended June 30,
1995 increased by $3,073,000, or 33.9%, over the comparable prior year period
due primarily to costs associated with: (i) the addition of sales personnel,
(ii) the expansion of European operations, and (iii) increased corporate
overhead. As a percent of net
<PAGE>

sales, selling, general and administrative expenses for the year ended June
30, 1995 increased to 31.0% from 27.3% in the prior year primarily due to the
increased corporate overhead noted above.

Interest and other income for the year ended June 30, 1995 increased by
$2,241,000 or 44.2% over the comparable prior year period primarily as a
result of the income earned on the net proceeds received from the sale of the
Institutional Pharmacies Business.

Interest expense for the year ended June 30, 1995 decreased by $2,356,000
from the prior year period as a result of the conversion and redemption of the
Company's Convertible Surbordinated Debentures due December 1, 2001 (the
"Debentures") into common stock of the Company in February 1995.

Other expenses for the year ended June 30, 1995 increased by $6,100,000
over the comparable prior year period as a result of the one-time charge in
December 1994 related to the issuance of stock options to certain officers as
compensation for services in conjunction with the consummation of the Purchase
and Sale Agreement and costs associated with the conversion and redemption in
February 1995 of the Debentures.

The effective tax rate for the year ended June 30, 1995 increased to 41%
from 38% in the prior year period primarily due to the nondeductibility of
certain conversion and redemption costs.

Fiscal Years Ended June 30, 1994 and 1993
Consolidated Results of Operations

Net sales for the year ended June 30, 1994 increased by $2,448,000, or
8.0%, over the prior year period. The sales increase was due principally to
increased unit sales of science specialty products, plastic vials and surgical
products in the health care market segment and, to a lesser extent, to
increased unit sales across the industrial segment product line. These
increases were partially offset by a decrease in sales of blood serum filters.
The effect of inflation was not significant for the year ended June 30, 1994.

Cost of sales for the year ended June 30, 1994 increased by $3,255,000,
or 17.8%, over the prior year period primarily as a result of the increased
sales volume. As a percent of net sales, cost of sales increased to 65.0%
from 59.5% in the prior year primarily as a result of a change in the
composition of sales to lower margin products and to the addition of
manufacturing overhead to support new product lines.

Selling, general and administrative expenses for the year ended June 30,
1994 increased by $956,000, or 11.8%, as compared to the prior year period
primarily due to increased staffing levels and marketing expenditures in
Porex's surgical product group and slightly higher corporate overhead
expenses. As a percent of net sales, selling, general and administrative
expenses increased to 27.3% from 26.4% in the prior year period due to the
increases in the costs noted above.

Interest and other income for the year ended June 30, 1994 decreased by
$2,076,000, or 29%, from the prior year period due to lower interest and
dividend rates available during the year.

Interest expense for the year ended June 30, 1994 did not vary materially
from the prior year period.

Other expense for the year ended June 30, 1994 consists of one time
payments made to certain executive officers in conjunction with Merck's
acquisition of Medco, the Company's then parent company.

The effective tax rate for the year ended June 30, 1994 did not vary
materially from the prior year period.
<PAGE>

Capital Resources and Liquidity

Cash, cash equivalents and marketable securities increased by $49,802,000
to $152,353,000 during the year ended June 30, 1995 principally due to the
proceeds received from the sale of the Institutional Pharmacies Business
offset by the Company's purchase of 5,268,463 shares of its Common Stock from
Merck. Excluding the effects of these transactions, cash provided by
operations, net of capital expenditures was approximately $2.6 million.

In accordance with the Purchase and Sale Agreement, the Company and Merck
entered into a six-month agreement for the provision of certain transition
services by Merck or its subsidiaries to the Company, in order to permit an
orderly transition to the Company's status as an independent entity. Such
services include, among other things, administrative, legal and other
transition services at a cost determined on the same basis as historically
determined. As a result of the consummation of the Purchase and Sale
Agreement noted above, the Company operates independently from Merck and
Medco, and will no longer be charged corporate overhead costs based on the
cost-sharing methodology previously utilized by Medco. The Company is now
directly incurring certain corporate overhead costs, which were allocated
pursuant to its services agreement with Medco prior to the consummation of the
Purchase and Sale Agreement. The Company estimates such additional costs,
which consist primarily of salaries and benefits, rent and insurance, will
increase corporate overhead by approximately $1.3 million over the next 12
months. The Company believes that its cash flow from operations and the
income earned on its investments are sufficient to meet the anticipated
working capital requirements of its business, including these increased
corporate overhead expenses, during this period.

The Company continues to pursue an acquisition program pursuant to which
it seeks to effect one or more acquisitions or other similar business
combinations with businesses it believes have significant growth potential.
Financing for such acquisitions may come from several other sources,
including, without limitation, (a) its cash, cash equivalents and marketable
securities and (b) proceeds from the incurrence of additional indebtedness or
the issuance of common stock, preferred stock, convertible debt or other
securities. There can be no assurance that the Company's acquisition program
will be successful. See "Item 1. Business--Acquisition Program".

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Financial statements and supplementary financial information are
contained on pages F-l through F-19 and S-1 of this Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by this item will be incorporated by reference
from the Company's definitive Proxy Statement for its 1995 Annual Meeting of
Stockholders to be filed pursuant to Regulation 14A, except that the
information regarding the Company's executive officers required by Item 401 of
Regulation S-K has been included in Part I of this Report.

ITEM 11. EXECUTIVE COMPENSATION.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)(1)-(2) Financial Statements and Schedules:

The financial statements and schedules listed in the accompanying Index
to Consolidated Financial Statements and Supplemental Data at page F-l are
filed as part of this Report.

(a)(3) Index to Exhibits:

See Index to Exhibits on page E-1.

(b) Reports on Form 8-K:

None.
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

SYNETIC, INC.

Date: September 28, 1995 By: /s/ James V. Manning
-----------------------------------------
James V. Manning, Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on September 28, 1995.

(1) Principal Executive Officer: (3) A Majority of the Board of Directors:

Thomas R. Ferguson
By: /s/ James V. Manning Mervyn L. Goldstein
--------------------------- Ray E. Hannah
James V. Manning Roger H. Licht
Chief Executive Officer Per G.H. Lofberg
Charles A. Mele
Herman Sarkowsky
Paul C. Suthern
Albert M. Weis
Martin J. Wygod

(2) Principal Financial and
Accounting Officer: By: /s/ James V. Manning
-------------------------------------
James V. Manning
Individually and as Attorney-in-Fact
By: /s/ Victor L. Marrero
---------------------------
Victor L. Marrero
Vice President-Finance and
Chief Financial Officer
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SUPPLEMENTAL DATA

The following financial statements of the Registrant and its subsidiaries
required to be included in Item 14.(a) (1) of Form 10-K are listed below:

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants....... F-2

Consolidated Balance Sheets at June 30, 1995
and 1994..................................... F-3

Consolidated Statements of Income for the
Years Ended June 30, 1995, 1994 and 1993..... F-5

Consolidated Statements of Changes in
Stockholders' Equity for the Years Ended
June 30, 1995, 1994 and 1993................. F-6

Consolidated Statements of Cash Flows for the
Years Ended June 30, 1995, 1994 and 1993..... F-7

Notes to Consolidated Financial Statements..... F-8
</TABLE>

The following financial statement supplementary data of the Registrant and
its subsidiaries required to be included in Item 14.(a) (2) of Form 10-K are
listed below:

<TABLE>
<CAPTION>
Page
----
<S> <C>
Schedule II - Valuation and Qualifying
Accounts..................................... S-1
</TABLE>

All other schedules not listed above have been omitted as not applicable or
because the required information is included in the Consolidated Financial
Statements or in the notes thereto. Columns omitted from schedules filed have
been omitted because the information is not applicable.

These financial statements have been prepared from the Company's books and
records after making all necessary adjustments thereto, and they represent the
final statements for the period under audit.

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Synetic, Inc.:

We have audited the accompanying consolidated balance sheets of Synetic,
Inc. (a Delaware corporation) and subsidiaries as of June 30, 1995 and 1994, and
the related consolidated statements of income, changes in stockholders' equity
and cash flows for each of the three years in the period ended June 30, 1995.
These consolidated financial statements and the schedules referred to below are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and schedules
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Synetic, Inc. and
subsidiaries as of June 30, 1995 and 1994, and the results of their operations
and their cash flows for each of the three years in the period ended June 30,
1995 in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the index to
consolidated financial statements and supplemental data are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not part of the basic financial statements. These schedules have been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, fairly state in all material respects
the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.

ARTHUR ANDERSEN LLP

New York, New York
September 28, 1995

F-2
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)

ASSETS

<TABLE>
<CAPTION>
June 30,
---------------------
1995 1994
-------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents....................... $ 7,499 $ 5,549
Marketable securities........................... 98,000 50,063
Accounts receivable, net of allowances for
doubtful accounts and sales returns
of $636 and $393 at June 30, 1995 and
1994, respectively............................ 6,665 5,609
Inventories..................................... 5,446 6,250
Other current assets............................ 4,031 5,016
-------- --------
Total current assets.......................... 121,641 72,487
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements........................... 780 754
Buildings and improvements...................... 8,286 7,789
Machinery and equipment......................... 17,389 13,613
Furniture and fixtures.......................... 2,696 1,687
Construction in progress........................ 1,331 3,241
-------- --------
30,482 27,084
Less: Accumulated depreciation................. (13,523) (12,042)
-------- --------

Property, plant and equipment, net............ 16,959 15,042
-------- --------

OTHER ASSETS:
Marketable securities........................... 46,854 46,939
Net assets of discontinued operations........... - 55,882
Other........................................... 2,720 3,659
-------- --------
Total other assets.............................. 49,574 106,480
-------- --------
$188,174 $194,009
======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-3
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
June 30,
-------------------
1995 1994
--------- --------
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of long-term debt.................... $ 216 $ 456
Accounts payable..................................... 648 1,071
Accrued liabilities.................................. 9,337 3,437
Income taxes payable................................. 6,161 2,898
-------- --------
Total current liabilities.......................... 16,362 7,862
-------- --------
LONG-TERM DEBT, less current portion................... - 80,716

DEFERRED TAXES AND OTHER LIABILITIES................... 4,980 301

COMMITMENTS AND CONTINGENCIES (NOTE 10)

STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 10,000,000 shares
authorized; none issued............................ - -
Common stock, $.01 par value; 50,000,000 shares
authorized; 16,598,530 and 17,621,512 shares
issued and outstanding at June 30, 1995 and 1994,
respectively....................................... 219 176
Paid-in capital...................................... 152,556 70,416
Treasury stock, at cost; 5,268,463 shares at
June 30, 1995...................................... (36,575) -
Retained earnings.................................... 50,632 34,538
-------- --------
Total stockholders' equity......................... 166,832 105,130
-------- --------
$188,174 $194,009
======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-4
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

<TABLE>
<CAPTION>
Years Ended June 30,
---------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Net sales................................... $39,179 $33,093 $30,645
------- ------- -------

Costs and expenses:
Cost of sales............................. 23,006 21,494 18,239
Selling, general and administrative....... 12,125 9,052 8,096
Interest and other income................. (4,757) (4,754) (6,944)
Dividend income........................... (2,555) (317) (203)
Interest expense.......................... 3,619 5,975 6,027
Other expense............................. 6,663 563 -
------- ------- -------
38,101 32,013 25,215
------- ------- -------
Income from continuing operations
before provision for income taxes......... 1,078 1,080 5,430

Provision for income taxes.................. 443 411 2,046
------- ------- -------
Income from continuing operations........... $ 635 $ 669 $ 3,384
------- ------- -------

Discontinued operations:
Income from discontinued operations, net
of provision for income taxes of $842,
$1,582 and $2,241 in 1995, 1994 and
1993, respectively........................ 963 1,823 2,734

Gain on sale of Institutional Pharmacy
operations, net of taxes of $23,037....... 14,496 - -
------- ------- -------

Net income.................................. $16,094 $ 2,492 $ 6,118
======= ======= =======

Net income per share:
Continuing operations..................... $ .04 $ .04 $ .19
Discontinued operations................... .89 .10 .16
------- ------- -------

Net income................................ $ .93 $ .14 $ .35
======= ======= =======

Weighted average shares outstanding......... 17,379 17,968 17,485
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-5
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands)

<TABLE>
<CAPTION>
Common Stock
---------------
Number Total
of Paid-In Retained Treasury Stockholders'
Shares Amount Capital Earnings Stock Equity
------ ------ -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1992.............. 16,021 160 47,968 25,928 - 74,056
------ ------ -------- -------- -------- -----------

Net income........................ - - - 6,118 - 6,118
Issuance of common stock for
exercise of stock options
and 401(k) plan.................. 217 2 1,577 - - 1,579
Issuance of common stock for
acquisitions of HPS and
Reliance and purchase agreement
payments......................... 1,278 13 19,518 - - 19,531
Issuance of common stock to
the public....................... 68 1 1,093 - - 1,094
------ ------ -------- -------- -------- -----------

Balance, June 30, 1993.............. 17,584 176 70,156 32,046 - 102,378
------ ------ -------- -------- -------- -----------

Net income........................ - - - 2,492 - 2,492

Issuance of common stock for
exercise of stock options
and 401(k) plan.................. 37 - 260 - - 260
------ ------ -------- -------- -------- -----------
Balance, June 30, 1994.............. 17,621 $176 $ 70,416 $34,538 - $105,130
------ ------ -------- -------- -------- -----------

Net income........................ - - - 16,094 - 16,094
Issuance of common stock for
exercise of stock options
and 401(k) plan.................. 368 4 5,200 - - 5,204

Issuance of common stock for
conversion of debentures......... 3,877 39 76,940 - - 76,979

Purchase of 5,268,463 shares
of common stock for Treasury..... - - - - (36,575) (36,575)
------ ------ -------- -------- -------- -----------

Balance, June 30, 1995.............. 21,866 $219 $152,556 $50,632 $(36,575) $166,832
====== ====== ======== ======== ======== ============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-6
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
Years Ended June 30,
-------------------------------
1995 1994 1993
--------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................. $ 16,094 $ 2,492 $ 6,118
Adjustments to reconcile net income to net
cash provided by (used for) operating
activities:
Income from discontinued operations....... (963) (1,823) (2,734)
Gain on sale of Institutional Pharmacy
business................................. (14,496) - -
Other expense............................. 1,056 - -
Depreciation and amortization............. 1,545 2,179 1,911
Deferred income taxes..................... (301) (2,042) 511
Changes in operating assets and
liabilities, net of the effects of
acquisitions:
Accounts receivable, net............... (1,056) (910) (11)
Inventories............................ 804 326 (798)
Other assets........................... (3,365) 2,438 (2,279)
Accounts payable....................... (423) (24) (241)
Accrued liabilities.................... 1,206 1,042 (1,937)
Other liabilities...................... 4,980 - -
Income taxes payable................... 946 2,213 692
Net cash used by discontinued
operations........................... - (653) (1,549)
--------- -------- --------
Net cash provided by (used for)
operating activities................ 6,027 5,238 (317)
--------- -------- --------
Cash flows from investing activities:
Sales of marketable securities............. 383,064 33,132 53,961
Purchases of marketable securities......... (430,916) (60,231) (36,670)
Capital expenditures....................... (3,398) (2,777) (3,776)
Net proceeds from sale of Institutional
Pharmacy business......................... 82,911 - -
Net cash used by Discontinued Operations... - (858) (3,382)
Other...................................... - (261) 669
--------- -------- --------
Net cash provided by (used for)
investing activities................ 31,661 (30,995) 10,802
--------- -------- --------
Cash flows from financing activities:
Payments for Treasury stock................ (36,575) - -
Proceeds from issuance of stock options and
401(k) purchases.......................... 4,369 196 855
Payments on long-term debt................. (3,532) (542) (662)
Proceeds of common stock offering, net of
underwriting discount..................... - - 1,094
--------- -------- --------
Net cash provided by (used for)
financing activities................ (35,738) (346) 1,287
--------- -------- --------
Net increase (decrease) in cash
and cash equivalents........................ 1,950 (26,103) 11,772
Cash and cash equivalents, beginning of
period...................................... 5,549 31,652 19,880
--------- -------- --------
Cash and cash equivalents, end of period..... $ 7,499 $ 5,549 $ 31,652
========= ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-7
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies:

On November 18, 1993, Medco Containment Services, Inc. ("Medco") became a
wholly-owned subsidiary of Merck & Co., Inc. ("Merck"). As a result of this
transaction, Merck acquired voting control of Synetic, Inc. (the "Company").

On May 24, 1994, Merck and the Company entered into a Purchase and Sale
Agreement (the "Agreement") by which the Company and its Chairman, Martin J.
Wygod, would purchase the Company's common stock owned by Merck. As part of this
Agreement, the Company agreed to divest its Institutional Pharmacy business. On
December 14, 1994, the Company consummated the transactions described above
pursuant to which (1) the Company sold its Institutional Pharmacy business to
Pharmacy Corporation of America ("PCA") for $107.3 million, subject to certain
closing adjustments, and (2) the Company and a limited partnership, whose
general partner is controlled by the Company's Chairman, purchased from Merck
the 10,330,320 shares of the Company's common stock held by Merck.

The Company has granted stock options with an exercise price below fair
market value on the date of award to certain officers in recognition of their
contribution in completing these transactions. Accordingly, included in Other
expense in the accompanying financial statements, the Company has recorded a
non-recurring charge of approximately $5 million relating to such stock options
in conjunction with the consummation of these transactions.

Principles of Consolidation--

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned operating subsidiary, Porex Technologies Corp.
("Porex"), after elimination of all material intercompany accounts and
transactions. All periods and related notes thereto have been restated to
reflect the discontinuance of the Institutional Pharmacy business, as discussed
in Note 2.

Cash and Cash Equivalents--

The Company considers all liquid investment instruments with an original
maturity of three months or less to be the equivalent of cash for purposes of
balance sheet presentation and for the consolidated statements of cash flows.
These short-term investments are stated at cost, which approximates market.

Marketable Securities--

At June 30, 1995 and 1994 marketable securities consisted primarily of U.S.
Treasury Notes and Money Market Preferred Stock investments. These investments,
which are carried at a cost of $144,854,000 and $97,002,000, net of unamortized
premium, had an aggregate market value of $145,539,000 and $97,003,000 at June
30, 1995 and 1994, respectively. At June 30, 1995, gross unrealized gains
pertaining to current and noncurrent marketable securities and other investments
were $685,000. Gains and losses on the sale of marketable securities and other
investments are calculated using the specific identification method.

F-8
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies: (continued)

Investments in Debt and Equity Securities --

Effective July 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" ("SFAS No. 115"). This Statement addresses the accounting and
reporting for investments in equity securities that have readily determinable
fair values and for all investments in debt securities. At June 30, 1995, the
Company's investments consisted principally of Money Market Preferred Stock
investments and U.S. Treasury Notes. The Money Market Preferred Stock
investments, with scheduled maturities of less than one year, are classified as
available-for-sale and are valued at estimated fair value, which approximates
cost. These investments are generally redeemed at face value upon maturity and,
as such, gains or losses on disposition are immaterial. The U.S. Treasury Notes
maturing February 1997 through June 1997 are classified as held-to-maturity and
are carried at cost, net of unamortized premium. Gross unrealized holding gains
pertaining to the U.S. Treasury Notes as of June 30, 1995 were $685,000.

Inventories--

Inventories are stated at the lower of (first-in, first-out) cost or
market. Cost includes raw materials, direct labor, and manufacturing overhead.
Market is based on current replacement cost for raw materials and supplies and
on net realizable value for work-in-process and finished goods. Inventories
consisted of the following (in thousands):

<TABLE>
<CAPTION>
June 30,
--------------
1995 1994
------ ------
<S> <C> <C>
Raw materials and supplies.. $2,843 $3,089
Work-in-process............. 549 564
Finished goods.............. 2,054 2,597
------ ------
$5,446 $6,250
====== ======
</TABLE>

Property, Plant and Equipment--

Property, plant and equipment are stated at cost. For financial
reporting purposes, depreciation is provided principally on the straight-
line method over the estimated useful lives of the assets. Annual
depreciation rates range from 2% to 5% for buildings and improvements and
from 9% to 33% for machinery and equipment and furniture and fixtures. For
income tax purposes, certain assets are depreciated using accelerated
methods. Expenditures for maintenance, repair and renewals of minor items
are charged to operations as incurred. Major betterments are capitalized.

F-9
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies: (continued)

Accrued Liabilities--

Accrued liabilities consisted of the following (in thousands):

<TABLE>
<CAPTION>
June 30,
--------------
1995 1994
------ ------
<S> <C> <C>
Accrued payroll and benefit costs.. $3,224 $1,638
Payable to former Parent........... 2,273 -
Accrued legal costs................ 1,330 -
Accrued interest................... 4 479
Other.............................. 2,506 1,320
------ ------
Total............................ $9,337 $3,437
====== ======
</TABLE>

Income Taxes--

Deferred income taxes are provided for differences in the timing of
income and expense recognition for financial and tax reporting purposes.

Effective July 1, 1993, the Company changed its method of accounting
for income taxes from the deferred method to the liability method required
by Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"). As permitted under the new rules, prior years'
financial statements have not been restated.

In accordance with the disclosure provisions of SFAS 109, the Company
has included approximately $1,971,000 and $897,000 of deferred tax assets
in other current assets and other assets, respectively, representing the
effects of temporary differences between carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for
income tax purposes.

The effect of adopting SFAS 109 was not material to the results of
operations for the year ended June 30, 1994.

Foreign Currency Translation--

The financial statements and transactions of Porex's foreign
manufacturing facility are maintained in its functional currency (Deutsche
mark) and translated into U.S. dollars. The adjustments which result from
the process of translating these financial statements are not material and,
therefore, are not separately disclosed in the accompanying consolidated
financial statements.

Revenue Recognition--

The Company designs, manufactures and distributes porous and solid
plastic components and products used in healthcare, industrial and consumer
applications. Revenue is recognized upon product shipment net of sales returned.

F-10
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies: (continued)

Development Costs--

Company-sponsored development costs related to both present and future
products are expensed currently. Total expenditures on development were
$1,490,000, $1,328,000 and $1,547,000 for the years ended June 30, 1995, 1994,
and 1993, respectively.

Net Income Per Share--

Net income per share is determined by dividing net income by the weighted
average number of shares of common stock and common stock equivalents
outstanding during each year. Common stock equivalents consist of common stock
which may be issuable upon exercise of outstanding stock options as calculated
using the treasury stock method.

Reclassifications--

Certain reclassifications have been made to prior year amounts to conform
to the current year presentation.

(2) Discontinued Operations:

On December 14, 1994, the Company sold its Institutional Pharmacy business
to Pharmacy Corporation of America, a wholly-owned subsidiary of Beverly
Enterprises, Inc., for approximately $107.3 million in cash, subject to certain
closing adjustments. As a result of this transaction, the Company recorded an
after-tax gain of $14,496,000. The consolidated financial statements have been
restated to report separately the net assets and operating results of the
discontinued operations.

As of June 30, 1994, the investment in the net assets of the discontinued
operation consisted of (in thousands):

<TABLE>
<CAPTION>
1994
--------
<S> <C>
Current assets........... $ 21,700
Current liabilities...... (5,544)
--------
Net current assets....... 16,156
Net fixed assets......... 4,215
Other noncurrent assets.. 42,723
Noncurrent liabilities... (7,212)
--------
$ 55,882
========
</TABLE>

Net sales of the discontinued operations were $37,089,000 for the period
ended December 13, 1994, and $78,705,000 and $63,077,000 for the years ended
June 30, 1994 and 1993, respectively.

F-11
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) Stockholders' Equity:

In February 1995, the Company issued 3,877,607 shares of its common
stock resulting from the conversion of $79,104,000 aggregate principle
amount of its 7% Convertible Subordinated Debentures due December 1, 2001
(the "Debentures"). (See Note 4.)

At June 30, 1994, 10,330,320 shares of the Company's $.01 par value
common stock were held by Merck. Pursuant to the Agreement between Merck
and the Company, the Company and a limited partnership, whose general
partner is controlled by the Company's Chairman, purchased these shares
from Merck. The Company's purchase of 5,268,463 of such shares is
reflected as Treasury Stock in the accompanying consolidated financial
statements. (See Note 1.)

On February 5, 1993, the Company declared a two-for-one stock split of
its common stock, in the form of a dividend paid on February 26, 1993, to
stockholders of record as of the close of business on February 16, 1993.
The accompanying consolidated financial statements have been adjusted
retroactively to the earliest period presented to reflect the stock split.

On March 5, 1993, the former owners of three acquired businesses sold
their shares of the Company's common stock in a registered public offering.
In conjunction with this offering, Medco purchased 330,320 shares of the
Company's common stock from certain former owners. Pursuant to the related
purchase agreements, the Company paid the former owners $3,984,000, in the
aggregate, based on the net offering price. Such payments have been charged
to paid-in capital as an adjustment to the original value of the
consideration issued to acquire the business.

In connection with the registered public offering referred to above,
the Company received proceeds of $1,094,000 as payment for 68,000 shares of
common stock issued to the underwriters of the offering pursuant to the
exercise of an over-allotment option.

(4) Long-Term Debt:

Long-term debt at June 30, 1995 and 1994 consisted of the following (in
thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Convertible Subordinated Debentures due
December 1, 2001 with interest at 7% payable
semi-annually (a)................................. - $80,500

Fulton County Industrial Revenue Bonds, maturing
April 30, 1997, payable in quarterly
installments of $114,000 plus interest at 83% of
a floating prime rate (7.4% at June 30, 1995)(b).. 216 672

Other long-term debt............................... - -
------- -------
216 81,172
Less: current portion.............................. (216) (456)
------- -------
Total long-term debt............................. $ - $80,716
======= =======
</TABLE>

F-12
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4) Long-Term Debt: (continued)

(a) In December 1991, the Company issued to the public $80,500,000
aggregate principal amount of its Debentures. The Debentures were
convertible at any time prior to maturity, unless previously redeemed, into
shares of the Company's common stock at a conversion price of $20.40 per
share, subject to adjustment under certain circumstances. On January 27,
1995, the Company called for redemption on February 13, 1995 the
Debentures. Holders of $79,104,000 aggregate principal amount of the
Debentures surrendered them for conversion into an aggregate of 3,877,607
shares of common stock. The remaining $1,396,000 of the outstanding
Debentures were redeemed at the redemption price of 104% plus accrued
interest. Included in Other expense in the accompanying financial
statements are approximately $1.1 million of costs associated with the call
for redemption.

(b) Substantially all of Porex's property, plant and equipment have
been pledged as collateral to secure this obligation. The obligation is
guaranteed by Medco. The Company has indemnified Medco with respect to
Medco's obligations under such guarantee.

Aggregate maturities of long-term debt are as follows (in thousands):

<TABLE>
<CAPTION>
Years Ending June 30,
- ---------------------
<S> <C>
1996............................................... $ 216
1997............................................... -
1998............................................... -
1999............................................... -
2000............................................... -
Thereafter......................................... -
</TABLE>

(5) Income Taxes:

The income tax provisions are summarized as follows (in thousands):

<TABLE>
<CAPTION>
Years Ended June 30,
------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Current:
Federal.............................. $2,594 $ 778 $1,746
State................................ 491 107 510
------ ------ ------
Total current........................ 3,085 885 2,256
------ ------ ------
Deferred:
Federal.............................. (2,070) (436) (172)
State................................ (572) (38) (38)
------ ------ ------
Total deferred...................... (2,642) 474 (210)
------ ------ ------
Total income tax provision......... $ 443 $ 411 $2,046
====== ====== ======
</TABLE>

F-13
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5) Income Taxes: (continued)

A reconciliation of the income tax provision, computed by applying the
federal statutory rate to income before taxes, and the actual provision for
income taxes is as follows:

<TABLE>
<CAPTION>
Years Ended June 30,
------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Federal statutory rate................ 35.0% 34.0% 34.0%
State tax, net of federal benefit..... (4.8) 7.3 5.7
Dividend exclusion.................... (52.3) (7.0) (0.9)
Non-deductible conversion costs....... 67.6 - -
Other, net............................ (4.4) 3.8 (1.1)
----- ----- ------
41.1% 38.1% 37.7%
===== ===== =====
</TABLE>

Timing differences resulted in the following deferred tax expense (benefit) (in
thousands):

<TABLE>
<CAPTION>
Years Ended June 30,
-------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Book/tax differences in accounting method
for assets acquired....................... $ 15 $ (44) $ 63
Accrued expenses........................... (643) (365) (283)
Deferred compensation - stock options (2,038) - -
Excess of tax over book depreciation and
amortization.............................. 38 (5) 165
Other, net................................. (14) (60) (155)
------- ----- -----
$(2,642) $(474) $(210)
======= ===== =====
</TABLE>

Deferred tax liabilities (assets) at June 30, 1995, are comprised of the
following (in thousands):

<TABLE>
<S> <C>
Tax over book depreciation..................... $ 1,023
Intangible assets amortization................. 179
Accrued expenses............................... (1,374)
Deferred compensation - stock options.......... (2,038)
Inventory ..................................... (425)
Prepaids and other ............................ (233)
-------
$(2,868)
=======
</TABLE>

(6) Major Customers and Export Sales:

For fiscal year 1995 and 1994, no customer accounted for more than 10%
of the Company's net sales. For fiscal year 1993, one customer accounted
for 12% of the Company's net sales.

Foreign sales and export sales of Porex, which are made principally to
Europe, amounted to $10,403,000, $7,904,000 and $6,540,000 for the fiscal
years ended June 30, 1995, 1994 and 1993, respectively.

F-14
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) Pension and Profit Sharing Plans:

The Company has defined benefit pension plans covering substantially
all of its employees. Net pension cost for the years ended June 30, 1995,
1994 and 1993 included the following components (in thousands):

1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Service cost.................. $ 240 $ 221 $ 197
Interest cost................. 273 253 217
Actual return on plan assets.. (427) (232) (687)
Net amortization.............. 127 (45) 472
----- ----- -----
Net pension cost............ $ 213 $ 197 $ 199
===== ===== =====
</TABLE>

The following table sets forth the funded status of the plans and
amounts recognized in the Company's consolidated balance sheets (in
thousands):

<TABLE>
<CAPTION>
June 30,
------------------
1995 1994
-------- --------
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation..................... $(2,585) $(2,244)
Nonvested benefit obligation.................. (59) (117)
------- -------
Accumulated benefit obligation................ (2,644) (2,361)
Effect of future salary increases............. (1,523) (1,497)
------- -------

Projected benefit obligation.................... (4,167) (3,858)
Plan assets at fair value....................... 3,986 3,566
------- -------

Funded status................................... (181) (292)
Unrecognized net gain........................... (193) (97)
Unrecognized net asset.......................... (238) (259)
Unrecognized prior service cost................. 66 264
------- -------
Net pension liability recognized in the
consolidated balance sheets.................... $ (546) $ (384)
======= =======
</TABLE>

The Company funds the Plan through annual contributions representing
no less than the minimum amounts required as computed by actuaries to be
consistent with the Plan objectives and government regulations. The net
pension liability is included in accrued liabilities.

Assumptions used in the accounting for the Company's defined benefit
plans as of June 30, 1995 and 1994 were:
1995 1994
---- ----
Discount rate............................. 7.5% 7.5%
Rate of increase in compensation levels... 0%-5% 0%-5%
Expected long-term rate of return on
assets.................................. 8.0% 8.0%

Plan assets consist primarily of debt and equity investments.

F-15
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) Pension and Profit Sharing Plans: (continued)

The Company has a defined contribution profit sharing plan covering
substantially all of its employees. Participants must be at least 21 years
of age and have completed one year of service and may contribute up to 10%
of their earnings. The Company matches 25% of the first 4% of participants
earnings which are contributed to the Plan. For the year ended June 30,
1995, the Company issued 3,179 shares of common stock to the Plan. For the
years ended June 30, 1995, 1994 and 1993, Company contributions were
approximately $59,100, $64,400 and $59,400, respectively.

(8) Related Party Transactions:

Tax-sharing agreement--

The Company and Medco had a tax-sharing agreement which provided,
among other things, for the allocation of federal income taxes on a
separate company basis prior to July 6, 1989 and other related matters with
respect to income taxes of the Company.

Services agreement--

Through December 14, 1994, the Company and Medco had a services
agreement pursuant to which Medco provides the Company with various
services of its management. The Company paid the actual costs of providing
these services. Where actual costs were not available, the Company paid
amounts based on mutually agreed upon allocation methods. Costs for such
services were approximately $337,000, $429,000 and $407,500 for the years
ended June 30, 1995, 1994 and 1993, respectively.

Sales to former affiliate--

Medco purchased $2,569,000, $2,312,000, and $1,843,000 of plastic
vials manufactured by the Company for the years ended June 30, 1995, 1994
and 1993, respectively. These sales were based on prices and terms
generally available to non-affiliates. Pursuant to an agreement, Medco
will continue to purchase such plastic vials until December 14, 1996.
Through December 14, 1995, the cost to Medco of the plastic vials is the
price in effect on the date of the agreement, at which time the price will
increase by 3%, subject to certain adjustments.

(9) Stock Options:

In May 1989, the Company adopted two stock option plans, the 1989
Class A Stock Option Plan (the "Class A Plan") and the 1989 Class B Stock
Option Plan (the "Class B Plan"). In September 1991, the Company adopted
the 1991 Special Non-qualified Stock Option Plan (the "1991 Special Plan")
and in December 1991, the Company adopted the 1991 Director Stock Option
Plan (the "Director Plan") (collectively, the "Plans"). Non-Qualified
stock options are granted under the Class A Plan, the 1991 Special Plan and
the Director Plan. Options granted under the Class

F-16
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(9) Stock Options: (continued)

B Plan may be either incentive stock options or non-qualified stock
options. Eligibility for the grant of options under the Class A Plan and
the Director Plan are limited to certain of the Company's directors.
Eligibility for the grant of options under the Class B Plan and the 1991
Special Plan are limited to the Company's officers, certain directors,
employees, consultants, agents and key contractors. No options under the
Plans may be exercised during the first year after the date of grant, and
options granted under the Plans become exercisable at a rate of 20% in each
successive year after the date of grant. No options may be granted under
any of the Plans after October 8, 2001, and all options expire within ten
to fifteen years from the date of the grant. Under the Class B Plan, the
1991 Special Plan and the Director Plan, the exercise price may not be less
than 100% of the fair market value of the Company's common stock on the
date of grant. Under the Class A Plan, the exercise price may not be less
than 85% of the fair market value of the Company's common stock on the date
of grant. All options granted under the Class A Plan had an exercise price
equal to 100% of the fair market value on the date of grant. There are
4,058,370 shares reserved for issuance under the Company's Plans.

In addition to the Company's stock option plans, the Company has
granted options to certain directors, consultants and key employees. At
June 30, 1995, there were 220,000 options granted to these individuals.
The terms of these grants are similar to the Company's non-qualified stock
option plans.

A summary of stock option transactions is shown below:

<TABLE>
<CAPTION>
Years Ended June 30,
-----------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Options outstanding,
beginning of period...... 3,239,830 3,748,210 2,554,550
Options granted........... 1,228,000 168,800 1,592,700

Options exercised......... (364,570) (31,800) (281,210)
Options cancelled......... (511,360) (645,380) (117,830)
---------- ---------- ----------

Options outstanding, end
of period................ 3,591,900 3,239,830 3,748,210
========== ========== ==========

Options available for
grant, end of period..... 686,470 573,110 596,530
========== ========== ==========

Options exercisable, end
of period................ 1,846,300 1,912,100 919,550
========== ========== ==========
Price range of
outstanding options,
end of period............ $ 5.25 $ 5.25 $ 5.25
to to to
$ 21.50 $ 22.00 $ 21.50
========== ========== ==========
Average price of options
exercised................ $ 11.82 $ 5.25 $ 5.63
========== ========== ==========
</TABLE>

F-17
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(10) Commitments and Contingencies:

Leases--

The Company leases warehouse space, equipment and automobiles under
various noncancellable operating leases. Rental expense was $197,000,
148,000 and $137,000 for the fiscal years ended June 30, 1995, 1994 and
1993, respectively. The minimum aggregate rental commitments under
noncancellable leases, excluding renewal options, are as follows (in
thousands):

<TABLE>
<CAPTION>
Years Ending June 30,
---------------------
<S> <C>
1996................................ $188
1997................................ 45
1998................................ 20
1999................................ -
2000 and Thereafter................. -
</TABLE>

Employment agreements --

The Company had fee arrangements with two of its senior executive
officers, which terminated on May 19, 1994, which provided for the payment
of a fee to such officers in connection with certain acquisitions made by
the Company. Such fees totaled, in aggregate, approximately $563,000
during the fiscal year ended June 30, 1994.

Legal proceedings --

In the normal course of business, the Company is involved in various
claims and legal proceedings. While the ultimate resolution of these
matters has yet to be determined, the Company does not believe that their
outcome will have a material adverse effect on its financial position.

(11) Quarterly Financial Data (Unaudited):

The following table summarizes the quarterly financial data for the
fiscal years ended June 30, 1995 and 1994 (in thousands, except per share
data):

Income (loss)
Before Provision Net Income
Quarter Ended Net Sales For Taxes Net Income Per Share
- -------------------------- --------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>

1994
- ----
September 30, 1993... $ 7,632 $ 250 $ 154 $ .01
December 31, 1993.... 7,728 (356) (221) (.01)
March 31, 1994....... 8,472 726 449 .02
June 30, 1994........ 9,261 460 287 .02

1995
- ----
September 30, 1994... 8,954 794 481 .04
December 31, 1994.... 9,469 (4,395) (2,726) (.16)
March 31, 1995....... 9,865 1,030 644 .04
June 30, 1995........ 10,891 3,649 2,236 .13
</TABLE>

F-18
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(12) Fair Value of Financial Instruments:

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107, "Disclosures about Fair Value of
Financial Instruments." The estimated fair value amounts have been
determined by the Company using available market information and commonly
accepted valuation methodologies. However, considerable judgment is
required in interpreting market data to develop the estimates of fair
value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize in a current
market exchange. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value
amounts.

<TABLE>
<CAPTION>
At June 30, 1995
-------------------
Estimated
Carrying Fair
Amount Value
-------- ---------
<S> <C> <C>
(in thousands)
Assets:
Cash and cash equivalents.. $ 7,499 $ 7,499
Marketable securities...... 144,854 145,539

Liabilities:
Other long-term debt....... 216 216
</TABLE>

Cash and cash equivalents --

The carrying amounts of these items are a reasonable estimate of their
fair value.

Marketable securities --

Current and noncurrent marketable securities, consisting of publicly-
traded U.S. Treasury Notes and Money Market Preferred Stock investments,
are valued based on quoted market prices or dealer quotes.

Other long-term debt --

The carrying value of the remaining long-term debt is a reasonable
estimate of its fair value. (See Note 4)

The fair value estimates presented herein are based on information
available to the Company as of June 30, 1995. Although the Company is not
aware of any factors that would significantly affect the estimated fair
value amounts, such amounts have not been revalued since that date, and
current estimates of fair value may differ significantly from the amounts
presented herein.

(13) Supplemental Cash Flow information (in thousands):

<TABLE>
<CAPTION>
Years Ended June 30,
-----------------------
1995 1994 1993
------- ------ ------
<S> <C> <C> <C>
Interest Paid...... $ 2,870 $5,688 $5,737
Income Taxes Paid.. 27,435 604 3,574

</TABLE>

F-19
<PAGE>

SYNETIC, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended June 30, 1995, 1994 and 1993

Col. A Col. B Col. C Col. D Col. E
- --------------------------------- ---------- ---------------------- ------------ --------
Additions
----------------------
Balance at Charges to Charges to Balance at
Beginning Costs and Other End of
Description of Period Expenses Accounts (Deductions) Period
- --------------------------------- ---------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Deducted in the Balance Sheet
from the asset to which
it applies:

Allowance for doubtful accounts
and sales returns
June 30, 1995.................... $393,000 307,000 7,000 (71,000) $636,000
June 30, 1994.................... $229,000 164,000 13,000 (13,000) $393,000
June 30, 1993.................... $231,000 26,000 (11,000) (17,000) $229,000
</TABLE>

- ------------------------------------
(1) Write-off of uncollectible accounts and other reductions, net of
recoveries.

S-1
<PAGE>

INDEX TO EXHIBITS

Number Title
- ------ -----

3.1 Certificate of Incorporation of the Company, as amended. Incorporated
by reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-1 (No. 33-28654) (the "Registration Statement").

3.2 By-Laws of the Company, as amended. Incorporated by reference to
Exhibit 3.2 to Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1994 (the "1994 10-K").

4.1 Indenture dated as of December 1, 1991 between the Company and
NationsBank of Georgia, N.A. (formerly The Citizens and Southern
National Bank). Incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-1 (No. 33-43577).

10.1 1989 Class A Non-Qualified Stock Option Plan of the Company.
Incorporated by reference to Exhibit 10.1 to the Registration
Statement.*

10.2 1989 Class B Non-Qualified Stock Option Plan of the Company.
Incorporated by reference to Exhibit 10.2 to the Registration
Statement.*

10.3 1991 Director Stock Option Plan of the Company. Incorporated by
reference to Exhibit 4.2 to the Company's Registration Statement on
Form S-8 (No. 33-46640).*

10.4 Form of Stock Option Agreement dated as of May 17, 1989 between the
Company and the members of the Stock Option Committee of the Board
of Directors. Incorporated by reference to Exhibit 10.3 to the
Registration Statement.*

10.5 Retirement Plan for Salaried Employees of Porex Technologies Corp. of
Georgia. Incorporated by reference to Exhibit 10.4 to the
Registration Statement.*

10.6 Loan Agreement, dated as of April 1, 1985, between Development
Authority of Fulton County and Porex Technologies Corp. of Georgia.
Incorporated by reference to Exhibit 10.5 to the Registration
Statement.

10.7 Form of Indemnification Agreement between the Company and the
directors and officers of the Company. Incorporated by reference to
Exhibit 10.6 to the Registration Statement.

10.8 Form of Services Agreement between the Company and Medco. Incorporated
by reference to Exhibit 10.7 to the Registration Statement.

10.9 Form of Tax Sharing Agreement between the Company and Medco.
Incorporated by reference to Exhibit 10.8 to the Registration
Statement.

10.10 Form of Indemnification Agreement between the Company and Medco.
Incorporated by reference to Exhibit 10.9 to the Registration
Statement.

E-1
<PAGE>

10.11 Fee Arrangement with Martin J. Wygod and James V. Manning dated as of
May 18, 1989. Incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1990.*

10.12 Purchase and Sale Agreement, dated as of May 24, 1994, between Merck &
Co., Inc. and the Company (the "Purchase and Sale Agreement").
Incorporated by reference to Exhibit 99.1 to the Company's Current
Report on Form 8-K dated June 6, 1994.

10.13 Purchase Agreement, dated as of May 24, 1994, between Medco
Containment Services, Inc. and Porex Technologies Corp. Incorporated
by reference to Exhibit 10.23 to the 1994 10-K.

10.14 Stock Purchase Agreement, dated as of August 9, 1994, between the
Company and Pharmacy Corporation of America. Incorporated by
reference to Exhibit 10.24 to the 1994 10-K.

10.15 Amendment and Restated Investment Agreement, dated as of September 13,
1994, between Martin J. Wygod and the Company. Incorporated by
reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K dated September 16, 1994.

10.16 Form of Stock Option Agreement, made as of December 7, 1994, between
the Company and each of James V. Manning (for 150,000 shares), Paul
C. Suthern (for 180,000 shares), Victor L. Marrero (for 125,000
shares), David J. Schlanger (for 125,000 shares), Pamela B. Spira
(for 125,000 shares) and Anthony Vuolo (for 125,000 shares).
Incorporated by reference to Annex A to the Company's Proxy
Statement for its Annual Meeting of Stockholders held on May 17,
1995.*

21.1** Subsidiaries of the Company.

23.1** Consent of Arthur Andersen LLP.

23.2** Consent of Emens, Kegler, Brown, Hill & Ritter Co., L.P.A.

24.1** Powers of Attorney of the Company.

27** Financial Data Schedule

99.1 Excerpt from the Consulting Agreement between Merck & Co., Inc. and
Martin J. Wygod relating to provisions incorporated in the Purchase
and Sale Agreement. Incorporated by reference to Exhibit 99.1 to
the Company's Current Report on Form 8-K dated June 6, 1994.

___________________________
*Management contract or compensation plan or arrangement.

**Filed herewith.

E-2

<PAGE>

EXHIBIT 21.1

SUBSIDIARIES OF THE COMPANY

The following are the subsidiaries of Synetic, Inc. excluding subsidiaries the
omission of which is permitted under Item 601(b)(21) of Regulation S-K.

Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------

Porex Technologies Corp. Delaware
Porex Scientific, Inc./1/ Delaware
SYNC Corp. New Jersey

- ----------------
/(1)/ A wholly owned subsidiary of Porex Technologies Corp.

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 10-K into the previously filed Registration
Statements of Synetic, Inc. and Subsidiaries on Form S-8 (File Nos. 33-34925,
33-34926, 33-38446, 33-46639 and 33-46640).

ARTHUR ANDERSEN LLP

New York, New York
September 28, 1995

<PAGE>

EXHIBIT 23.2

[Letterhead of Emens, Kegler, Brown, Hill & Ritter]

September 28, 1995

Synetic, Inc.
669 River Drive
Elmwood Park, NJ 07407-1361

Dear Ladies and Gentlemen:

We hereby consent to the incorporation by reference into the Synetic,
Inc. Registration Statements on Form S-8 (File Nos. 33-34925, 33-34926, 33-
38446, 33-46639 and 33-46640), including the Form S-3 resale prospectuses
included therein, filed with the Securities and Exchange Commission, of the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995.
We also consent to all references to our firm included in such Registration
Statements.

Columbus, Ohio
September 28, 1995
Very truly yours,

EMENS, KEGLER, BROWN, HILL
& RITTER CO., L.P.A.

By: /s/ Jack A. Bjerke
-------------------------------
Jack A. Bjerke, Vice President

<PAGE>

EXHIBIT 24.1

SYNETIC, INC.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint Paul C. Suthern and James V. Manning and each of them, each with
full power to act without the other, his true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign the Annual
Report on Form 10-K of Synetic, Inc. for the fiscal year ended June 30, 1995
(the "Annual Report") and to sign any and all amendments to the Annual Report,
and to file the same, with all exhibits thereto and all other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each of said attorneys-in-fact and agents or
any of them may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ Thomas R. Ferguson
------------------------------
THOMAS R. FERGUSON
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ Mervyn L. Goldstein, M.D.
-----------------------------
MERVYN L. GOLDSTEIN, M.D.
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 21st day of September, 1995.

/s/ Ray E. Hannah
--------------------------
RAY E. HANNAH
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ Roger H. Licht
-----------------------------
ROGER H. LICHT
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ Per G.H. Lofberg
-----------------------------
PER G.H. LOFBERG
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ Charles A. Mele
----------------------------
CHARLES A. MELE
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 22nd day of September, 1995.

/s/ Herman Sarkowsky
------------------------------
HERMAN SARKOWSKY
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ Martin J. Wygod
---------------------------
MARTIN J. WYGOD
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ Albert M. Weis
----------------------------
ALBERT M. WEIS
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint James V. Manning, with full power to act as his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K of Synetic, Inc. for the
fiscal year ended June 30, 1995 (the "Annual Report") and to sign any and all
amendments to the Annual Report, and to file the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite
and necessary to be done as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorney-in-
fact and agent may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ Paul C. Suthern
-----------------------------
PAUL C. SUTHERN
<PAGE>

SYNETIC, INC.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint Paul C. Suthern, with full power to act as his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K of Synetic, Inc. for the
fiscal year ended June 30, 1995 (the "Annual Report") and to sign any and all
amendments to the Annual Report, and to file the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite
and necessary to be done as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorney-in-
fact and agent may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of this 27th day of September, 1995.

/s/ James V. Manning
------------------------------
JAMES V. MANNING

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SYNETIC,
INC.'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1995 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 7,499
<SECURITIES> 144,854
<RECEIVABLES> 7,301
<ALLOWANCES> 636
<INVENTORY> 5,446
<CURRENT-ASSETS> 121,641
<PP&E> 30,482
<DEPRECIATION> 13,523
<TOTAL-ASSETS> 188,174
<CURRENT-LIABILITIES> 16,362
<BONDS> 0
<COMMON> 219
0
0
<OTHER-SE> 166,613
<TOTAL-LIABILITY-AND-EQUITY> 188,174
<SALES> 39,179
<TOTAL-REVENUES> 39,179
<CGS> 23,006
<TOTAL-COSTS> 23,006
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,619
<INCOME-PRETAX> 1,078
<INCOME-TAX> 443
<INCOME-CONTINUING> 635
<DISCONTINUED> 15,459
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,094
<EPS-PRIMARY> .93
<EPS-DILUTED> 0

</TABLE>