To all, from BW:
Labor dispute at Atomic Energy of Canada settled
Jun 26, 1997 3:54 PM [Business Wire]
WOODLAND HILLS, CALIF. (June 26) BUSINESS WIRE -June 26, 1997--Syncor International Corp. (Nasdaq:SCOR) Thursday announced that the nuclear-medicine community experienced a temporary interruption in the supply of molybdenum (99Mo) -- the parent isotope of technetium (99Tc) -- due to a labor dispute, which was settled on Tuesday, June 24, 1997, by the Atomic Energy of Canada Ltd. (AECL).
Molybdenum is the source for technetium, a crucial isotope used in the practice of nuclear medicine. In North America, the nuclear- medicine community is dependent on AECL as a major supplier for molybdenum.
The AECL operates the nuclear reactor in Chalk River, Ontario, which produces molybdenum. This interruption in the supply of molybdenum impacted Syncor's sales during the labor dispute, since the company derives approximately 60 percent of net sales per day from technetium-based products.
As a result of the labor dispute, Syncor estimates, it lost approximately $1.4 million in net sales and $500,000 in pharmacy profit. The impact on net income is expected to be in the range of $300,000 to $400,000, or earnings per share of 3 cents to 4 cents.
Because radioactive isotopes decay naturally, it is impossible to stockpile molybdenum for use during temporary shortages. During the labor dispute, which lasted six days, Syncor and other radiopharmaceutical manufacturers explored alternative molybdenum sources around the world and pursued other means to mitigate the impact of this interruption.
Measures that were implemented to mitigate the shortage and maximize utilization of the available supply of molybdenum included using nontechnetium radiopharmaceuticals and the rescheduling of elective and other noncritical imaging procedures.
"Syncor worked closely with our customers, suppliers, manufacturers and industry groups to ensure maximum utilization of the available supply of molybdenum during the labor dispute," said Robert Funari, Syncor's president and chief executive officer.
"Syncor will continue to pursue a balanced effort to mitigate the overall impact of this shortage and remains committed to seeking innovative ways to ensure outstanding customer service and satisfaction. We are confident in our ability to continue to
service our customers with a full line of products."
On Tuesday, June 24, 1997, Syncor learned that an acceptable agreement between the labor union and AECL was arrived at to resolve the labor dispute. However, it is estimated that the nuclear reactor at Chalk River, which produces the molybdenum, will not be fully functional for up to three days.
Syncor anticipates that beginning Tuesday, July 1, 1997, it should be in a position to offer its customers all technetium-based products, hence eliminating the conservation efforts that were implemented earlier this week.
Syncor International compounds and dispenses radiopharmaceutical products -- in patient-specific unit doses and multidose form -- for use in diagnostic imaging and therapy. Syncor distributes these time-critical products through an expanding network of nuclear- pharmacy service centers -- 119 domestic and 10 international.
This network, which services more than 7,000 customers, is the only one of its kind providing both diagnostic and information services to hospitals and alternate-site nuclear-medicine facilities nationwide.
Additionally, Syncor is broadening its business base beyond its core commercial radiopharmacy operations. Through a joint venture announced in February 1997, Syncor plans on expanding its presence in the medical imaging field. Syncor anticipates operating 10 "open" MRI (magnetic resonance imaging) centers across the United States during the first year of operations.
In addition, Syncor has entered the radiopharmaceutical manufacturing field with the purchase of an Iodine-123 business. -0-
This news release contains forward-looking statements, including but not limited to those regarding an expected impact on the company's net sales and earnings. While these statements reflect the company's best current judgment, they are subject to risks and uncertainties that could cause actual results to vary. In addition to factors noted, other risk factors listed from time to time in the company's Securities and Exchange Commission reports, including, but not limited to, the MD&A (Management's Discussion and Analysis) discussion in the company's 1996 annual report incorporated by reference in the company's Form 10-K for the year ended Dec. 31, 1996.
Investor Web Page: stockprofiles.com News on Demand: 800/546-8172
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CONTACT: Syncor International Corp., Woodland Hills
Mary L. Meusborn, 818/737-4643 (investors)
Michael Guastella, 818/737-4693 (media) |
