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SECURITIESAND EXCHANGE COMMISSION

WASHINGTON,D.C.  20549

_____________________________________________________

**FORM10-K/A-1**

**[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

**______________________________________________________**

**For theFiscal Year Ended December 31, 2001**

**Commission File Number 0-8640**

**SYNCORINTERNATIONAL CORPORATION**(Exact name of registrant as specified in itscharter)
|             | **Delaware**                                                  |                                    | **85-0229124**                      |
|--------------------------------------------------------------------|---------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------|
|                                                                    | (State orother jurisdiction of incorporation or organization) |                                                                                                                                                                                                              | (I.R.S.Employer Identification No.) |
|                                                          |                                                               |                                                                                                                                                                                                              |                                     |
|                                                                    | **6464Canoga Avenue, Woodland Hills, California**             |                                                                                                                                                                                                              | **91367-2407**                      |
|                                                                    | (Address ofprincipal executive offices)                       |                                                                                                                                                                                                              | (ZipCode)                           |

**(818) 737-4000**(Registrant’s telephone number, including areacode)

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

**COMMONSTOCK $.05 PAR VALUE**(Title of Class)

Indicate by check markwhether the Registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes Ö  No     

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of RegulationsS-K (§ 229.405 of this chapter) is not contained herein, andwill not be contained, to the best of registrant’s knowledge,in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to thisForm 10-K.     

The aggregate market valueof the voting stock held by non-affiliates of the Registrant,computed by reference to the average closing bid and asked pricesof such stock on March 25, 2002, was $613,263,495.  Forpurposes of the foregoing calculation, each executive officer anddirector of Registrant was deemed an “affiliate” ofRegistrant. The number of shares outstanding (excluding treasuryshares) of the Registrant’s $0.05 par value common stock asof March 25, 2002 was 24,756,517 shares.

**DOCUMENTS INCORPORATED BYREFERENCE**

Portions ofRegistrant’s definitive Proxy Statement forRegistrant’s Annual Meeting of Stockholders on June 17, 2002,are incorporated by reference into Part III of thisreport.

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**SYNCORINTERNATIONAL CORPORATION**

**TABLE OFCONTENTS**

**FORM10-K ANNUAL REPORT**

**December31, 2001**

  
| **                ** | **PARTI**    | **          ** |                                                                                                                                                       | **Page** |
|------------------------------------------------------------------------------------------------------|--------------|------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                                                                                                      | Item 1.      |                                                                  | BUSINESS                                                                                                                                              | 3        |
|                                                                                                      | Item 2.      |                                                                  | PROPERTIES                                                                                                                                            | 15       |
|                                                                                                      | Item 3.      |                                                                  | LEGALPROCEEDINGS                                                                                                                                      | 15       |
|                                                                                                      | Item 4.      |                                                                  | SUBMISSION OF MATTERS TO AVOTE OF SECURITY HOLDERS                                                                                                    | N/A      |
|                                                                                                      |    |                                                                  |                                                                                                                                                       |          |
|                                                                                                      | **PARTII**   |                                                                  |                                                                                                                                                       |          |
|                                                                                                      | Item 5.      |                                                                  | MARKET FORREGISTRANT’S COMMON EQUITY AND RELATED           STOCKHOLDERMATTERS                 | 16       |
|                                                                                                      |              |                                                                  |
|                                                                                                      | Item 6.      |                                                                  | SELECTED FINANCIALDATA                                                                                                                                | 17       |
|                                                                                                      | Item 7.      |                                                                  | MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL           CONDITIONAND RESULTS OF OPERATIONS | 18       |
|                                                                                                      |              |                                                                  |
|                                                                                                      | Item 7A.     |                                                                  | QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                             | 25       |
|                                                                                                      | Item 8.      |                                                                  | FINANCIAL STATEMENTS ANDSUPPLEMENTARY DATA                                                                                                            | 25       |
|                                                                                                      | Item 9.      |                                                                  | CHANGES IN ANDDISAGREEMENTS WITH ACCOUNTANTS ON           ACCOUNTINGAND FINANCIAL DISCLOSURE        | N/A      |
|                                                                                                      |              |                                                                  |
|                                                                                                      |    |                                                                  |                                                                                                                                                       |          |
|                                                                                                      | **PARTIII**  |                                                                  |                                                                                                                                                       |          |
|                                                                                                      | Item 10.     |                                                                  | DIRECTORS AND EXECUTIVEOFFICERS OF THE REGISTRANT                                                                                                     | 26       |
|                                                                                                      | Item 11.     |                                                                  | EXECUTIVECOMPENSATION                                                                                                                                 | 26       |
|                                                                                                      | Item 12.     |                                                                  | SECURITY OWNERSHIP OFCERTAIN BENEFICIAL OWNERS AND           MANAGEMENT                             | 26       |
|                                                                                                      |              |                                                                  |
|                                                                                                      | Item 13.     |                                                                  | CERTAIN RELATIONSHIPS ANDRELATED TRANSACTIONS                                                                                                         | 26       |
|                                                                                                      |    |                                                                  |                                                                                                                                                       |          |
|                                                                                                      | **PARTIV**   |                                                                  |                                                                                                                                                       |          |
|                                                                                                      | Item 14.     |                                                                  | EXHIBITS, FINANCIALSTATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                                                                                       | 26       |

******2**

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**EXPLANATORY NOTE**

On June 14, 2002, SyncorInternational Corporation entered into an agreement and plan ofmerger with Cardinal Health, Inc. and its wholly-owned subsidiary,Mudhen Merger Corp., pursuant to which Mudhen Merger Corp. willmerge into Syncor and we will become a wholly-owned subsidiary ofCardinal Health upon the satisfaction of various conditions,including approval of the merger agreement by ourstockholders.  Also, on June 14, 2002, we announced ourdecision to discontinue certain of our operations, including: ourU.S. medical imaging business operated under our subsidiary,Comprehensive Medical Imaging, Inc. (previously a separate segmentfor reporting purposes); certain overseas locations; and ourbrachytherapy seeds manufacturing operations.  The mergeragreement requires the filing of a proxy statement, which willincorporate by reference our Form 10-K for the year ended December31, 2001.  Since the Form 10-Q for the quarter ended June 30,2002 reflected the discontinued operations, the Form 10-K asoriginally filed by us on April 1, 2002 needs to be restated toreflect discontinued operations.  Accordingly, we are filingthis Form 10-K/A-1 to reflect discontinued operations for allperiods presented. 

This Form 10-K/A-1 alsoincludes certain additional disclosures required by the Staff ofthe Securities and Exchange Commission.  We are also filingwith this Form 10-K/A-1, as Exhibit 99.1, the Certification of CEOand CFO required by Section 906 of the Sarbanes-Oxley Act of2002.   

**PARTI**

**Item1.     BUSINESS.**

**Overview**

We are a provider ofspecialty services and products used in the diagnosis, treatmentand management of heart disease, cancer and other disorders. We are the nation’s leading provider of radiopharmacyservices.

Our 130 domesticradiopharmacies serve hospitals, medical clinics and medicalimaging centers in 48 states and supply more than 50% of theU.S. market for these specialized services.  We also own oroperate 15 radiopharmacies in 10 foreign countries and in PuertoRico.  Our radiopharmacies compound, dispense and distributepatient-specific radiopharmaceutical prescriptions, or unit doses,used in nuclear diagnostic imaging procedures.  We alsodistribute radiopharmaceuticals in bulk formanufacturers. 

A radiopharmaceutical is aradioactive compound formed by combining precise amounts ofradioactive materials with targeting compounds that concentrate inspecific human organs or tissues.  Radiopharmaceuticals, likeother pharmaceuticals, are prescribed by physicians based on theirpatients’ specific needs.  When administered to thepatient, the radiopharmaceutical can be detected with the use ofspecialized medical imaging equipment. Radiopharmaceutical nuclearimaging procedures are used by physicians primarily to detectirregularities in organ tissue or function in order to diagnoseheart disease, cancer and other disorders. Radiopharmaceuticals are also used in some cases to treat, manageand monitor disease.

The most common use ofnuclear imaging procedures is for the diagnosis of heartdisease.  We distribute Cardiolite®, made by Bristol-MyersSquibb, through a long-standing agreement that we originally hadwith DuPont Pharmaceuticals until it was acquired byBristol-Myers.  We have been instrumental in makingCardiolite® the best-selling cardiology imaging agent in theU.S.  We distribute Cardiolite® on an exclusive basiswithin specified geographic areas under our agreement withBristol-Myers. 

In addition, we haverecently undertaken new initiatives to produce and distribute othercomplex pharmaceuticals and products used in diagnosing andtreating disease and other health problems.  Complexpharmaceuticals are products that have challenging storage orhandling requirements, may require patient specific compounding orultra-precise dispensing accuracy, may require rapid response tocritical conditions or, due to its cost or limited availability,may require a stockless approach to inventory management. These products include F-18 Fluorodeoxyglucose, or FDG, andXigrisTM, which is manufactured by Eli Lilly andCompany.  We produce and distribute FDG, the most commonlyused radiopharmaceutical in positron emission tomography (PET), ahighly sensitive imaging technology used to diagnose cancer andmanage cancer therapies.  We have a strategic partnership withEli Lilly to be their exclusive rapid response provider of Xigris,a biotechnology compound used to treat severe sepsis, alife-threatening condition if not treated immediately.

**3**

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**Radiopharmacy ServicesIndustry**

Radiopharmaceuticals havea short shelf-life, because they utilize radioactive materials thatcontinuously decay.  Through the late 1970s, hospitalstypically operated their own on-site radiopharmacies thatcompounded radiopharmaceuticals as needed for each hospital'simaging needs, which was believed to be the only viable means ofhaving these time-sensitive products available for procedures whenneeded.  In 1974, we pioneered the concept of outsourcingunit-dose radiopharmacy services.  Our outsourcing approachhas been widely adopted because it lowers hospital inventory andother costs and expenses and enhances physician service andsupport.  Today, nearly 90% of radiopharmaceutical unit dosesare compounded off-site.

As the U.S. population hasincreased and life expectancies have continued to increase, thedemand for radiopharmacy services also has increased, particularlyin the areas of cardiology and oncology.  Although used formany imaging procedures, the most common use forradiopharmaceuticals is for cardiology imaging procedures. These procedures are very effective in revealing the size, shapeand other structural characteristics of the heart and other humantissues and have gained widespread clinical acceptance as importanttools in detecting and diagnosing certain heart problems.  Asthe benefits of preventative medicine are becoming more widespread,we believe that cancer-related radiopharmaceutical imagingprocedures and therapies also are gaining wideracceptance. 

Approximately 12 millionradiopharmaceutical imaging procedures were performed in the U.S.in 2001, including more than 150,000 PET imaging procedures. In 2001, the U.S. market for all radiopharmacy services wasapproximately $1.12 billion, of which about 66% related to heartimaging procedures and 11.5% related to cancer imagingprocedures.  From 1994 through 2001, radiopharmacy servicesexpenditures have grown at an estimated compounded annual growthrate of 10%, and we anticipate that the U.S. market forradiopharmacy services will continue to grow due, in part, to agingpopulation demographics and demand for less invasive methods ofdiagnosis and treatment.

We believe that advancesin medical imaging technology and new applications for nuclearimaging procedures also will contribute to increased demand forradiopharmacy services.  For example, PET imaging can revealfunction, or metabolism, at the cellular level, whichdifferentiates it from other imaging procedures such as MRI and CTimaging, which primarily demonstrate structure, or anatomy. PET is a clinically proven, safe method for the imaging of anincreasing number of diseases and disorders, including coloncancer, lung cancer, breast cancer, lymphoma, brain cancer, heartdisease and neurological disorders such as Alzheimer’sDisease.  PET imaging can be used to visualize rapidly growingtumors, to determine tumor response to radiation or chemotherapy,to diagnose recurrence of tumor growth after surgical removal, todecide the best location for a biopsy of a suspected tumor and todifferentiate harmless scarring, or radiation necrosis, from newtumor growth.  PET imaging also is a useful tool fordetermining whether exploratory surgery, radiation therapy, organtransplantation or other procedures may be necessary.

**CompetitiveStrengths**

**We believe thecompetitive strengths of our business include:**

***               Market Leadership***

We own and operate 130radiopharmacies nationwide, or more radiopharmacies than our threelargest competitors combined.  Our radiopharmacies can deliverradiopharmaceuticals within 90 minutes to hospitals, medicalclinics and medical imaging centers that perform more than 90% ofall radiopharmaceutical imaging procedures performed in the U.S. in2002.  Radiopharmaceuticals are time-sensitive, withhalf-lives ranging from 110 minutes to eight days, with themajority of the radiopharmaceuticals we dispense having a half lifeof six hours.  Accordingly, our proximity to our customers isone of our principal strengths. 

Our established nationaldistribution channels have enabled us to establish exclusiverelationships with leading companies who seek a nationaldistribution channel.  We are the exclusive distributor ofBristol-Myers' Cardiolite® in specified geographic areassurrounding most of our U.S. radiopharmacies.  Cardiolite®has become the best-selling cardiac imaging agent in the U.S. sincewe began distributing it.  We also recently entered into anexclusive arrangement with Eli Lilly to distribute its Xigrisproduct on an emergency basis nationwide.  Xigris is a complexbiotechnology compound for treating severe sepsis, alife-threatening condition if not treated immediately.  Weoffer Eli Lilly the unique ability to distribute Xigris withinthree hours to most hospitals nationwide. 

**4**

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***               Superior Service***

Our radiopharmaciesoperate under a single set of business processes and informationsystems that enable us to provide prompt, reliable service, rapidlyimplement new services and products and provide valuableinformation on product usage to manufacturers and othersuppliers.  We can receive and process customer orders anddeliver patient-specific unit doses 24 hours a day, 7 days aweek.  This enables our customers to obtain the correct dosesat the right time in order to effectively scheduleradiopharmaceutical imaging procedures.  In 2001, wecompounded and dispensed more than approximately 7 million unitdoses with a reported dispensing error rate of approximately1/100,000.  We also remove and dispose of the contaminatedsyringes containing radioactive materials from our customersites.  Our tracking systems allow our customers to meetgovernmental reporting requirements.

***               Broad Range of Services and Products***

We offer more than 50brand name and generic radiopharmaceuticals.  We are applyingour strengths developed in the marketing and distribution ofCardiolite® to position ourselves to become a major provider ofPET radiopharmaceuticals, brachytherapy seeds and othertime-sensitive, complex pharmaceutical products, such as Xigris,where we believe there are other marketing opportunities. InFebruary 2002, we entered into an agreement with IDECPharmaceuticals Corporation to distribute Zevalin, a novelradioimmunotherapy recently approved by the US Food and DrugAdministration for the treatment of certain Non-Hodgkin'sLymphomas.  We believe that our leading market share andproven ability to enhance product brands will help to assure ouraccess to new radiopharmaceuticals and other products suitable forrapid distribution through our nationwide radiopharmacynetwork.

***               Innovation and Product Safety***

We have a long history ofproviding innovative solutions to our customers’ needs withservices and products that enhance the safety and performance ofthe products we distribute.  We pioneered the concept ofoutsourcing radiopharmacy services in 1974.  Our radiopharmacyinnovations also include our patented tungsten radiopharmaceuticaldelivery systems, commonly known as “Pigs,” and ourSECURE® Safety Insert Systems, which set new standards for thesafe handling and delivery of radiopharmaceuticals and ease of usein compliance with rigorous regulations governing ourindustry.

***                IntegratedInformation Technology and Customer Support***

We have developed a numberof proprietary information system technologies, includingSYNtracTM, Unit Dose ManagerTM and NucLinkTM, toassist our customers in the management of their nuclear medicinedepartments and radiopharmaceutical inventories, to make thecalculation of patient-specific radiopharmaceutical prescriptionseasier, and to facilitate electronic communication with our localradiopharmacies.  These systems are used by more than 1,600 ofour radiopharmacy customers to meet the extensive record-keepingand other regulatory requirements applicable to theirbusinesses.  We believe that gaining access to SYNtrac andother systems and our logistics management skills is an importantfactor in many customers’ decisions to enter into multi-yearprimary supplier agreements with us.

**RadiopharmacyBusiness**

Our radiopharmaciesprimarily compound, dispense and distribute patient-specificradiopharmaceutical prescriptions, or unit doses, used in nucleardiagnostic imaging procedures.  Our radiopharmacy customerstypically order individual patient prescriptions forradiopharmaceutical unit doses by telephone or via a directcomputer link-up with our radiopharmacies.  As we receiveprescriptions, we schedule them for compounding, dispensing anddelivery to the customer.  Compounding of unit doses involvesmixing a radioactive isotope, which is constantly decaying, withthe appropriate pharmaceutical.  Our radiopharmacistscalculate the precise amount of radioisotope that will deliver thecorrect dosage at the scheduled time of use, taking into accountthe rate of decay.  Unit doses are typically drawn from a vialinto a syringe for transportation and administration.  Becausethe radioisotopes used in radiopharmaceuticals emit radiation, theymust be stored and delivered in specialized containers.  Wehave developed proprietary, OSHA-compliant, radiopharmaceuticaldelivery systems, including our SECURE® Safety Insert Systemsand our line of tungsten containers, commonly known as "Pigs," thatallow for the safe transport and handling of radioactive substancesand reduced radiation exposure to our radiopharmacy personnel andcustomers.

Once theradiopharmaceutical unit dose is prepared, we coordinate thedelivery of the unit dose directly to the customer’s point ofuse through our staff of 862 customer service assistants and fleetof more than 800 delivery vehicles nationwide.  Mostdeliveries are made next-day, within one to six hours before thescheduled imaging procedure.  Because the radioisotope isconstantly decaying, reliable and timely delivery isessential.  Our 130 radiopharmacies nationwide can deliverradiopharmaceuticals within 90 minutes to hospitals, medicalcenters and medical imaging centers that performed more than 90% ofall radiopharmaceutical imaging procedures performed in the U.S. in2001.  This enables us to process prescription orders forscheduled radiopharmaceutical patient imaging procedures in atimely and cost effective manner and to provide unscheduledemergency services. 

**5**

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After theradiopharmaceutical has been administered to the patient, thesyringe is placed back into the same container in which wedelivered it to be picked up and returned to our radiopharmacy byour customer service assistants.  We take responsibility fordisposing of the used syringe and maintaining appropriate recordsthat the product was compounded, delivered and disposed of inaccordance with the myriad of regulations covering the use,handling and disposal of radioactive materials.

***               Services and Products***

We compound, dispense anddistribute unit-dose radiopharmaceuticals made by a number ofmanufacturers. We also distribute radiopharmaceuticals in bulk tohospitals and other customers that compound and dispense theproduct themselves.

Our primary products arecardiology imaging agents used in diagnosing heart problems. In 2001, sales of Cardiolite® represented an estimated 58% ofsales of all cardiac imaging agents in the U.S. and 53.4% of ourtotal sales from continuing operations.

We act as the primarydistributor of Cardiolite, as well as a distributor ofBristol-Myers' other radiopharmaceutical products, under the termsof a supply and distribution agreement with Bristol-Myers. Under the terms of the agreement, we have exclusive rights todistribute Cardiolite within specified geographic areas surroundingmost of our existing U.S. radiopharmacies.  Our exclusiverights to distribute Cardiolite also extend to new radiopharmaciesthat we may develop or acquire in local markets where Bristol-Myershas no preexisting distribution arrangement.  In othermarkets, and in areas outside of the specified areas surroundingour radiopharmacies, our rights to distribute Cardiolite arenonexclusive.  Our rights to distribute other Bristol-Myersproducts, including Thallium, also are nonexclusive.

Our other principalradiopharmacy products include Thallium, a generic cardiac imagingagent, which accounted for 8.2% of our net sales in 2001 fromcontinuing operations.  No other product constitutes more than1.8% of our net sales from continuing operations.

We also produce FDG, whichwe distribute through our network of radiopharmacies.  FDG isthe most commonly used radioisotope in PETradiopharmaceuticals.  When administered intravenously, FDGcan reveal how certain organs and tissues are functioning bymeasuring glucose metabolism.  It is widely used to studyorgan and tissue functions in neurology, cardiology andoncology.  FDG is produced in cyclotrons and has a half-lifeof only 110 minutes.  In order to effectively provide PETradiopharmaceuticals, it is essential to have adequate supplies ofFDG in proximity to the radiopharmacy where the PETradiopharmaceutical is to be compounded and dispensed.  Toensure an adequate supply of FDG, we have built or acquired 8cyclotron facilities in key markets and have entered intoarrangements with several local universities and other cyclotronowners and operators to supply us with this critical component ofPET radiopharmaceuticals in other markets.

We also produce anddistribute Iodine-123 capsules.  Iodine-123 is aradiopharmaceutical used to diagnose and treat thyroiddisorders.  We manufacture Iodine-123 capsules at our Golden,Colorado facility. 

We have other businessesthat complement our radiopharmacy services business.  Weprovide radiology technical staff on a temporary or full-time basisto hospitals, radiology clinics, nuclear cardiology clinics andphysician offices in over thirty markets nationwide.  OnAugust 1, 2001, we acquired Inovision Radiation Measurements, LLCand its affiliate, Victoreen, LLC, both of which now operate asSyncor Radiation Management, LLC.  As a result of theacquisition, we now manufacture and supply radiation measurementequipment and related accessories used by nuclear medicinedepartments, radiopharmacies and other businesses that handleradioactive materials.  On August 31, 2001, we acquiredInteCardia, Inc., a provider of cardiovascular services through theoperation of a state-of-the-art cardiac diagnostic facility thatoffers outpatient cardiac catheterization, nuclear cardiology andechocardiography.  InteCardia also offers nuclear cardiologygroups with full turnkey services, including the provision ofimaging and cardiac stress equipment and nuclear medicinetechnologists.  Overseas, we also own or operate 18 medicalimaging centers in four foreign countries.  Our foreignmedical imaging centers include two catheterizationlabs.

***               Proprietary Systems and Technologies***

In 1994, we introduced theSECURE® Safety Insert System, which is designed to eliminatethe potential for contamination of lead-lined or tungstenradiopharmaceutical containers with radioactive material or theblood from used radiopharmaceutical syringes.  With oursystem, the risk of needle sticks also is reduced significantly. Webelieve that our patented SECURE® Safety Insert System is theonly system currently available that meets new, more stringent OSHAindustry standards that went into effect in July 2001.  Wealso have patent rights to a family of tungsten radiopharmaceuticaldelivery systems that we refer to as the “Pigs.” The Pigs are radiopharmaceutical containers that are smaller andweigh considerably less than traditional containers used totransport radiopharmaceuticals and set new industry standards forthe safe transport and handling of radiopharmaceuticals, includingFDG.  Our tungsten containers also provide enhanced radiationshielding compared to lead-lined delivery systems typically used byour competitors, resulting in a reduction in radiation exposure toour pharmacy personnel and customers.

**6**

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We also license to ourcustomers our proprietary Windows-based SYNtrac, Unit Dose Managerand NucLink integrated software and hardware systems to assist themin the management of their nuclear medicine departments and tofacilitate electronic communication with our radiopharmacies. As of December 31, 2001, we licensed our software systems to morethan 1,600 of our radiopharmacy customers.

***               Customers***

We provide radiopharmacyservices and products to hospitals, medical centers and medicalimaging clinics in 48 states in the U.S., Puerto Rico and 10foreign countries.  Our principal radiopharmacy servicecustomers are:

           *****         corporate account customers such as group purchasing organizations,or GPOs;

           *****         local independent hospitals and medical clinics; and

           *****         community-based, multiple-facility integrated healthcare networks,or IHNs.

Corporate accountcustomers, either GPOs or proprietary multi-hospital groups,negotiate contracts on behalf of IHNs, independent hospitals, andclinics.  These contracts are multi-year contracts, althoughcertain contracts have clauses that permit the GPO ormulti-hospital group to cancel the contract if certain conditionsoccur. We estimated that we have 1,165 customers committed under anational or regional contract. Sales to members or affiliates ofour corporate account customers were approximately $225 million in2001, representing nearly 38% of our net sales from continuingoperations, compared to approximately $187 million, or nearly 36%of our net sales in 2000 from continuing operations.  Ourlargest corporate account customers include AmeriNet  Inc. andHealth Trust Purchasing Group (formerly Columbia/HCA).  In2001, sales to AmeriNet and Health Trust represented 13% and 8%,respectively, of our net sales from continuing operations.  Noother corporate account customer accounts for as much as 5% of ournet sales from continuing operations.

We also have customersthat are affiliated with GPOs that do not have contracts withus.  Sales to these customers were approximately $191 millionin 2001, representing nearly 32% of our net sales from continuingoperations, compared to approximately $168 million, or 32.5% of ournet sales in 2000 from continuing operations.  No customers inthis sales category accounted for as much as 5% of our netsales.

Despite the fact that themajority of IHNs and hospitals hold membership or are affiliatedwith a GPO or proprietary multi-hospital group, some IHNs and localindependent hospitals choose not to participate in a nationalagreement.  Our sales to these customers were approximately$133 million in 2001, representing nearly 22.2% of our net salesfrom continuing operations.  This compares to $104 million,representing 20.1% of our net sales in 2000 from continuingoperations.  No local independent hospital or clinic accountedfor as much as 5% of our net sales from continuingoperations.

***               Sales and Marketing***

We marke***t***and sell our radiopharmacy services and products and services inthe U.S. directly through a dedicated sales force of more than 100national and regional sales and marketing personnel.  Oursales and marketing personnel are responsible for developing andmanaging customer relationships and for communicating the benefitsof working with Syncor.  To maintain a highly effective localpresence, our field sales force works closely with localradiopharmacy managers to ensure that our customers’expectations are met on a daily basis.  We also haveindividuals dedicated to targeting and managing contracts withmulti-hospital groups, including GPOs, proprietary hospitalsystems, and multi-hospital alliances.  In addition, we have aspecialty sales team designed to increase our sales in new areasseparate from traditional nuclear medicine, such asPET. 

We also rely indirectly onthe sales and marketing efforts by manufacturers of theradiopharmaceuticals we distribute.  For example, our salesand marketing force works closely with Bristol-Myers’ salesand marketing personnel to make joint sales calls, preparemarketing and sales materials and educate customers regarding theBristol-Myers products we distribute. 

***               Distribution***

We have a nationwidedistribution network consisting of a national distribution centerin Toledo, Ohio, and three regional distribution centers.  Ournational distribution center maintains a central warehouse ofcritical supplies in order to facilitate bulk-purchasing andminimize warehousing and inventory requirements at ourradiopharmacies.

**7**

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***               Competition***

Our radiopharmacies in theU.S. compete for both unit-dose sales, which account for 90% of theU.S. market, and sales of bulk products, which account for theremaining 10%.  We compete on a national level withradiopharmaceutical manufacturers that operate their ownradiopharmacies, including Amersham, PLC and MallinckrodtInc.  We also compete with Central Pharmacy Services, Inc., anationwide owner and operator of radiopharmacies.  We alsocompete in local markets across the U.S. with independentradiopharmacies and universities that own and operate their ownradiopharmacies.

The key competitivefactors affecting our radiopharmacy services businessare:

           *****         speed and reliability of radiopharmacy services;

           *****         safety of radiopharmaceutical delivery systems;

           *****         geographic scope of operations;

           *****         range of radiopharmaceuticals and other productsoffered;

           *****         integration of order and delivery functions with customers’operations; and

           *****         record keeping and regulatory compliance.

Our PETradiopharmaceuticals compete with PET radiopharmaceuticals producedand distributed by PETNet Radiopharmaceutical Services, Inc.,Mobile P.E.T. Systems, Inc. and Eastern Isotopes.

**GovernmentRegulation**

Each of ourradiopharmacies in the U.S. is licensed by and must comply with theregulations of the U.S. Nuclear Regulatory Commission, or NRC, orcorresponding state agencies. In addition, each radiopharmacy islicensed and regulated by the Board of Pharmacy in the state whereit is located. Our manufacturing facility in Colorado and our FDGproduction facilities in Florida, California, Massachusetts,Missouri, Ohio, Pennsylvania, Texas and Washington, are licensed bythe respective states to handle radioactive materials and areregistered with the Food and Drug Administration, or FDA, asmanufacturing facilities. As FDA-registered manufacturingfacilities, they must comply with the FDA’s “currentgood manufacturing practices” standards.

Periodic inspections ofour radiopharmacies and manufacturing facilities are conducted bythe NRC, FDA and various other Federal and state agencies. Unsatisfactory inspection results could lead to escalatedenforcement action, the imposition of fines or the suspension,revocation or denial of renewal of the licenses for the locationinspected. We devote substantial human and financial resources toensure continued regulatory compliance by our radiopharmacies andmanufacturing facilities.

We are subject to variousFederal, state and local regulations relating to occupationalsafety and health and the use and disposal of bio-hazardousmaterials.  In addition, the products we dispense anddistribute through our U.S. radiopharmacies are subject toFederal, state and local regulations relating to drugs and medicaldevices.

Our transport ofradioactive materials is regulated by the U.S. Department ofTransportation, or DOT.  We audit our own radiopharmacies forDOT compliance.  The DOT, and corresponding state regulators,also conduct periodic and unannounced inspections of ourradiopharmacies for compliance with applicable regulations. Although we believe that our safety practices and procedures forstoring, handling, transporting, and disposing of radioactive,bio-hazardous, and other hazardous and non-hazardous materialscomply with applicable laws, regulations, and standards, we cannoteliminate completely the risk of accidental contamination or injuryfrom such materials.  In the event of a spill or release, wecould be held liable for damages that result, and any liabilitycould exceed the limits or fall outside our insurancecoverage.  We also could incur business interruption or otherloss of business as a result of such an event.  Furthermore,there can be no assurance that there will not be future changes tothe regulatory programs applicable to us, and those changes couldforce us to make significant changes to our processes, procedures,or materials or to make investments in capital improvements to ourfacilities.

The need to comply withapplicable environmental laws and regulations, such as thoseregulating the use and disposal of radioactive materials, isinherent in our industry and the normal operations of ourradiopharmacies and our manufacturing facilities. Historically,compliance with such laws and regulations has not had a materialadverse effect on our capital expenditures, earnings or competitiveposition.

**8**

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The Centers for Medicareand Medicaid Services, or CMS (formerly the Health Care FinancingAdministrations, or HCFA), the U.S. agency that establishesMedicare reimbursement policies, regularly re-evaluatesreimbursement rates for all health care provider services and hasreduced such rates in the past.  Starting August 1, 2000,CMS began using prices submitted by manufacturers to setreimbursements for many hospital outpatient drugs, includingradiopharmaceuticals, instead of reimbursing these products as adirect cost pass-through.  Since our sales ofradiopharmaceuticals are made to hospitals and clinics, we get paidby them, not reimbursed by CMS.  The introduction of setreimbursement rates nevertheless could have an impact on the pricesthat customers will be willing to pay for the radiopharmaceuticalsthat they purchase from us, and that impact, in turn, could affectour revenues.  We are not able to predict the long-term impactof this change in the reimbursement system upon ourbusiness.

We are also subject to theFederal fraud and abuse laws governing provider and supplierrelationships with Federal healthcare programs, including Medicareand Medicaid.  One such law, the Federal Anti-KickbackStatute, prohibits payments made in exchange for referral of itemsor services covered by Federal health care programs, includingMedicare and Medicaid.  This law is extremely broad.  Itprohibits fraudulent claims, kickbacks, rebates and bribes, as wellas payment of any form of remuneration, in cash or in kind, inreturn for referrals of business paid for by Federal health careprograms.  Also prohibited are any payments made to those in aposition to recommend purchasing, leasing, or ordering any goods,services, or items for which payment may be made under Federalhealth care programs.  Failure to comply with theAnti-Kickback Statute can result in a felony conviction,imprisonment, significant fines, and exclusion from the Medicareand Medicaid programs.

Recognizing that the lawis broad and may technically prohibit beneficial arrangements, theOffice of the Inspector General ("OIG") of the Department of Healthand Human Services developed regulations addressing those types ofbusiness arrangements that will not be subject to scrutiny underthe law.  These "Safe Harbors" describe activities that maytechnically violate the act, but which are not to be consideredillegal when carried on in conformance with the regulations. For example, the Safe Harbors cover activities such as offeringdiscounts to health care providers and contracting with physiciansor other individuals that have the potential to refer business tous that would ultimately be billed to Medicare orMedicaid.

The OIG periodicallyissues Fraud Alerts identifying practices it believes may violateFederal fraud and abuse laws.  One Fraud Alert addressed jointventure and contractual arrangements between healthcareproviders.  Another concerns prescription-drug marketingpractices.  Drug marketing activities may implicate theFederal fraud and abuse laws because the cost of drugs is oftenreimbursed by Medicare and Medicaid.  According to the FraudAlert, questionable practices may include payments to pharmaciststo recommend a particular drug or product.  We try tostructure our business arrangements to comply with Federal fraudand abuse laws.  However, if we are found to have violated anyof these laws, we could suffer penalties, fines or possibleexclusion from Medicare, Medicaid or other governmentalprograms.  For example, our business arrangements may notfully meet the stringent criteria specified in the SafeHarbors.  Failure to qualify for Safe Harbor protection doesnot mean that an arrangement is illegal.  Rather, thearrangement must be analyzed under the Anti-Kickback Statute todetermine whether there is an intent to pay or receive remunerationin return for referrals.  Even though we continuously striveto comply with the requirements of the Anti-Kickback Statute,liability under the Anti-Kickback Statute may still arise becauseof the intentions of the parties with whom we do business. Conduct and business arrangements that do not fully satisfy one ofthe Safe Harbors may result in increased scrutiny by governmentenforcement authorities such as the OIG.

Many states have adoptedlaws similar to the Federal Anti-Kickback Statute.  Some ofthese state prohibitions apply to referral of patients for healthcare services reimbursed by any source, not just government healthcare programs.  Although we believe that we comply with bothFederal and state anti-kickback statutes, any finding of aviolation of these laws could subject us to criminal and civilpenalties or possible exclusion from Federal or state health careprograms.  Such penalties would adversely affect our financialperformance and our ability to operate our business.

The Federal False ClaimsAct and similar state statutes prohibit presenting, or causing tobe presented, a claim for payment under Medicare, Medicaid, andother Federally funded programs containing false or misleadinginformation.  Although our radiopharmacy services segment forthe most part does not submit claims for payment directly toFederally funded programs, the costs of our products are includedin the claims submitted by our customers to Federally fundedprograms.  Thus, liability could accrue to us if a findingwere made that we “caused” a false claim to bepresented to the government.  Violations of the False ClaimsAct can result in significant penalties and exclusion fromparticipation in the Medicare and Medicaid programs. Liability under the False Claims Act arises primarily when anentity knowingly submits a false claim for reimbursement to theFederal government.  Simple negligence should not give rise toliability, but submitting a claim with reckless disregard of itstruth or falsity could result in substantial civil liability. In addition to the civil provisions of the False Claims Act, theFederal government can use several other criminal statutes toprosecute persons who submit false or fraudulent claims for paymentto the Federal government.  The costs of defending claimsunder the False Claims Act, and, if a violation is found, the costof sanctions imposed under the Act, would adversely affect ourfinancial performance.

Our foreignradiopharmacies are subject to the regulations of the countries inwhich they operate.

**9**

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**Patents, Trademarks,and Licenses**

We own a number oftrademarks and patents, including patent rights to ourSECURE® Safety Insert System and our family ofradiopharmaceutical delivery systems known as“Pigs.”  SECURE® Safety Inserts isa registered trademark of ours, and NeRDTM, NucLinkTM,PETPigTM, PigletTM, Piglet2TM, PharmaSeedTM,SYNtracTM and UDMTM are trademarks ofours. 

We license ourSYNtracTM, UDMTM and NucLinkTM systems to ourcustomers to assist in the management of their nuclear medicinedepartments and to facilitate electronic communication between ourradiopharmacies and customers.

We believe that ourtrademarks, patents and licenses are important contributors to ourability to differentiate our radiopharmacy services from those ofour competitors and build mutually beneficial long-term customerrelationships.

**Medical ImagingBusiness**

During the second quarterof 2002, we announced that we are discontinuing our medical imagingbusiness operated by our subsidiary, Comprehensive Medical Imaging,Inc. (CMI), which we had historically presented as a separatesegment for reporting purposes.  The purpose of this sectionis to provide our investors with information relating to thisdiscontinued operation as of December 31, 2001. 

We own or operate 65free-standing outpatient medical imaging centers organized inclusters located primarily in Arizona, California, Florida andTexas. Each cluster offers a full complement of medical imagingservices, including MRI, CT imaging, X-ray, ultrasound,mammography, and fluoroscopy. 

Thirty-four of our centersoffer only MRI services, and the remaining 31 centers offer one ormore of the different types of imaging services, including 4centers that offer PET imaging.  At each of our centers, weschedule patient imaging procedures specified by the referringphysician and record all patient insurance and billinginformation.  The scheduled imaging procedures are performedby our medical technologists under the supervision of licensedradiologists who perform their services on an independentcontractor basis.  The radiologists consult with referringphysicians regarding the nature of the medical imaging proceduresthat are performed by our medical technologists and interpret themedical images. 

***               Customers, Contracts and Payors***

We depend primarily onphysician referrals for patients at our medical imagingcenters.  We focus on developing a strong physician referralnetwork and relationships with leading radiologists.  Webelieve that our regional differentiation, combined with our fullcomplement of medical imaging services, makes us attractive tomanaged care organizations and other payors, who increasinglyprefer to work with fewer healthcare services providers, includingmedical imaging services providers.

Our medical imaging netsales depend to a large extent upon the acceptance of outpatientdiagnostic imaging procedures as covered benefits under variousthird-party payor programs.  In order to be reimbursed forthese services, payment must be approved by private insurers orMedicare and Medicaid programs.  In 2001, Medicare andMedicaid accounted for approximately 15.5% of our total net salesfrom both continuing and discontinued operations, while managedcare organizations accounted for approximately 65.8%, andconventional indemnity insurance companies and workers’compensation each accounted for approximately 8.0%.  Otherplans, including self-pay, account for the remainder.

***               Imaging Systems Equipment***

We operate a variety ofmedical imaging systems.  As of December 31, 2001, we operated69 MRI systems, 22 CT systems, 6 PET systems (including 2 systemsin sites we managed but did not own) and 60 other systems,substantially all of which are owned by us.  We have madesignificant investments in purchasing, updating and maintaining oursystems in an effort to offer the latest, most advanced imagingsystems available.  As of December 31, 2001, approximately 44%of our systems were less than three years old.  We have theability to upgrade most of our current MRI and CT systems, which webelieve reduces the potential for technologicalobsolescence.

***               GovernmentRegulation***

The Federal government andall states in which we operate medical imaging centers regulatevarious aspects of our medical imaging servicesbusiness.

**10**

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Reimbursement for medicalimaging services is undergoing change as third-party payors, suchas Medicare and Medicaid, health maintenance organizations andother health insurance carriers, increase efforts to control thecost, utilization and delivery of healthcare services. Legislationhas been proposed or enacted at both the Federal and state levelsto regulate healthcare delivery in general and medical imagingservices in particular.  CMS, the U.S. agency that establishesMedicare reimbursement policies, regularly re-evaluatesreimbursement rates for all health care provider services,including medical imaging services, and has reduced such rates inthe past.  CMS' latest published figures applicable toreimbursement for medical imaging services reflect reductions inrates of up to 4 percent for 2002.  We are not able to predictthe long-term impact of changes in the reimbursement system uponthe medical imaging business.

The medical imagingservices business also is subject to state insurance laws governingthe presentation and payment of insurance claims for medicalimaging services to patients with health insurance, and to Federaland state regulations relating to testing standards, personnelaccreditation and compliance with government reimbursementprograms.

Our centers are alsosubject to the Federal fraud and abuse laws described above for theradiopharmacy business.  Among the types of relationshipscovered by the Safe Harbors developed by the OIG are personalservice arrangements, such as the arrangements between radiologistsand our medical imaging centers.  In addition to the SafeHarbors, the OIG has issued Advisory Opinions, indicating whetherthe OIG would be likely to view a particular arrangement asviolative of the Federal Anti-Kickback Statute.  With respectto payments for marketing services, the OIG has indicated that ifan arrangement contains certain characteristics, the arrangementmay be more likely to be investigated by the OIG or found toviolate the Federal Anti-Kickback Statute.  Among thecharacteristics listed by the OIG are compensation arrangementsbased on a percentage of sales and the use of sales agents who arehealth professionals to exert undue influence on purchasers orpatients.  Our arrangements with physicians and other personsor entities who may be in a position to refer patients may notfully meet the stringent criteria specified in the SafeHarbors.  Failure to qualify for Safe Harbor protection doesnot mean that an arrangement is illegal.  Rather, thearrangement must be analyzed under the Anti-Kickback Statute todetermine whether there is an intent to pay or receive remunerationin return for referrals.  Even though we continuously striveto comply with the requirements of the Anti-Kickback Statute,liability under the Anti-Kickback Statute may still arise becauseof the intentions of the parties with whom we do business. Conduct and business arrangements that do not fully satisfy one ofthe Safe Harbors may result in increased scrutiny by governmentenforcement authorities such as the OIG.  Our centers are alsosubject to the Federal False Claims Act described above for theradiopharmacy business. 

The“Stark II” statute, enacted under the OmnibusBudget Reconciliation Act of 1993, prohibits a physician frommaking a referral to an entity for the furnishing of designatedhealth services (including diagnostic imaging services) for whichpayment may be made under a Federal health care program, if thephysician has a financial relationship with that entity.  Theterm financial relationship includes both ownership interests andcompensation arrangements.  Any person who presents or causesto be presented a claim to the Medicare or Medicaid programspursuant to a prohibited referral is also subject to significantpenalties and possible exclusion from participation in Federalhealth care programs. In addition, a number of states (includingCalifornia and Florida) have enacted their own versions ofself-referral laws which may require physicians to disclose anyfinancial interest they may have with a healthcare provider totheir patients when referring patients to that provider.  Anysanctions imposed on us under Stark or companion state laws couldadversely affect our financial results and our business.  Ourmedical imaging services business also may be subject to state lawsthat prohibit the practice of medicine by non-physicians or thesplitting of fees between physicians andnon-physicians.  

The Federal HealthInsurance Portability and Accountability Act of 1996 provides thatit is a felony to knowingly and willfully execute any scheme todefraud any healthcare benefit program.  This Act also imposesnew requirements relating to the privacy of medicalinformation.  The government published regulations toimplement these requirements in December 2000, with which healthcare providers are expected to comply by April 2003.  Aviolation of these provisions may result in criminal or civilpenalties, which would adversely affect our financial performanceor our ability to operate our business. 

We are also subject tolicensing and regulation under Federal, state and local lawsrelating to the handling and disposal of medical specimens,infectious and hazardous waste and radioactive materials as well asto the safety and health of laboratory employees.  Thesanctions for failure to comply with these regulations may includedenial of the right to conduct business, significant fines andcriminal penalties.

**Employees**

As of December 31, 2001,we employed approximately 4,600 people, of whom approximately 3,000were full-time employees.  Of our full-time employees,approximately 1,580 are employed in our U.S. radiopharmacybusiness, 800 are employed in our U.S. medical imaging business,400 are employed in our international operations, and the rest arein our corporate headquarters.  Four hundred twenty of ourU.S. radiopharmacy business employees are licensed nuclearpharmacists.  With limited exceptions in foreign countries,none of our employees is covered by a collective bargainingagreement.  We consider our employee relations to begood.

**11**

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**EnvironmentalMatters**

In operating ourfacilities, historically we have not encountered any majordifficulties in effecting compliance with applicable pollutioncontrol laws.  No material capital expenditures forenvironmental control facilities are expected.  While wecannot predict the effect which any future legislation,regulations, or interpretations may have upon our operations, we donot anticipate any changes that would have a material adverseimpact on our operations.

**RiskFactors**

Except for the historicalinformation and discussions, statements contained in this Form10-K/A-1 may constitute "forward looking statements" within themeaning of the Private Securities Litigation Reform Act of1995.  These statements involve a number of risks,uncertainties and other factors that could cause actual results todiffer materially from those expressed in or implied by suchstatements due to a number of factors, including the risk factorsbelow.

***Sales ofCardiolite®  account for a significant portion of our netsales and net income, and a reduction in our Cardiolite sales as aresult of the expiration of our current exclusive distributionrights in December 2003 and the expiration of the key patents forCardiolite, could have a material adverse impact on our businessand operating results.***

Sales of Cardioliteaccounted for 53.4% of our net sales in 2001 from continuingoperations. Under the terms of our supply and distributionagreement with Bristol-Myers, we have the exclusive right todistribute Cardiolite within specified geographic areas surroundingmost of our U.S. radiopharmacies.  These rights expireDecember 31, 2003, and we cannot assure you that they will berenewed or extended on similar terms, or at all. 

Bristol-Myers'  keyU.S. patents for Cardiolite expire between 2005 and 2008. Once the patents expire, other manufacturers may begin producingand distributing generic versions of Cardiolite which could competewith Cardiolite.  It is also possible that new cardiologyimaging agents may be developed in the future that are superior toCardiolite.  Our Cardiolite sales could decline significantlyin the future if our current distribution rights are not renewed orextended after the end of 2003, and thereafter when genericversions of Cardiolite become available after Bristol-Myers’key U.S. patents expire or the introduction of new cardiologyimaging agents.  If we are unable to respond appropriately tothe occurrence of any of these events, they could have a materialadverse impact on our business, operating results and financialcondition.

***We depend onBristol-Myers for our principal products and raw materials, and anyloss or interruption in the supply of Bristol-Myers' products orraw materials would have a material adverse impact on our businessand operating results.***

Our radiopharmaciesdispense more than 50 different radiopharmaceutical products withmore than 100 medical indications, which we obtain primarily fromsix suppliers.  Our principal supplier in the U.S. isBristol-Myers, from which we obtain Cardiolite, as well asThallium, a generic cardiology imaging agent that accounted for8.2% of our net sales in 2001 from continuing operations.  Inthe aggregate, products supplied by Bristol-Myers, includingCardiolite and Thallium, accounted for 69.3% of our net sales in2001 from continuing operations.  Our business, results ofoperations and financial condition would be materially adverselyaffected if our supply of products from Bristol-Myers isinterrupted for any reason.  In addition, our business,results of operations and financial condition would be materiallyadversely affected if we encounter delays in obtaining alternativeproducts from other suppliers, or if alternate products availableto us are inferior in quality to Bristol-Myers’ products andare not readily accepted by our customers.

Technetium is aradioactive isotope used to compound radiopharmaceuticals, whichare then dispensed to our customers, generally in unit-doseform.  Sales of technetium-based products (such as Cardiolite)accounted for 65.9% of our net sales in 2001 from continuingoperations.  We obtain most of our U.S. supply of technetiumfrom technetium generators supplied by Bristol-Myers.  We donot have a long-term contract with Bristol-Myers for the supply oftechnetium generators.  Although we believe technetiumgenerators are available in sufficient quantity from othersuppliers, we have periodically experienced minor disruptions inour supply.  Any significant disruption in our supply oftechnetium generators could have a material adverse effect on ourbusiness, results of operations and financial condition, unless anduntil we obtain alternative sources of supply.

***We depend on a fewlarge customers for sales of our radiopharmaceutical services andproducts, and the loss of one or more of these customers could havea material adverse impact on our operatingresults.***

**12**

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Corporate accountcustomers representing multiple-facility integrated healthcarenetworks, or IHNs, or local independent hospitals, and thatpurchase exclusively through a GPO, accounted for 38% of our netsales in 2001 from continuing operations.  Sales to AmeriNetInc.and Health Trust Purchasing Group (formerly Columbia/HCA)constituted 21% of our net sales in 2001 from continuingoperations.  Although most of these contracts are multi-yearcontracts, certain contracts permit the customers to cancel theircontracts on 30 to 90 days notice.  In addition, all of ourcontracts may be cancelled for a variety of reasons, including ourinability to provide the level of quality of service and productsrequired by the contract.  Although the loss of any particularcorporate account does not necessarily result in our losing each ofthe individual hospitals or clinics within a purchasing group ascustomers because they may continue to purchase from us outside ofthe corporate account contracts, often we do lose customersfollowing the termination of corporate contracts.  The trendtoward further consolidation of hospital and clinic groups and theuse of large purchasing groups may put further pressure on ourfuture profit margins, and the loss of any significant corporateaccount customers or a material part of such customers’business (whether as a result of a cancellation of our contract, anacquisition of our customer by another company that is served byanother provider, a material deterioration in the financialcondition of our customer or otherwise) may have an adverseshort-term or long-term impact on our radiopharmacy net sales,which could have a material adverse impact on our business,operating results or financial condition.

***We depend onreimbursements from third-party payors, and therefore changes inthe mix of payors or in their reimbursement policies could have amaterial adverse impact on our business and operatingresults.***

We depend in significantpart on reimbursements from governmental and non-governmentalthird-party payors.  This reimbursement indirectly affects ourradiopharmacy services net sales (and directly affects our netsales from medical imaging, a discontinued operation) because wereceive direct payments from third-party payors for services weprovide, and also, because it affects the amounts our customers arereimbursed for payments they make to us for ourradiopharmaceuticals and the amount of these reimbursements impactsthe amount our customers are willing to pay us.  Third-partypayors are implementing a variety of approaches to reduce costs,which could have a material adverse effect on us.  Theincreasing prevalence of managed care, centralized purchasingdecisions by hospitals, consolidation among and integration ofhealthcare providers and competition for patients is continuing toaffect pricing, purchasing, usage patterns and particular drugtreatment decisions based on cost considerations.  The levelof reimbursement we are able to obtain for our servicesincreasingly will depend on our ability to properly itemize andbill for these items.  Cost-reduction measures implemented bythird-party payors, decisions by third parties limiting the use ofdiagnostic tests or drug treatments we provide, the inability ofany third-party payors to satisfy their payment obligations to us,or a shift in the mix of our private payors to managed careorganizations which tends to reduce the amount reimbursed for testsand treatments, could have a material adverse impact on ourbusiness, operating results or financialcondition. 

The Centers for Medicareand Medicaid Services, or CMS, the Federal agency that establishesMedicare reimbursement policies, has considered making significantreductions in reimbursement rates for medical imaging services andradiopharmaceuticals in the past and has indicated that it iscontinuing to evaluate these rates.  We believe newinitiatives by CMS to lower these reimbursement rates can beexpected in the future.  For example, on August 1, 2000,CMS began setting reimbursement rates for radiopharmaceuticalsbased on the prices submitted by manufacturers, which tend to belower than the previous prices based on the pass-throughrate.  Further, CMS recently approved reductions inreimbursement rates for PET studies for hospital outpatientseffective April 1, 2002.  We are not able to predict theeffects of this change in Medicare reimbursement policies, butthese developments could adversely affect our radiopharmacy netsales, which could have a material adverse impact on our business,operating results or financial condition. 

***We depend uponhighly trained personnel in the operation of ourradiopharmaceutical business, and our inability to recruit and/orretain a sufficient number of these personnel could restrict ourability to meet the needs of our customers and could have amaterial adverse impact on our business, operating results andfinancial condition.***

Each of ourradiopharmacies employs one or more nuclear pharmacists who requirehighly specialized training and must be specially licensed. There is a shortage nationwide of nuclear pharmacists, and we maynot be able to attract or retain sufficient qualified pharmacistsin some geographic areas we serve.  Our loss of ourpharmacists, or our inability to attract a significant number ofnew pharmacists could have a material adverse impact on ourbusiness, operating results or financial condition.

***Changes inradiopharmaceutical and medical imaging technologies or theintroduction of new services and products in the markets we servecould have an adverse impact on our radiopharmacybusiness.***

Radiopharmaceutical andmedical imaging technologies are subject to constant and oftenrapid changes.  New and more effective radiopharmaceuticalservices and products may be developed for the diagnosis ortreatment of diseases, particularly in the cardiovascular oroncology areas, and we may be unable to obtain marketing rights tothese products or have to pay substantial amounts to acquirethem.  In addition, new diagnostic or treatment modalitiesthat are not based on nuclear medicine may be developed fordiseases currently addressed by our products.  Thesedevelopments could adversely affect our radiopharmacy net sales,which could have a material adverse impact on our business,operating results or financial condition.

**13**

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***Our business and ourindustry are highly regulated, and if government laws orregulations are enforced in a manner adverse to us we may besubject to significant penalties and sanctions.***

The healthcare servicesindustry is extensively regulated by Federal, state and localgovernmental agencies.  We are subject to regulation by theFood and Drug Administration, the Nuclear Regulatory Commission,the Department of Transportation, state nuclear regulatoryagencies, state boards of pharmacy, state health departments andvarious other Federal and state agencies, and similar governmentalagencies in other countries in which we operate.  If we do notcomply with the laws and regulations applicable to us we may besubject to a variety of penalties and sanctions, includingsubstantial civil and criminal penalties, damages and fines and thecurtailment of our operations.  Any penalties, damages, finesor curtailment of our operations, individually or in the aggregate,could have a material adverse impact on our business, operatingresults or financial condition.  The risk of our being foundin violation of applicable laws and regulations is increased by thefact that many of them have not been fully interpreted by theregulatory authorities or the courts, and their provisions are opento a variety of interpretations.  Any action against us forviolation of these laws or regulations, even if ultimately we aresuccessful in defending against it, could cause us to incursignificant legal expenses and divert our management’sattention from the operation of our businesses. 

***We are subject toeconomic, political and other risks and uncertainties inherent indoing business internationally.***

Our internationaloperations accounted for 5.6% of our net sales in 2001 fromcontinuing operations.  Our international operations aresubject to various risks and uncertainties of doing business inforeign markets, and these risks and uncertainties may beheightened as a result of our strategy of targeting emerging marketcountries.  The risks and uncertainties relating to ourinternational operations include:
|                   | *****              | fluctuations in currencyrates, which may affect our reported earnings;                                                                         |
|--------------------------------------------------------------------------------------------------------|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|
|                   |     |                                                                                                                                                |
|                   | *****              | compliance with foreignregulatory requirements which often are subject to frequent changeand not as well defined and developed as in the U.S.; |
|                   |     |                                                                                                                                                |
|                   | *****              | operations through jointventures with local partners over whom we have limitedcontrol;                                                         |
|                   |     |                                                                                                                                                |
|                   | *****              | political and economicinstability in the countries where we operate; and                                                                       |
|                   |     |                                                                                                                                                |
|                   | *****              | restrictions onremittances of cash from our international operations.                                                                          |

***If we become subjectto product liability and malpractice claims that are not adequatelycovered by our insurance, we may have to pay significant damagesand other expenses.***

Our businesses are subjectto the risks of various claims from customers and patients,including claims arising from the distribution and manufacture ofradiopharmaceuticals and medical devices and malpractice claimsarising from the provision of medical services.  We may not beable to maintain product liability or malpractice insurance in thefuture on acceptable terms or with adequate coverage againstpotential liabilities.  A successful claim not covered by ourinsurance, or in excess of our insurance coverage, could have amaterial adverse impact on our business, operating results orfinancial condition.

***Our business dependsin part upon our ability to protect our intellectual property andavoid violating the intellectual property ofothers.***

We rely to a significantextent on various intellectual property rights, including patents,tradenames, trademarks and trade secrets.  We own U.S. patentscovering our proprietary radiopharmaceuticals delivery system,including our SECURE® Safety Insert System and our family oftungsten radiopharmaceutical delivery systems more commonly knownas “Pigs.”  We also license our proprietarySYNtrac and Unit Dose Manager software systems to many of ourcustomers for the management of their nuclear medicine departmentsand to facilitate electronic communication with ourradiopharmacies.  In addition, we rely on certain other tradesecrets and other proprietary know-how that are either notpatentable or that we choose not to patent.  If any of ourcompetitors successfully challenges or circumvents our patents ortrade secrets, our business, operating results or financialcondition could be materially and adversely impacted.  If weviolate the intellectual property rights of others, we could besubjected to costly litigation and be required to pay significantdamages to these parties and to discontinue or substantially modifyour business activities that are in violation of these rights, anyof which could also have a material adverse impact on our business,operating results or financial condition.

**14**

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***Our stock price maybe volatile***.

During 2001, the closingprice of our Common Stock ranged from $26.03 to $42.29 pershare.  The market price can be affected by many factors,including reports dealing with our suppliers and customers, ouroperating results, announcements by our competitors, changes ingovernment regulations that affect our businesses, general marketconditions, volume of shares traded on any given day, andstatements by analysts.  We also have 7,646,654 stock optionshares outstanding as of March 8, 2002, of which 3,027,606 arevested.  Of the unvested option shares, 2,691,957 optionshares granted under our Universal Performance Equity ParticipationPlan with exercise prices ranging from $8.34 to $36.38 could vestat any time on or after June 30, 2002 if certain stock pricetargets are met.  If a significant number of employeesexercise and sell their vested stock options at any one time, thiscould have an adverse impact on our stock price.

***Unsuccessful systemimplementation could have an adverse financial impact on ourCompany.***

We have made significantinvestments in information systems technology to help usefficiently conduct our business on a day-to-day basis, and thefailure of these systems could have a material adverse impact onour business and our financial condition.

We are highly automatedand dependent upon the use of sophisticated hardware and softwareto conduct day-to-day business transactions.  While we believethat we have adequate technical support in-house as well as fromexternal resources and that we have sufficient backup and recoveryplans, there can be no assurance that prolonged interruptions inthe functioning of our information systems technology would nothave an adverse impact on our ability to conduct day-to-daybusiness.  In addition, we have invested substantial resourcesin the development and implementation of proprietary software forour pharmacy services business. This system is complex, and despiteextensive testing and quality control, will require successfulintegration with third-party software, as well as continuingupdates to correct errors or defects, to keep current with advancesin technology, or to make enhancements requested by users. There can be no assurance that this system will be successfullyintegrated and produce the expected benefits during the nextseveral years.  If the integrations on this system are notsuccessful or if the system cannot be properly maintained orupgraded during the next several years, we will need to re-evaluateour investments in this system.  This re-evaluation could meanadditional financial investment to correct deficiencies or upgradethe system, or result in a decision to abandon it, any of whichcould result in an adverse financial impact, especially if thesystem needs to be abandoned prior to the system being fullydepreciated.

**Item2.     PROPERTIES.**

Our corporate headquartersis located in Woodland Hills, California.  We leaseapproximately 61,000 square feet at that location.  Ourcurrent lease is for a term of ten years, which commenced onMarch 1, 1997, with one five-year renewal option.  InOctober 2000, we entered into an agreement to lease an additional36,000 square feet of office space in a building adjacent to ourcorporate headquarters.  The lease is for a term of six years,with one five-year renewal option. We also lease approximately24,530 square feet of administrative office space in Duluth,Georgia.  The lease, which commenced in June 2001, is for aterm of 10 years.  In connection with our acquisition ofInteCardia, Inc., we assumed an agreement to lease 29,943 squarefeet of space that will house a cardiac diagnostic facility thatwill offer outpatient cardiac catheterization and nuclearcardiology services.  The lease begins on November 1, 2002 andhas a term of 15 years.  We lease all of our 130 radiopharmacysites in the U.S.  The lease terms range from less than oneyear to approximately ten years.

Outside of the U.S., weoperate our radiopharmacies, medical imaging centers, and otherbusinesses from 13 owned sites and 20 leased sites.

We believe our facilitiesare sufficient for our current needs and that additional facilitieswill be available as needed to accommodate our futuregrowth.

**Item3.     LEGAL PROCEEDINGS.**

We are party to a numberof lawsuits and legal proceedings involving claims arising in thenormal course of our business. We believe that these claims, in theaggregate, will not have a material adverse effect on our business,financial condition or results of operations.

**15**

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**PARTII**

**Item5.     MARKET FOR REGISTRANT’SCOMMON EQUITY AND RELATED STOCKHOLDER MATTERS.**

The Common Stock of theCompany is traded on the Nasdaq National Market under the symbol“SCOR.”  The following table sets forth the rangeof high and low sales prices on the National Market of the CommonStock for the periods indicated, as reported by Nasdaq.  Suchquotations represent inter-dealer prices without retail market,markdown or commission and may not necessarily represent actualtransactions.
| **                          ** | **       ** | **           ** | **HIGH($)**                          | **          ** | **LOW($)**                           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------------------------------|--------------------------------------|------------------------------------------------------------------|--------------------------------------|
| **                  2000**                                             | **       ** |                                |        |                                    |             |
|                                | First Quarter                                  |                                | 16.50                                |                                    | 11.02                                |
|                                | Second Quarter                                 |                                | 36.00                                |                                    | 13.00                                |
|                                | Third Quarter                                  |                                | 43.94                                |                                    | 32.75                                |
|                                | Fourth Quarter                                 |                                | 39.06                                |                                    | 23.75                                |
| **                  2001**                                             | **     **             |                                |             |                                    |        |
|                                | First Quarter                                  |                                | 38.81                                |                                    | 27.25                                |
|                                | Second Quarter                                 |                                | 42.29                                |                                    | 26.64                                |
|                                | Third Quarter                                  |                                | 38.74                                |                                    | 26.63                                |
|                                | Fourth Quarter                                 |                                | 33.31                                |                                    | 26.03                                |

As of December 31, 2001,there were 689 holders of record of the Common Stock.  OnDecember 31, 2001, the last sale price reported on the NasdaqNational Market for the Common Stock was $28.64 per share. The Company has never paid cash dividends on its Common Stock andhas no present intention to do so.

On July 11, 2000, theCompany’s Board of Directors declared a two-for-one stocksplit of the Company’s Common Stock in the form of a stockdividend.  The stock dividend was distributed on August 9,2000 to stockholders of record on July 26, 2000.

All references to pershare amounts have been restated to reflect this stocksplit.

**Item6.     SELECTED FINANCIALDATA.**

The following balancesheet data and income statement data for the five years endedDecember 31, 2001 has been derived from the Company’s auditedconsolidated financial statements.  Consolidated balancesheets at December 31, 2001 and 2000 and the related consolidatedstatements of income and of cash flows for each of the three yearsin the period ended December 31, 2001 and notes thereto appearelsewhere herein.  The data should be read in conjunction withthe annual consolidated financial statements, related notes andother financial information appearing elsewhere herein.

The following data hasbeen restated to allow for comparability due to the announcement onJune 14, 2002 of the discontinuation of certain operations,including our U.S. medical imaging business operated byComprehensive Medical Imaging, Inc. (previously a separate segmentfor reporting purposes), certain overseas locations, and ourbrachytherapy seeds manufacturing operations.

**16**

----

**SELECTED FINANCIALDATA**
| **(IN THOUSANDS,EXCEPT PER SHARE DATA)**                           | **    ** | **2001**                                  | **   ** | **2000**                                  | **   ** | **1999**                                  | **   ** | **1998**                                  | **   ** | **1997**                                           |
|--------------------------------------------------------------------|------------------------------|-------------------------------------------|------------------------|-------------------------------------------|------------------------|-------------------------------------------|------------------------|-------------------------------------------|------------------------|----------------------------------------------------|
|                                                                    |
|                                                                    |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Net sales                                                          |                              | $598,136                                  |                        | $517,552                                  |                        | $457,156                                  |                        | $410,469                                  |                        | $379,857                                           |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Grossprofit                                                        |                              | 180,391                                   |                        | 149,682                                   |                        | 124,068                                   |                        | 103,794                                   |                        | 90,029                                             |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Income(loss):                                                      |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Continuingoperations                 |                              | 34,512                                    |                        | 28,040                                    |                        | 18,172                                    |                        | 13,894                                    |                        | 10,356                                             |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Discontinued operations, netof taxes |                              | 3,357                                     |                        | 1,498                                     |                        | 1,049                                     |                        | 37                                        |                        | 739                                                |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Net income                           |                              | $  37,869                       |                        | $  29,538                       |                        | $  19,221                       |                        | $  13,931                       |                        | $  11,095                                |
|                                                                    |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Earnings (loss) perbasic share:                                    |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Continuingoperations                 |                              | $      1.40 |                        | $      1.17 |                        | $      0.78 |                        | $      0.65 |                        | $      0.51          |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Discontinued operations, netof taxes |                              | 0.14                                      |                        | 0.06                                      |                        | 0.04                                      |                        | 0.00                                      |                        | 0.04                                               |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Net income                           |                              | $      1.54 |                        | $      1.23 |                        | $      0.82 |                        | $      0.65 |                        | $      0.55          |
|                                                                    |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Earnings (loss) perdiluted share:                                  |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Continuingoperations                 |                              | $      1.28 |                        | $      1.05 |                        | $      0.71 |                        | $      0.61 |                        | $      0.50          |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Discontinued operations, netof taxes |                              | 0.12                                      |                        | 0.06                                      |                        | 0.04                                      |                        | 0.00                                      |                        | 0.04                                               |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Net income                           |                              | $      1.40 |                        | $      1.11 |                        | $      0.75 |                        | $      0.61 |                        | $      0.54          |
|                                                                    |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Cash, cash equivalentsand marketable securities                    |                              | $  28,855                       |                        | $  29,037                       |                        | $  18,680                       |                        | $  18,192                       |                        | $  29,301                                |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Working capital– continuing operations                       |                              | $  72,919                       |                        | $  62,137                       |                        | $  39,767                       |                        | $  50,190                       |                        | $  34,519                                |
| Total assets –continuing operations                          |                              | $304,687                                  |                        | $260,060                                  |                        | $180,822                                  |                        | $161,700                                  |                        | $163,653                                           |
| Total assets – discontinued operations                  |                              | $283,154                                  |                        | $210,649                                  |                        | $131,820                                  |                        | $  94,867                       |                        | $       910          |
| Long-term debt –continuing operations                        |                              | $  35,118                       |                        | $  18,399                       |                        | $       —  |                        | $    6,490            |                        | $  17,332                                |
| Long-term debt– discontinued operations                 |                              | $175,564                                  |                        | $119,487                                  |                        | $  76,326                       |                        | $  63,832                       |                        | $       — |
| Stockholders’equity                                          |                              | $234,828                                  |                        | $185,880                                  |                        | $140,337                                  |                        | $111,373                                  |                        | $  87,367                                |
| Weighted averageshares outstanding:                                |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Basic                                |                              | 24,570                                    |                        | 23,948                                    |                        | 23,340                                    |                        | 21,452                                    |                        | 19,996                                             |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
|      Diluted                              |                              | 27,029                                    |                        | 26,657                                    |                        | 25,478                                    |                        | 22,678                                    |                        | 20,564                                             |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Current ratio– continuing operations                    |                              | 1.73                                      |                        | 1.54                                      |                        | 1.52                                      |                        | 2.01                                      |                        | 1.60                                               |
|                                                                    |
|                                                          |                              |                                           |                        |                                           |                        |                                           |                        |                                           |                        |                                                    |
| Number of domesticradiopharmacies                                  |                              | 130                                       |                        | 125                                       |                        | 123                                       |                        | 120                                       |                        | 119                                                |
|                                                                    |

**17**

----

**Item7.     MANAGEMENT’S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS.**

**FORWARD LOOKINGSTATEMENTS**

Except for the historicalinformation and discussions contained herein, statements containedin this Annual Report on Form 10-K/A-1 may constitute "forwardlooking statements" within the meaning of the Private SecuritiesLitigation Reform Act of 1995.  These statements involve anumber of risks, uncertainties and other factors that could causeactual results to differ materially, including: changes in theregulation of the healthcare industry at either or both of theFederal and state levels; changes or delays in the Company'sreimbursement for services by governmental or private payers; theCompany's failure to continue to develop and market new productsand services and to keep pace with technological change;competitive pressures; failure to obtain or protect intellectualproperty rights; quarterly fluctuations in revenues and volatilityof the Company's stock price; the Company's ability to attract andretain key personnel; currency risks; dependence on certainsuppliers; the Company's ability to successfully manageacquisitions and alliances; legal, political and economic changes;and other risks, uncertainties and factors discussed in the "RiskFactors" section above and elsewhere herein, in the Company's otherfilings with the SEC or in materials incorporated byreference.  Given these uncertainties, undue reliance shouldnot be placed on such forward looking statements.

**2001 VS.  2000**

Thefollowing data has been restated to allow for comparability due tothe announcement on June 14, 2002 of the discontinuation of certainoperations, including our U.S. medical imaging business-CMI(previously a separate segment for reporting purposes), certainoverseas locations and our brachytherapy seeds manufacturingoperations included in our Pharmacy Services Business.

After thesechanges, management has identified two business segments forseparate reporting:  our U.S. Pharmacy Services business andour International business.  Our U.S. Pharmacy Servicesbusiness primarily compounds, dispenses and distributesradiopharmeceuticals and distributes complex pharmaceuticals in theUnited States. This segment depends heavily on one product,Cardiolite, for a high percentage of its sales. We are currently indiscussions with Bristol-Myers Squibb, our supplier of Cardiolite,to extend our supply agreement beyond 2003 upon mutually agreeableterms. To lessen our dependence on Cardiolite, we have undertakenseveral strategic initiatives, such as the production anddistribution of FDG and the distribution of new complexpharmaceuticals.  Also, this segment made several acquisitionsin 2001 and anticipates further acquisitions in 2002.  From afinancial reporting standpoint, this segment has had to integratethese new entities into its organization.  Our Internationalbusiness provides both pharmacy and imaging services outside of theUnited States. This segment has also made several acquisitions in2001, but is not expected to make significant acquisitions in2002.  Financial reporting and integration of acquisitions arechallenging given the geographic locations and the fact thatreliance is placed heavily on local management.

**SUMMARY OF CRITICALACCOUNTING POLICIES AND ESTIMATES**

**Our critical accountingestimates and critical accounting policies are asfollows:**

**RevenueRecognition.**  We recognize ourrevenue primarily from two sources: (i) product revenue, whichincludes sales from our radiopharmacies, and (ii) service revenue,primarily from our international imaging businesses and ourcardiology management services.  Management makes fewestimates or judgments in the recording of revenues and as such fewif any changes are expected in the recording of revenues. Revenues are booked based upon delivery of product to ourcustomers.  Since most of our products are compounded withradioactive materials, most have a very short useful life ofapproximately six hours.  Due to this short life and the factthat most items are ordered for specific patients based on adoctor’s prescription, we receive very few returns ofproduct.  These returns are generally handled in the samemonth so future revenues are not impacted and no significantallowances for returns are necessary.  Service revenues arebooked at the time of service.  Allowances are made forcontracts and bad debts in the same month as the service revenue isbooked.  Service revenues constitute less than 3% of ouroverall net revenues.

**Estimating Valuation Allowances for DoubtfulAccounts***.*Thepreparation of financial statements requires our management to makeestimates and assumptions on the collectibility of our accountsreceivable. Management specifically analyzes historical bad debts,customer concentrations, customer credit-worthiness, currenteconomic trends, aging of accounts and changes in payment termswhen evaluating the adequacy of the allowance for doubtfulaccounts. Any changes in these estimates or assumptions could causematerial differences in recorded allowances.

**18**

----

**Valuation of Long-LivedAssets and Goodwill*.***  Weassess the impairment of identifiable intangibles, long-livedassets and related goodwill and enterprise level goodwill wheneverevents or changes in circumstances indicate that the carrying valuemay not be recoverable. Factors we consider important which couldtrigger an impairment review include the following:
|            | •     | significantunderperformance relative to expected historical or projectedfuture operating results;           |
|--------------------------------------------------------------|--------------------------------|-------------------------------------------------------------------------------------------------------------|
|                                                         |                                |                                                                                                             |
|                                                         | •     | significantchanges in the manner of our use of the acquired assets or thestrategy for our overall business; |
|                                                         |                                |                                                                                                             |
|                                                         | •     | significantnegative industry or economic trends;                                                            |
|                                                         |                                |                                                                                                             |
|                                                         | •     | our marketcapitalization relative to net book value.                                                        |

When wedetermine that the carrying value of intangibles, long-lived assetsand related goodwill and enterprise level goodwill may not berecoverable based upon the existence of one or more of the aboveindicators of impairment, we measure any impairment based on aprojected undiscounted cash flow method using a discount ratedetermined by our management to be commensurate with the riskinherent in our current business model. Net intangible assets,long-lived assets, and goodwill amounted to $130.7 million asof December 31, 2001.

ThroughDecember 31, 2001, the cost in excess of net assets of acquiredbusinesses is being amortized on a straight-line basis over periodsof 15 to 40 years.

In the firstquarter of 2002, Statement of Financial Accounting Standards(“SFAS”) No. 142, “Goodwill and Other IntangibleAssets” was effective and as a result, we ceased amortizingapproximately $30.5 million of goodwill. We had recordedapproximately $1.2 million, $1.0 million, and $1.9 million ofgoodwill amortization during 2001, 2000 and 1999,respectively.  We would have recorded approximately$0.9 million of goodwill amortization during 2002. Under theprovisions of the Statement, we did not record amortization relatedto any post-June 30, 2001 acquisitions. Such amortization wouldhave amounted to $0.2 million. In lieu of amortization, we arerequired to perform an initial impairment review of our recordedintangibles and goodwill in 2002 and an annual impairment reviewthereafter. We completed our initial review during the first andsecond quarter of 2002, and there was no adjustment to intangibleassets recorded balances or estimated useful lives, and noadjustments to goodwill. 

**NETSALES**

Net sales increased 15.6%,or $80.6 million, to $598.1 million. U.S. pharmacy services revenueincrease was primarily from organic growth and growth in ouroverseas business was primarily from acquisitions. Cardiolite® sales represented 53.4% or approximately $320million of our total sales from continuing operationsin2001.
|                                |                                                        | **        Revenues** |
|--------------------------------|--------------------------------------------------------|--------------------------------------------------------------|
|                                |           | **2001**                                                     | **     ** | **          2000** |
|                                |
| U.S.Pharmacy Services Business |                                                        | $564,697                                                     |  | $489,247 |
| International Operations       |                                                        | 33,439                                                       |  | 28,305 |
|                                |
| Total                          |                                                        | $598,136                                                     |  | $517,552 |
|                                |

***U.S.Pharmacy Business***

Net salesincreased 15.4%, or $75.5 million, to $564.7 million drivenprimarily by increased sales of cardiology imaging agents. This business realized both volume and price increases during theyear in its cardiology imaging agents.  The price increasesranged between 3.0% and 3.5% for 2000 and 2001.  Sales ofcardiology imaging agents increased 11.5%, or $40.1 million,compared to the prior year and represented 70.6% of our U.S.radiopharmacy business net sales in 2001. Sales of oncologyproducts which includes FDG increased by 24.2% or $12.7 million ascompared to the prior year.  Of the remaining sales increase,acquisitions made during 2001 accounted for $15.5 million of theincrease.  For 2002, we anticipate sales growth to continue inthe 10-12% range for our cardiology products.  We anticipatehigher sales growth in oncology, primarily as the result of ourcontinued expansion of our FDG business that we started in mid2000.  We are growing our FDG business by adding cyclotronsand signing new FDG distribution agreements.  Finally, weexpect to realize sales growth in 2002 due to the delivery ofcomplex pharmaceuticals, such as Xigris and Zevalin.

**19**

----

***International Operations***

Net salesincreased 18.1%, or $5.1 million, to $33.4 million due to start-upbusinesses and acquisitions.  Net sales at our existingcenters or facilities were flat during the year primarily as aresult of a slowdown in healthcare spending in Taiwan. Radiopharmacy services continue to represent the greatestpercentage of our international net sales at 45.2%.  Wecontinued our expansion into the radiology product and serviceareas, which include the operation of nuclear medicine departmentsand equipment, as well as the ownership and operation offreestanding outpatient imaging centers.  Net sales ofradiology products and services represented 17.4% of our 2001international net sales. Service and distribution businessesrepresented 26.5% of our international sales in 2001, primarily asa result of an acquisition made in late 2001. We anticipate thatour Overseas segment will have improved sales in 2002 due toimproved economic conditions and expanded healthcare spending inTaiwan.  Taiwan accounts for 32.7% of this segment’sbusiness.  On an overall segment basis, we anticipate thatsales growth will be 15%-20% for 2002 due to the improvements inTaiwan and contributions from start-ups and acquisitions thatcontributed sales for a partial year in 2001 but will becontributing sales for all twelve months in 2002.

**GROSSPROFIT**

Gross profit increased20.5%, or $30.7 million, to $180.4 million.   Our consolidatedgross profit margin as a percentage of sales improved to 30.2% in2001 as compared to 29.0% in 2000 driven by continued improvementin product mix, price increases, and operating efficiencies at ourradiopharmacies.  Additionally, our margin as a percentage ofsales improved in 2001 due to increased net sales from ourinternational operations, which has a higher gross profit marginthan our U.S. radiopharmacy business.
|                                |                                                        | **GrossProfit        ** |
|--------------------------------|--------------------------------------------------------|-----------------------------------------------------------------|
|                                |           | **2001**                                                        | **                2000** |
|                                |
| U.S.Pharmacy Services Business |                                                        | $167,330                                                        | $138,778 |
| International Operations       |                                                        | 13,061                                                          | 10,904 |
|                                |
| Total                          |                                                        | $180,391                                                        | $149,682 |
|                                |

***U.S.Pharmacy Business***

Gross profitincreased 20.6%, or $28.6 million, to $167.3 million. Gross profitmargin as a percentage of sales improved to 29.6% in 2001 ascompared to 28.4% in 2000. This increase was due primarily togrowth in sales of cardiology imaging agents resulting from highervolumes combined with price increases.  Our gross profitincreased as a result of continued leveraging of our existingradiopharmacy infrastructure which increased volumes withoutcomparable increases in material, labor and deliverycosts.   Going forward, we plan to leverage ourradiopharmacy distribution network and deliver complexpharmaceutical products. We expect the gross profit margin growththat we have experienced the last several years will slow becausecomplex pharmaceuticals traditionally have lower margins than ourtraditional nuclear imaging products.

***International Operations***

Gross profitincreased 19.8%, or $2.2 million, to $13.1 million.  Grossprofit increased primarily due to acquisitions and newbusinesses.  Our gross profit margin as a percentage of salesincreased in 2001 to 39.1% compared to 38.5% in 2000. Margin growthat our existing radiopharmacy sites and imaging centers was flat in2001 compared to the prior year. Our business was impacted by aslowdown in healthcare reimbursement in Taiwan, which is ourlargest sales volume location overseas. 

**OPERATING, SELLING ANDADMINISTRATIVE EXPENSES**

Operating,selling and administrative expenses increased 14.5% or $13.6million, to $107.2 million.  The ratio of these expenses tonet sales for the year ended December 31, 2001 was 17.9% comparedto 18.1% for the same period in 2000.

**20**

----

|                                |                                                        | **Operating, Selling and Administrative Expenses** |
|--------------------------------|--------------------------------------------------------|----------------------------------------------------|
|                                |           | **2001**                                           | **2000** |
|                                |
| U.S.Pharmacy Services Business |                                                        | $ 86,660                                      | $76,560 |
| International Operations       |                                                        | 9,580                                              | 7,721 |
| UnallocatedCorporate           |                                                        | 10,981                                             | 9,328 |
|                                |
| Total                          |                                                        | $107,221                                           | $93,609 |
|                                |

***U.S.Pharmacy Business***

Operating,selling and administrative costs increased 13.2%, or $10.1 million,to $86.7 million.  This increase was due primarily toincreased costs associated with acquired businesses, whichaccounted for $6.1 million of this increase. Start up costsassociated with opening six new cyclotrons, used in the productionof FDG, accounted for an additional $2.2 million.  As apercentage of sales, operating, selling and administrative expensesdecreased from 15.6% in 2000 to 15.3% in 2001. 

***InternationalOperations***

Operating,selling and administrative expenses increased 24.1%, or $1.9million, to $9.6 million. Of this amount, $1.5 million was thecosts incurred due to new businesses and starting new centersduring 2001.  The remaining $0.4 million of the increase wasattributable to the expansion of services and products offered atour existing facilities and the addition of new managementresources to support the expanded operations. As a percentage ofsales, these expenses increased from 27.3% in 2000 to 28.6% in2001. 

**DEPRECIATION ANDAMORTIZATION**

Depreciationand amortization increased 37.1%, or $4.6 million, to $16.9million. The increase was attributable to expansions in: ourinternational operations, with an increase of $1.9 million; ourpharmacy services business, primarily in new FDG productionfacilities, with an increase of $1.9 million; and our corporateoperations, with an increase of $0.8 million.
|                                |                                                        | **Depreciation and Amortization** |
|--------------------------------|--------------------------------------------------------|-----------------------------------|
|                                |           | **2001**                          | **                2000** |
|                                |
| U.S.Pharmacy Services Business |                                                        | $  7,323                | $  5,475 |
| International Operations       |                                                        | 3,856                             | 1,953 |
| UnallocatedCorporate           |                                                        | 5,733                             | 4,906 |
|                                |
| Total                          |                                                        | $16,912                           | $12,334 |
|                                |

****

**21**

----

**2000 VS.1999**

**NETSALES**

Net salesincreased 13.2%, or $60.4 million, to $517.6 million.  Netsales increased in each of the business segments due to high growthin the cardiology sector of our Pharmacy Services business andprimarily through acquisitions in our Internationalbusiness.
|                                |                                                        | **        Revenues** |
|--------------------------------|--------------------------------------------------------|--------------------------------------------------------------|
|                                |           | **2000**                                                     | **                1999** |
|                                |
| U.S.Pharmacy Services Business |                                                        | $489,247                                                     | $440,384 |
| International Operations       |                                                        | 28,305                                                       | 16,772 |
|                                |
| Total                          |                                                        | $517,552                                                     | $457,156 |
|                                |

***U.S.Pharmacy Business***

Net salesincreased 11.1%, or $48.9 million, to $489.2 million. This businessrealized both volume and price increases during the year from itscardiology imaging agents.  The price increases ranged between3.0% and 3.5% for 2000 and 1999.  Sales of cardiology imagingagents increased 12.0%, compared to the prior year and represented71.0% of our U.S. Pharmacy business net sales in 2000 compared to70.4% in 1999. 

***International Operations***

Net salesincreased 68.8%, or $11.5 million, to $28.3 million.  Thisincrease in net sales was due to a combination of acquisitions,start-ups, higher net sales at our existing facilities andexpansion of the services and products we offered.  Net salesat our existing facilities increased 31.0%.  Radiopharmacyservices continue to represent the greatest portion of ourinternational net sales, at 47.7%.  We continued our expansioninto the radiology product and service areas, which include theoperation of nuclear medicine departments and equipment, as well asthe ownership and operation of free-standing outpatient imagingcenters.  Net sales of radiology services and productsconstituted 17.1% of our 2000 international net sales.

**GROSSPROFIT**

Gross profitincreased 20.6%, or $25.6 million, to $149.7 million.  Ourconsolidated gross profit margin as a percentage of sales improvedto 29.0% in 2000 as compared to 27.1% in 1999.  This increasewas due primarily to continued improvement in product mix(primarily increased sales of Cardiolite®), and price increasesfor Cardiolite® and other cardiology imaging agents.  Wealso increased net sales from our international operation, whichhas a higher gross profit margins than our U.S. Pharmacybusiness.
|                                |                                                        | **      GrossProfit** |
|--------------------------------|--------------------------------------------------------|-----------------------------------------------------|
|                                |           | **2000**                                            | **                1999** |
|                                |
| U.S.Pharmacy Services Business |                                                        | $138,778                                            | $118,776 |
| International Operations       |                                                        | 10,904                                              | 5,292 |
|                                |
| Total                          |                                                        | $149,682                                            | $124,068 |
|                                |

****

****

**22**

----

***U.S. PharmacyBusiness***

Gross profitincreased 16.8%, or $20.0 million, to $138.8 million. Gross profitmargin as a percentage of sales improved to 28.4% in 2000 ascompared to 27.0% in 1999.  This increase was due primarily togrowth in sales of cardiology imaging agents combined with priceincreases.  We incurred start-up costs of $2.1 million in 2000associated with the start-up of two cyclotron facilities thatproduce PET radioisotopes.

***InternationalOperations***

Gross profitincreased 106.0%, or $5.6 million, to $10.9 million.  Thisincrease was due primarily to acquisitions and new businesses andproducts, which contributed $4.0 million of the increase; increasedsales at our existing radiopharmacies contributed $1.1 million ofthe increase.  The remaining $0.5 million of the increase wasattributable to increased net sales of medical imagingservices.  Our gross profit margin as a percentage of salesincreased in 2000 to 38.5% compared to 31.6% in 1999.  Thismargin increased at a higher rate than our net sales as a result ofmore efficient utilization of raw materials and labor.

**OPERATING, SELLING ANDADMINISTRATIVE EXPENSES**

Operating,selling and administrative expenses increased 17.2%, or $13.8million, to $93.6 million.  The ratio of these expenses to netsales for the year ended December 31, 2000 was 18.1% compared to17.5% over the same period in 1999.  The increase was dueprimarily to the start-up and acquisition of certain businesses in2000, the expansion of services and products we offer, increasedcorporate staffing to support our expansion and general corporateinfrastructure costs.
|                                | **Operating, Selling and   Administrative Expenses** |
|--------------------------------|----------------------------------------------------------------|
|                                | **         **     | **2000** | **                1999** |
|                                |
| U.S.Pharmacy Services Business |                                                                | $76,560 | $66,555 |
| International Operations       |                                                                |   7,721 | 5,048 |
| UnallocatedCorporate           |                                                                | 9,328 | 8,236 |
|                                |
| Total                          |                                                                |          $93,609 | $79,839 |
|                                |

***U.S. PharmacyBusiness***

Operating,selling and administrative costs increased 15.0%, or $10.0 million,to $76.6 million.  This increase was due primarily toincreased costs of our expanded sales force and increasedlabor-related expenses, including merit increases andbonuses.

***InternationalOperations***

Operating, selling andadministrative expenses increased 53.0% or $2.7 million, to $7.7million.  Of this amount, $1.6 million was attributable to thestart ups and acquisitions during 2000.  The remaining $1.1million of the increase was attributable to the expansion ofservices and products offered at our existing facilities and theaddition of new management resources to support the expandedoperations.

**DEPRECIATION ANDAMORTIZATION**

Depreciationand amortization increased 8.5%, or $1.0 million, to $12.3million.  The increase was attributable to the expansion ofour international operations and for corporate informationsystems.

**23**

----

|                                | **Depreciation and Amortization**                          |
|--------------------------------|------------------------------------------------------------|
|                                | **         ** | **2000** | **                1999** |   |
|                                |                                                       |
| U.S.Pharmacy Services Business |                                                  |            $ 5,475 | $ 5,033 |   |
| International Operations       |                                                            | 1,953 | 1,775 |   |
| UnallocatedCorporate           |                                                            | 4,906 | 4,558 |   |
|                                |                                                       |
| Total                          |                                                            | $12,334 | $11,366 |   |
|                                |                                                       |

**LIQUIDITY**

The Company believesthat sufficient resources are available through a combination ofinternal and external sources to fund all of its 2002 operating andbusiness expansion needs.  Cash flow from operations improvedto $57.6 million in 2001 from $36.2 million in 2000.  Theimprovements continue to be due to increased profitability andmanagement of our working capital accounts.

Trade receivables,which relate to our U.S. Pharmacy and International businesses,have increased due to overall sales increases and from receivablesacquired through acquisitions. 

The Company increasedits line of credit from $150 million in 2000 to $200 million as ofDecember 31, 2001.  The Company has traditionally used itscash provided from operations to fund its capital assetpurchases.  The Company’s credit line has been utilizedto fund significant acquisitions.

In 2001, the Companyacquired additional businesses for approximately $28 millionutilizing its line of credit.  The Company also assumedapproximately $0.3 million in debt in these acquisitiontransactions.  The results of these acquisitions are partlyreflected in the change in the categories of “Property andEquipment”, “Goodwill”, and “AccountsReceivable” assets.  The Company had  $28.5 millionavailable but unused for borrowing under the line of credit atDecember 31, 2001.

On January 17, 2002,the Company completed an asset securitization agreement using thetrade receivables as collateral. This securitization program allowsthe Company to borrow up to $65 million at rates generally morefavorable than the credit line agreement. Upon execution of thesecuritization agreement, our credit line had a provision thatrequired a 50% reduction of the securitization amount, or $32.5 million.  Therefore, the credit line has a currentborrowing limit of $167.5 million.  At January 17, 2002, theCompany had $52.6 million combined credit available but unused fromits credit line and asset securitization line.

The Company plans toslow the pace of acquisitions during 2002 in the Internationalbusiness segments so that the focus can be on improving theprofitability and cash flows of these lines of business.  Asmentioned above, the Company believes it has sufficient resourcesavailable to fund its 2002 acquisition needs and purchases ofcapital assets.

**STOCK REPURCHASEPROGRAM**

On June 23, 1999, ourboard of directors authorized the repurchase of up to 1,075,600shares of our common stock. Through December 31, 2001, we hadrepurchased 761,662 shares of our common stock leaving 313,938shares remaining for repurchase under the program. The timing andsize of any future stock repurchases are subject to marketconditions, stock prices and cash availability. A portion of suchrepurchases are expected to cover future issuances in ourEmployees’ Savings and Stock Ownership Plan(ESSOP).

**CAPITALSPENDING**

The Company’smedical imaging operations and FDG production facilities arecapital intensive. The Company may, from time to time, purchase newequipment or upgrade existing equipment. The cost of these capitalpurchases or upgrades can vary from several thousand dollars toamounts well over $1 million per piece of equipment. The Company,on an on-going basis, evaluates its needs for acquiring newequipment or upgrading existing equipment.  We have madesignificant investments during the last three years in newequipment and upgrades of existing equipment. The Company expectsthat capital investments during 2002 will be less than historicallevels.

**24**

----

**RECENT DEVELOPMENTS INMEDICARE REIMBURSEMENT**

On August 1,2000, CMS began setting reimbursement rates forradiopharmaceuticals based on the prices submitted bymanufacturers, which tend to be lower than the previous pricesbased on the pass-through rate.  Since our sales ofradiopharmaceuticals are made to hospitals and clinics, we get paidby them, not reimbursed by CMS.  The introduction of setreimbursement rates nevertheless could have an impact on the pricesthat customers will be willing to pay for the radiopharmaceuticalsthat they purchase from us, and that impact, in turn, could affectour revenues.  We cannot predict at this time what impactthose changes will have on our radiopharmacy business.

Further, CMS recentlyapproved reductions in reimbursement rates for PET studies forhospital outpatients effective April 1, 2002.  We are not ableto predict the effects of this change in Medicare reimbursementpolicies.

**SAFE HARBORSTATEMENT**

Statements which arenot historical facts, including statements about our confidence,strategies and expectations, opportunities, industry and marketgrowth, demand and acceptance of new and existing products, andreturn on investments are forward-looking statements that involverisks and uncertainties, including without limitation, the effectof general economic and market conditions, supply and demand forour products, competitor pricing, maintenance of our current marketposition and other risk factors documented in the section entitled“Risk Factors” in Part I of the Form 10-K. Given theseuncertainties, undue reliance should not be placed on suchforward-looking statements.

**Item7A.     QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK.**

Interest income earnedon the Company's investment portfolio is affected by changes in thegeneral level of U.S. interest rates. The Company's line of creditborrowings effectively bear interest at variable rates andtherefore, changes in U.S. interest rates affect interest expenseincurred thereon. Changes in interest rates do not affect interestexpense incurred on the Company's fixed rate debt. The followingtable provides information about the Company's financial debtinstruments that are sensitive to changes in interest rates. Thetable presents principal cash flows and related weighted-averageinterest rates by expected maturity dates. The Company did engagein an interest rate swap during 2001, but the dollar amount of theswap was not significant.  The gain or loss on thistransaction did not materially affect the financial results. Thefair value of the financial instruments approximates the carryingvalue.
| **DECEMBER 31, 2001 (IN THOUSANDS)**               | **                ** | **2002** | **          ** | **2003**                               | **          ** | **2004**             | **           ** | **2005**             | **          ** | **2006**                     | **       ** | **Thereafter**             | **          ** | **Total** |
|----------------------------------------------------|------------------------------------------------------------------------------------------------------|----------|------------------------------------------------------------------|----------------------------------------|------------------------------------------------------------------|----------------------|------------------------------------------------------------------------|----------------------|------------------------------------------------------------------|------------------------------|------------------------------------------------|----------------------------|------------------------------------------------------------------|-----------|
|                                                    |
| Long-term debt                                     |                                                                                                      |          |                                                                  |                                        |                                                                  |                      |                                                                        |                      |                                                                  |                              |                                                |                            |                                                                  |           |
|                                          |                                                                                                      |          |                                                                  |                                        |                                                                  |                      |                                                                        |                      |                                                                  |                              |                                                |                            |                                                                  |           |
|      Fixedrate            |                                                                                                      | $1,770   |                                                                  | $6,909                                 |                                                                  | $921                 |                                                                        | $849                 |                                                                  | $    318 |                                                | $    0 |                                                                  | $10,767   |
|                                          |                                                                                                      |          |                                                                  |                                        |                                                                  |                      |                                                                        |                      |                                                                  |                              |                                                |                            |                                                                  |           |
|      Average interestrate |                                                                                                      | 6.45%    |                                                                  | 6.25%                                  |                                                                  | 6.05%                |                                                                        | 6.25%                |                                                                  | 7.43%                        |                                                | 0%                         |                                                                  |           |
|                                          |                                                                                                      |          |                                                                  |                                        |                                                                  |                      |                                                                        |                      |                                                                  |                              |                                                |                            |                                                                  |           |
|      Variablerate         |                                                                                                      | $4,575   |                                                                  | $     — |                                                                  | $  — |                                                                        | $  — |                                                                  | $26,121                      |                                                | $  —       |                                                                  | $30,696   |
|                                          |                                                                                                      |          |                                                                  |                                        |                                                                  |                      |                                                                        |                      |                                                                  |                              |                                                |                            |                                                                  |           |
|      Average interestrate |                                                                                                      | 3.74%    |                                                                  | 3.88%                                  |                                                                  | 3.88%                |                                                                        | 3.88%                |                                                                  | 3.88%                        |                                                |                            |                                                                  |           |
|                                                    |

Based uponthe Company’s variable rate borrowing levels, a 1% change ininterest rates would have resulted in a pre-tax fluctuation ofapproximately $1.4 million and $0.9 million, in 2001 and 2000respectively.

**Item8.     FINANCIAL STATEMENTS ANDSUPPLEMENTARY DATA.**

The Company’sconsolidated financial statements at December 31, 2001 and 2000 andthe Report of KPMG LLP, Independent Auditors, are included in thisAnnual Report on Form 10-K/A-1 on pages 34 through 57.

**25**

----

**PARTIII**

**Item10.     DIRECTORS AND EXECUTIVE OFFICERSOF THE REGISTRANT.**

The information called forby this Item 10 is incorporated by reference from our definitiveProxy Statement for our Annual Meeting of Stockholders on June 17,2002, which was filed with the Commission pursuant to Regulation14A of the Securities and Exchange Commission (“Regulation14A”) within 120 days from December 31, 2001.

Based solely upon ourreview of Forms 3, 4 and 5 furnished to us, we believe that allreports required to be filed during 2001 pursuant to Section 16(b)of the Securities Exchange Act of 1934 were timely filed, exceptthat Robert Funari was 25 days late in filing his Form 4 to reporta zero cost collar transaction in December2001.    

**Item11.     EXECUTIVECOMPENSATION.**

The information called forby this Item 11 is hereby incorporated by reference from ourdefinitive Proxy Statement for our Annual Meeting of Stockholderson June 17, 2002.

**Item12.     SECURITY OWNERSHIP OF CERTAINBENEFICIAL OWNERS AND MANAGEMENT.**

The information called forby this Item 12 is hereby incorporated by reference from ourdefinitive Proxy Statement for our Annual Meeting of Stockholderson June 17, 2002.

**  Item13.     CERTAIN RELATIONSHIPS AND RELATEDTRANSACTIONS.**

The information called forby this Item 13 is hereby incorporated by reference from ourdefinitive Proxy Statement for our Annual Meeting of Stockholderson June 17, 2002.

**PARTIV**

**Item14.     EXHIBITS, FINANCIAL STATEMENTSCHEDULES AND REPORTS ON FORM 8-K.**

The following documentsare filed as part of this report:

      ** (a)   1.  Consolidated FinancialStatements.**
|                      |                                                                         |          | **Page** |
|--------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|--------------------------------------------------|----------|
|                                                                                                                          | Independent Auditors'Report                                             |                                                  | 34       |
|                                                                                                                          | Consolidated BalanceSheets                                              |                                                  | 35       |
|                                                                                                                          | Consolidated Statements ofIncome                                        |                                                  | 36       |
|                                                                                                                          | Consolidated Statements ofStockholders' Equity and Comprehensive Income |                                                  | 37       |
|                                                                                                                          | Consolidated Statements ofCash Flows                                    |                                                  | 38       |
|                                                                                                                          | Notes to ConsolidatedFinancial Statements                               |                                                  | 39       |

**               2.  Financial Statement Schedules.**

                               The following schedule supporting the financial statements of theCompany is included herein:
|                      |             |                   |                        |            |                |                     | **Page** |
|--------------------------------------------------------------------------------------------------------------------------|-------------|--------------------------------------------------------------------------------------------------------|----------------------------------|--------------------------------------------------------------|--------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|----------|
|                                                                                                                          | Schedule II |                                                                                                        | Valuation and QualifyingAccounts |                                                              |                                                                                      |                                                                                                                    | 59       |

****

**26**

----

All other schedules andfinancial statements of the Company are omitted because they arenot applicable or not required or because the required informationis included in the consolidated financial statements or notesthereto.

**       (b)   Reports on Form 8-K filed in the Quarter EndedDecember 31, 2001.**

                None.

**       (c)   Exhibits.**
|                 | Exhibit                                                                              |                                                                                                                                                                                                                                                  |
|--------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 | No.                                                                                  | Description                                                                                                                                                                                                                                      |
|                                                                                            |                                                                                      |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 3.                                                                                   | Certificate ofIncorporation and By-Laws                                                                                                                                                                                                          |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 3.1                                                                                  | Restated Certificate ofIncorporation of the Company filed as Exhibit 3.1 to the Form 10-Qfor the quarter ended June 30, 1999, and incorporated herein byreference.                                                                               |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 3.2                                                                                  | Restated By-Laws of theCompany, filed as Exhibit 3.2 to the Form 10-K for the year endedDecember 31, 1995, and incorporated herein by reference.                                                                                                 |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 4.                                                                                   | Instruments Defining theRights of Security Holders                                                                                                                                                                                               |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 4.1                                                                                  | Stock Certificate forCommon Stock of the Company filed as Exhibit 4.1 to the Form 10-Kfor the year ended May 31, 1986, and incorporated herein byreference.                                                                                      |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 4.2                                                                                  | Rights Agreement dated asof September 28, 1999 between the Company and American StockTransfer & Trust Company filed as Exhibit 4 to the Form 8-Kdated September 28, 1999 and filed on October 12, 1999, andincorporated herein by reference. |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 10.                                                                                  | MaterialContracts                                                                                                                                                                                                                                |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 10.1                                              | Form of IndemnityAgreement substantially as entered into between the Company andeach Director and Officer, filed as Exhibit 3.2 Appendix A to theForm 10-K for the year ended December 31, 1995, and incorporatedherein by reference.*           |
|                 |                |                                                                                                                                                                                                                                                  |
|                 | 10.2                                                                                 | Form of Benefits Agreementsubstantially as entered into between the Company and eachDirector, filed as Exhibit 10.8 to the Form 10-K for the year endedDecember 31, 1995, and incorporated herein byreference.*                                  |
|                 |                |                                                                                                                                                                                                                                                  |

___________________________*     Management contract or compensatoryplan

**27**

----

|                 | 10.3                                                                                 | Form of Benefits Agreementsubstantially as entered into between the Company and certainemployees, filed as Exhibit 10.8 to the Form 10-K for the yearended December 31, 1995, and incorporated herein byreference.*                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                 | 10.4                                                                                 | Syncor InternationalCorporation 1990 Master Stock Incentive Plan, as amended andrestated as of June 18, 1997, filed as Exhibit 10.1 to theCompany’s Form 10-Q for the quarter ended June 30, 1997, andincorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                 |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                 | 10.5                                                                                 | First Amendment to theSyncor International Corporation 1990 Master Stock Incentive Plan,as amended and restated as of June 23, 1999, filed as Exhibit 10.4to the Form 10-Q for the quarter ended June 30, 1999, andincorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                 |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                 | 10.6                                                                                 | Form of Stock OptionAgreement substantially as entered into between the Company andcertain employee Directors and employees filed as Exhibit 10.15 tothe Form 10-K for year ended December 31, 1993, and incorporatedherein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                 |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                 | 10.7                                                                                 | Form of Stock OptionAgreement substantially as entered into between the Company andcertain non-employee Directors filed as Exhibit 10.16 to the Form10-K for the year ended December 31, 1993, and incorporated hereinby reference.*                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                 |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                 | 10.8                                                                                 | Non-Employee Director 1995Stock Incentive Award Agreement dated January 24, 1995 entered intobetween the Company and Arnold E. Spangler, filed as Exhibit 10.17to the Form 10-K for the year ended December 31, 1995, andincorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.9                                                                                 | Non-Employee Director 1995Stock Incentive Award Agreement dated January 24, 1995 entered intobetween the Company and George S. Oki, filed as Exhibit 10.18 tothe Form 10-K for the year ended December 31, 1995, andincorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.10                                                                                | Non-Employee Director 1995Stock Incentive Award Agreement dated April 29, 1996, entered intobetween the Company and Gail Wilensky, filed as Exhibit 4.3(b) tothe Registration Statement on Form S-8 filed on December 20, 1996to register the shares underlying said Award Agreement, andincorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                   |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.11                                                                                | Non-Employee Director 1995Stock Incentive Award Agreement dated April 29, 1996, entered intobetween the Company and Steven Gerber, filed as Exhibit 4.3(a) tothe Registration Statement on Form S-8 filed on December 20, 1996to register the shares underlying said Award Agreement, andincorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                   |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.12                                                                                | Subscription Agreement,dated July 15, 1996, executed by Syncor Management Corporation infavor of American Tax Credit Corporate Fund III, L.P., togetherwith a Promissory Note, dated July 15, 1996, executed by SyncorManagement Corporation in favor of John Hancock Mutual LifeInsurance Company, as assignee of Corporate Credit, Inc., and theGuarantee of Parent Corporation, dated July 15, 1996, executed bythe Company in favor of John Hancock Mutual Life Insurance Company,as assignee of Corporate Credit, Inc.  These agreements werefiled as Exhibit 10.15 to the Form 10-K for the year ended December31, 1996, and are incorporated herein by reference. |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.13                                                                                | The Office Lease, dated asof September 30, 1996, between Massachusetts Life Insurance Companyand the Company, relating to the office lease for theCompany’s corporate headquarters in Woodland Hills,California, filed as Exhibit 10.19 to the Form 10-K for the yearended December 31, 1996, and incorporated herein byreference.                                                                                                                                                                                                                                                                                                                                      |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.14                                                                                | Office Lease, datedOctober 19, 2000, between the Company and Nomura-Warner CenterAssociates, L.P., filed as Exhibit 10.16 to the Form 10-K for theyear ended December 31, 2000, and incorporated herein byreference.                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.15                                                                                | Non-Employee DirectorStock Compensation Plan, dated August 27, 1996, filed as Exhibit4.3 to the Form S-8 Registration Statement filed by the Companywith the SEC on December 20, 1996, and incorporated herein byreference.*                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.16                                                                                | Loan Agreement, datedMarch 31, 1997, among Syncor Pharmaceuticals, Inc., as borrower,the Company, as guarantor, and Bank One, NA (formerly The FirstNational Bank of Chicago), as lender, filed as Exhibit 10.1 to theForm 10-Q for the quarter ended March 31, 1997, and incorporatedherein by reference.                                                                                                                                                                                                                                                                                                                                                                    |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.17                                                                                | Syncor InternationalCorporation Deferred Compensation Plan effective January 1, 1998,filed as Exhibit 10.24 to the Form 10-K for the year ended December31, 1997, and incorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                           |                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                           | 10.18                                                                                | Amendment No. 1 to SyncorInternational Corporation Deferred Compensation Plan, datedNovember 21, 2000, filed as Exhibit 10.21 to the Form 10-K for theyear ended December 31, 2000, and incorporated herein byreference.*                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

___________________________*     Management contract or compensatoryplan

**28**

----

|                           | 10.19                                                                                | Amendment No. 2 to SyncorInternational Corporation Deferred Compensation Plan, datedNovember 1, 2001, filed as Exhibit 10.19 to the Form 10-K for theyear ended December 31, 2001, and incorporated herein byreference.*                                                                                          |
|--------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.20                                                                                | Executive Long-TermPerformance Equity Plan, effective as of January 1, 1998, filed asExhibit 10.1 to the Form 10-Q for the quarter ended March 31, 1998,and incorporated herein by reference.*                                                                                                                    |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.21                                                                                | First Amendment toExecutive Long-Term Performance Equity Plan, dated as of November17, 1998, filed as Exhibit 10.25 to the Form 10-K for the yearended December 31, 1998, and incorporated herein byreference.*                                                                                                   |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.22                                                                                | Second Amendment toExecutive Long-Term Performance Equity Plan, dated as of June 23,1999, filed as Exhibit 10.1 to the Form 10-Q for the quarter endedJune 30, 1999, and incorporated herein by reference.*                                                                                                       |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.23                                                                                | Third Amendment toExecutive Long-Term Performance Equity Plan, dated as of June 20,2000, filed as Exhibit 10.1 to the Form 10-Q for the quarter endedJune 30, 2000, and incorporated herein by reference.*                                                                                                        |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.24                                                                                | Fourth Amendment toExecutive Long-Term Performance Equity Plan, dated as of June 20,2000, filed as Exhibit 10.2 to the Form 10-Q for the quarter endedJune 30, 2000, and incorporated herein by reference.*                                                                                                       |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.25                                                                                | Fifth Amendment toExecutive Long-Term Performance Equity Plan, dated August 22, 2000,filed as Exhibit 10.1 to the Form 10-Q for the quarter endedSeptember 30, 2000, and incorporated herein byreference.*                                                                                                        |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.26                                                                                | 1998 Senior ManagementStock Purchase Plan, effective as of June 16, 1998, filed asExhibit 10.1 to the Form 10-Q for the quarter ended June 30, 1998,and incorporated herein by reference.*                                                                                                                        |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.27                                                                                | Universal PerformanceEquity Participation Plan, effective as of June 16, 1998, filed asExhibit 10.2 to the Form 10-Q for the quarter ended June 30, 1998,and incorporated herein by reference.*                                                                                                                   |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.28                                                                                | First Amendment to theUniversal Performance Equity Participation Plan, dated as of June16, 1998, filed together with the Universal Performance Equity Planthat was filed as Exhibit 10.2 to the Form 10-Q for the quarterended June 30, 1998, and incorporated herein byreference.*                               |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.29                                                                                | Second Amendment to theUniversal Performance Equity Participation Plan, dated as of June23, 1999, filed as Exhibit 10.2 to the Form 10-Q for the quarterended June 30, 1999, and incorporated herein byreference.*                                                                                                |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.30                                                                                | Third Amendment to theUniversal Performance Equity Participation Plan, dated as of June23, 1999, filed as Exhibit 10.3 to the Form 10-Q for the quarterended June 30, 1999, and incorporated herein byreference.*                                                                                                 |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.31                                                                                | New Employee Stock OptionPlan, dated as of June 1, 1998, filed as Exhibit 10.1 to the Form10-Q for the quarter ended September 30, 1998, and incorporatedherein by reference.*                                                                                                                                    |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.32                                                                                | First Amendment to theSyncor International Corporation New Employee Stock Option Plan,dated December 5, 2000, filed as Exhibit 10.34 to the Form 10-K forthe year ended December 31, 2000, and incorporated herein byreference.*                                                                                  |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.33                                                                                | Form of Stock OptionAgreement under the New Employee Stock Option Plan as entered intobetween the Company and certain employees, filed as Exhibit 10.31to the Form 10-K for the year ended December 31, 1998, andincorporated herein by reference.*                                                               |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.34                                                                                | Non-Qualified Stock OptionAward Agreement, dated February 24, 1999, between the Company andRobert G. Funari, filed as Exhibit 10.1 to the Form 10-Q for thequarter ended March 31, 1999, and incorporated herein byreference.*                                                                                    |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.35                                                                                | Non-Employee Director 1999Stock Incentive Plan, dated November 11, 1999, filed as Exhibit10.35 to the Form 10-K for the year ended December 31, 1999, andincorporated herein by reference.*                                                                                                                       |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.36                                                                                | Form of Non-EmployeeDirector 1999 Stock Incentive Award Agreement, dated November 11,1999, entered into between the Company and each of the non-employeedirectors (excluding Ronald Williams), filed as Exhibit 10.36 tothe Form 10-K for the year ended December 31, 1999, andincorporated herein by reference.* |
|                 |                |                                                                                                                                                                                                                                                                                                                   |
|                 | 10.37                                                                                | Split Dollar Agreementbetween the Company and the Monty and Wendy Fu 1998 IrrevocableTrust, dated January 8, 1999, filed as Exhibit 10.37 to the Form10-K for the year ended December 31, 1999, and incorporated hereinby reference.*                                                                             |
|                 |                |                                                                                                                                                                                                                                                                                                                   |

___________________________*     Management contract or compensatoryplan

**29**

----

|                 | 10.38                                                                                      | Employment Agreement ofRobert G. Funari, dated as of January 1, 2000, filed as Exhibit10.1 to the Form 10-Q for the quarter ended March 31, 2000, andincorporated herein by reference.*                                                                                                                                                                             |
|--------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.39                                                                                      | Employment Agreement ofMonty Fu, dated as of January 1, 2000, filed as Exhibit 10.2 to theForm 10-Q for the quarter ended March 31, 2000, and incorporatedherein by reference.*                                                                                                                                                                                     |
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.40                                                                                      | Severance Agreement datedAugust 24, 2001 between Haig Bagerdjian and the Company, filed asExhibit 10.2 to the Form 10-Q for the quarter ended September 30,2001, and incorporated herein by reference.*                                                                                                                                                             |
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.41                                                                                      | Severance Agreement datedAugust 24, 2001 between John S. Baumann and the Company, filed asExhibit 10.3 to the Form 10-Q for the quarter ended September 30,2001, and incorporated herein by reference.*                                                                                                                                                             |
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.42                                                                                      | Severance Agreement datedAugust 24, 2001 between Rodney Boone and the Company, filed asExhibit 10.4 to the Form 10-Q for the quarter ended September 30,2001, and incorporated herein by reference.*                                                                                                                                                                |
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.43                                                                                      | Severance Agreement datedAugust 24, 2001 between Jack Coffey and the Company, filed asExhibit 10.5 to the Form 10-Q for the quarter ended September 30,2001, and incorporated herein by reference.*                                                                                                                                                                 |
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.44                                                                                      | Severance Agreement datedAugust 24, 2001 between Sheila Coop and the Company, filed asExhibit 10.6 to the Form 10-Q for the quarter ended September 30,2001, and incorporated herein by reference.*                                                                                                                                                                 |
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.45                                                                                      | Severance Agreement datedAugust 24, 2001 between William Forster and the Company, filed asExhibit 10.7 to the Form 10-Q for the quarter ended September 30,2001, and incorporated herein by reference.*                                                                                                                                                             |
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.46                                                                                      | Severance Agreement datedAugust 24, 2001 between Monty Fu and the Company, filed as Exhibit10.8 to the Form 10-Q for the quarter ended September 30, 2001, andincorporated herein by reference.*                                                                                                                                                                    |
|                 |                      |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.47                                                                                      | Severance Agreement datedAugust 24, 2001 between Robert Funari and the Company, filed asExhibit 10.9 to the Form 10-Q for the quarter ended September 30,2001, and incorporated herein by reference.*                                                                                                                                                               |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.48                                                                                      | Severance Agreement datedAugust 24, 2001 between Lewis William Terry, Jr. and the Company,filed as Exhibit 10.10 to the Form 10-Q for the quarter endedSeptember 30, 2001, and incorporated herein byreference.*                                                                                                                                                    |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.49                                                                                      | Severance Agreement datedAugust 24, 2001 between David Ward and the Company, filed asExhibit 10.11 to the Form 10-Q for the quarter ended September 30,2001, and incorporated herein by reference.*                                                                                                                                                                 |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.50                                                                                      | Syncor InternationalCorporation Special Severance Plan, filed as Exhibit 10.12 to theForm 10-Q for the quarter ended September 30, 2001, andincorporated herein by reference.*                                                                                                                                                                                      |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.51                                                                                      | Term Loan CreditAgreement, dated as of May 5, 2000, between Bank One, N.A. andSyncor Management Corporation, filed as Exhibit 10.7 to the Form10-Q for the quarter ended June 30, 2000, and incorporated hereinby reference.                                                                                                                                        |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.52                                                                                      | Credit Agreement, dated asof October 17, 2000, among the Company, Bank One, N.A., asAdministrative Agent, Bank One Capital Markets, Inc., as LeadArranger, The Bank of Nova Scotia, as Documentation Agent, andother lenders signatories thereto, filed as Exhibit 10.43 to theForm 10-K for the year ended December 31, 2000, and incorporatedherein by reference. |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.53                                                                                      | Letter Amendment to CreditAgreement, dated February 5, 2001, between the Company and BankOne, N.A., filed as Exhibit 10.44 to the Form 10-K for the yearended December 31, 2000, and incorporated herein byreference.                                                                                                                                               |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.54                                                                                      | First Amended and RestatedCredit Agreement, dated as of May 10, 2001 with Bank One, N.A. asLender and the Bank of Nova Scotia as Document Agent, filed asExhibit 10.1 to the Form 10-Q for the quarter ended June 30, 2001,and incorporated herein by reference.                                                                                                    |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |
|                 | 10.55                                                                                      | First Amendment to FirstAmended and Restated Credit Agreement dated as of September 13,2001, among Bank One, N.A. as Lender, The Bank of Nova Scotia asDocument Agent, the Company and Syncor Management Corporation,filed as Exhibit 10.1 to the Form 10-Q for the quarter endedSeptember 30, 2001, and incorporated herein byreference.                           |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                     |

___________________________*     Management contract or compensatoryplan

**30**

----

|                 | 10.56                                                                                      | Second Amendment to FirstAmended and Restated Credit Agreement dated as of December 21,2001, among Bank One, N.A. as Lender, The Bank of Nova Scotia asDocument Agent, the Company and Syncor Management Corporation,filed as Exhibit 10.56 to the Form 10-K for the year ended December31, 2001, and incorporated herein by reference.                                    |
|--------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                            |
|                 | 10.57                                                                                      | Receivables FinancingAgreement dated January 4, 2002 among Syncor Financing Corporation,as Seller, Syncor Management Corporation, as Servicer, JupiterSecuritization Corporation, the Financial Institutions listedtherein and Bank One, N.A., as Agent, filed as Exhibit 10.57 to theForm 10-K for the year ended December 31, 2001, and incorporatedherein by reference. |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                            |
|                 | 21.                                                                                        | Subsidiaries of theRegistrant                                                                                                                                                                                                                                                                                                                                              |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                            | 23.                                                                                        | Independent Auditors'Consent                                                                                                                                                                                                                                                                                                                                               |
|                 |                 |                                                                                                                                                                                                                                                                                                                                                                            |
|                 | 99.1                                                                                       | Certification of CEO andCFO Regarding Annual Report on Form 10-K/A-1                                                                                                                                                                                                                                                                                                       |

___________________________*     Management contract or compensatoryplan

**31**

----

**SIGNATURES**

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Actof 1934, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto dulyauthorized.

  
| Date:   October11, 2002                                                                                     | SYNCOR INTERNATIONALCORPORATION                                                                                                                                                                                                                                                   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                   | By /s/Robert G.Funari                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       Robert G.Funari       President and Chief ExecutiveOfficer                                                                                                                                                      |

**32**

----

**CERTIFICATION OF CHIEF EXECUTIVEOFFICER**

I, Robert G. Funari,certify that:
|         | 1. |       | I have reviewed thisannual report on Form 10-K/A-1 of Syncor InternationalCorporation;                                                                                                                                                                                                                                  |
|--------------------------------------------|----|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |    |                                |                                                                                                                                                                                                                                                                                                                         |
|                                  | 2. |                                | Based on my knowledge,this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the periodcovered by this annual report; and |
|                                  |    |                                |                                                                                                                                                                                                                                                                                                                         |
|                                  | 3. |                                | Based on my knowledge, thefinancial statements, and other financial information included inthis annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of theregistrant as of, and for, the periods presented in this annualreport.                        |

Date:   October11, 2002
|                                                                                                   | By /s/Robert G.Funari                                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                               |       Robert G.Funari       President and Chief ExecutiveOfficer                                                                                                      |

****

**CERTIFICATION OF CHIEF FINANCIALOFFICER**

I, William P. Forster,certify that:
|         | 1. |       | I have reviewed thisannual report on Form 10-K/A-1 of Syncor InternationalCorporation;                                                                                                                                                                                                                                  |
|--------------------------------------------|----|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |    |                                |                                                                                                                                                                                                                                                                                                                         |
|                                            | 2. |                                | Based on my knowledge,this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the periodcovered by this annual report; and |
|                                  |    |                                |                                                                                                                                                                                                                                                                                                                         |
|                                            | 3. |                                | Based on my knowledge, thefinancial statements, and other financial information included inthis annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of theregistrant as of, and for, the periods presented in this annualreport.                        |

Date:   October11, 2002
|                                                                                                          | By /s/William P.Forster                                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |       William P.Forster       Sr. Vice President and ChiefExecutive Officer                                                                                                                                                               |

**33**

----

**INDEPENDENT AUDITORS’ REPORT**

The Board of Directorsand Stockholders, Syncor International Corporation

We have audited theaccompanying consolidated balance sheets of Syncor InternationalCorporation and subsidiaries as of December 31, 2001 and 2000, andthe related consolidated statements of income, stockholders’equity and comprehensive income and cash flows for each of theyears in the three-year period ended December 31, 2001. Theseconsolidated financial statements are the responsibility of theCompany’s management. Our responsibility is to express anopinion on these consolidated financial statements based on ouraudits.

We conducted ouraudits in accordance with auditing standards generally accepted inthe United States of America. Those standards require that we planand perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.

In our opinion, theconsolidated financial statements referred to above present fairly,in all material respects, the financial position of SyncorInternational Corporation and subsidiaries as of December 31, 2001and 2000, and the results of their operations and their cash flowsfor each of the years in the three-year period ended December 31,2001, in conformity with accounting principles generally acceptedin the United States of America.

As discussed in Note 2to the consolidated financial statements, effective July 1, 2001,the Company adopted the provisions of Statement of FinancialAccounting Standards (“SFAS”) No. 141, “BusinessCombinations,” and certain provisions of SFAS No. 142,“Goodwill and Other Intangible Assets,” as required forgoodwill and intangible assets, resulting from businesscombinations consummated after June 30, 2001.

  

                                                                                                                                   /s/KPMG LLP

Los Angeles,CaliforniaFebruary 15, 2002, except as to Note 1, which is as of June 14,2002, and Note 14, which is as of September 30, 2002.

  

**MANAGEMENT’S REPORT**

The Management of SyncorInternational Corporation is responsible for the consolidatedfinancial statements and all other information presented in thisreport. The consolidated financial statements have been prepared inconformity with accounting principles generally accepted in theUnited States of America appropriate in the circumstances and,therefore, included in the consolidated financial statements arecertain amounts based on management's informed estimates andjudgments. Management is responsible for establishing andmaintaining a system of internal control designed to providereasonable assurance as to the integrity and reliability offinancial reporting. The concept of reasonable assurance is basedon the recognition that there are inherent limitations in allsystems of internal control, and that the cost of such systemsshould not exceed the benefits to be derived there from. Otherfinancial information in this report is consistent with that in theconsolidated financial statements. The consolidated financialstatements have been audited by Syncor International Corporation'sindependent certified public accountants and have been reviewed bythe Audit Committee of the Board of Directors.

**34**

----

**CONSOLIDATED BALANCESHEETS**
| **(IN THOUSANDS EXCEPT PER SHARE DATA)**                                                                              | **   ** | **DECEMBER 31, 2001** | **   ** | **DECEMBER 31, 2000** |   |
|-----------------------------------------------------------------------------------------------------------------------|------------------------|-----------------------|------------------------|-----------------------|---|
|                                                                                                                       |
| ASSETS                                                                                                                |                        |                       |                        |                       |   |
|                                                                                                             |                        |                       |                        |                       |   |
| CurrentAssets:                                                                                                        |                        |                       |                        |                       |   |
|      Cash and cashequivalents                                                                |                        | $17,634               |                        | $24,330               |   |
|      Short-terminvestments                                                                   |                        | 10,215                |                        | 3,517                 |   |
|      Trade receivables, lessallowance for doubtful                                           |                        |                       |                        |                       |   |
|           accountsof $3,749 and $2,485, respectively                |                        | 97,003                |                        | 77,751                |   |
|      Inventory                                                                               |                        | 28,879                |                        | 58,995                |   |
|      Prepaids and other currentassets                                                        |                        | 19,215                |                        | 11,860                |   |
|      Total assets –discontinued operations (note 1)                                    |                        | 283,154               |                        | 210,649               |   |
|                                                                                                                       |
|           Totalcurrent assets                                       |                        | 456,100               |                        | 387,102               |   |
|                                                                                                                       |
| Marketable investmentsecurities                                                                                       |                        | 1,006                 |                        | 1,190                 |   |
| Property andequipment, net                                                                                            |                        | 86,812                |                        | 51,211                |   |
| Excess of purchaseprice over net assets acquired, net of                                                              |                        |                       |                        |                       |   |
|      accumulated amortization of$8,248 and $7,216,respectively      |                        | 30,498                |                        | 14,093                |   |
|                                                                                                             |                        |                       |                        |                       |   |
| Otherassets                                                                                                           |                        | 13,425                |                        | 17,113                |   |
|                                                                                                                       |
|                                                                                                                       |                        | $587,841              |                        | $470,709              |   |
|                                                                                                                       |
| LIABILITIES ANDSTOCKHOLDERS' EQUITY                                                                                   |                        |                       |                        |                       |   |
|                                                                                                             |                        |                       |                        |                       |   |
| CurrentLiabilities:                                                                                                   |                        |                       |                        |                       |   |
|      Accounts payable                                                                        |                        | $62,021               |                        | $78,887               |   |
|      Accruedliabilities                                                                      |                        | 13,982                |                        | 10,187                |   |
|      Accrued wages and relatedcosts                                                          |                        | 13,149                |                        | 16,471                |   |
|      Federal and state taxespayable                                                          |                        | 4,530                 |                        | 4,488                 |   |
|      Current maturities oflong-term debt                                                     |                        | 6,345                 |                        | 4,283                 |   |
|      Total liabilities –discontinued operations (note 1)                               |                        | 215,635               |                        | 152,114               |   |
|                                                                                                                       |
|           Totalcurrent liabilities                                  |                        | 315,662               |                        | 266,430               |   |
|                                                                                                                       |
| Long-term debt, net ofcurrent maturities                                                                              |                        | 35,118                |                        | 18,399                |   |
| Deferredtaxes                                                                                                         |                        | 2,233                 |                        | —               |   |
|                                                                                                             |                        |                       |                        |                       |   |
| Stockholders'Equity:                                                                                                  |                        |                       |                        |                       |   |
|      Common stock $.05 par value;authorized 200,000                                          |                        |                       |                        |                       |   |
|           shares;issued 24,831 and 24,425 shares at                 |                        |                       |                        |                       |   |
|           December31, 2001 and 2000, respectively                   |                        | 1,420                 |                        | 1,376                 |   |
|      Additional paid-incapital                                                               |                        | 124,909               |                        | 107,268               |   |
|      Notes receivables fromrelated parties                                                   |                        | (6,197                | )                      | (16,796               | ) |
|      Accumulated othercomprehensive loss                                                     |                        | (3,653                | )                      | (1,245                | ) |
|      Employee savings and stockownership loan guarantee                                      |                        | —               |                        | (1,685                | ) |
|      Retained earnings                                                                       |                        | 151,888               |                        | 114,019               |   |
|         Treasury stock, at cost, 3,575 and3,072 shares                             |                        |                       |                        |                       |   |
|           atDecember 31, 2001 and 2000, respectively                |                        | (33,539               | )                      | (17,057               | ) |
|                                                                                                                       |
|           Totalstockholders' equity                                 |                        | 234,828               |                        | 185,880               |   |
|                                                                                                                       |
|                                                                                                                       |                        | $587,841              |                        | $470,709              |   |
|                                                                                                                       |

*See accompanying Notesto Consolidated Financial Statements*

**35**

----

**CONSOLIDATED STATEMENTSOF INCOME**
| **(IN THOUSANDS, EXCEPT PER SHARE DATA)**                        | **     ** | **YEARENDED DECEMBER 31, 2001** | **     ** | **YEARENDED DECEMBER 31, 2000** | **     ** | **YEARENDED DECEMBER 31, 1999** |   |
|------------------------------------------------------------------|------------------------------------|---------------------------------|------------------------------------|---------------------------------|------------------------------------|---------------------------------|---|
|                                                                  |
| Net sales                                                        |                                    | $598,136                        |                                    | $517,552                        |                                    | $457,156                        |   |
| Cost of sales                                                    |                                    | 417,745                         |                                    | 367,870                         |                                    | 333,088                         |   |
|                                                                  |
|      Grossprofit                        |                                    | 180,391                         |                                    | 149,682                         |                                    | 124,068                         |   |
|                                                        |                                    |                                 |                                    |                                 |                                    |                                 |   |
| Operating, selling andadministrative expenses                    |                                    | 107,221                         |                                    | 93,609                          |                                    | 79,839                          |   |
| Depreciation andamortization                                     |                                    | 16,912                          |                                    | 12,334                          |                                    | 11,366                          |   |
|                                                                  |
|      Operatingincome                    |                                    | 56,258                          |                                    | 43,739                          |                                    | 32,863                          |   |
|                                                        |                                    |                                 |                                    |                                 |                                    |                                 |   |
| Other income(expense):                                           |                                    |                                 |                                    |                                 |                                    |                                 |   |
|      Interestincome                     |                                    | 1,972                           |                                    | 2,054                           |                                    | 1,945                           |   |
|      Interestexpense                    |                                    | (1,750                          | )                                  | (1,447                          | )                                  | (1,299                          | ) |
| Other, net                                                       |                                    | (1,322                          | )                                  | 975                             |                                    | (1,982                          | ) |
|                                                                  |
| Other income (expense),net                                       |                                    | (1,100)                         |                                    | 1,582                           |                                    | (1,336                          | ) |
|                                                        |                                    |                                 |                                    |                                 |                                    |                                 |   |
| Income from continuingoperations before taxes                    |                                    | 55,158                          |                                    | 45,321                          |                                    | 31,527                          |   |
| Provision for incometaxes                                        |                                    | 20,646                          |                                    | 17,281                          |                                    | 13,355                          |   |
|                                                                  |
| Income from continuingoperations                                 |                                    | $34,512                         |                                    | $28,040                         |                                    | $18,172                         |   |
|                                                                  |
| Income from discontinuedoperations, net of taxes (Note 1)        |                                    | $3,357                          |                                    | $1,498                          |                                    | $1,049                          |   |
| Net income                                                       |                                    | $37,869                         |                                    | $29,538                         |                                    | $19,221                         |   |
|                                                        |                                    |                                 |                                    |                                 |                                    |                                 |   |
| Net income per share– basic:                               |                                    |                                 |                                    |                                 |                                    |                                 |   |
|                                                                  |                                    |                                 |                                    |                                 |                                    |                                 |   |
|      Continuingoperations               |                                    | $1.40                           |                                    | $1.17                           |                                    | $0.78                           |   |
|      Discontinuedoperations             |                                    | $0.14                           |                                    | $0.06                           |                                    | $0.04                           |   |
|                                                                  |
|      Net income pershare                |                                    | $1.54                           |                                    | $1.23                           |                                    | $0.82                           |   |
|                                                                  |
|      Weighted averageshares outstanding |                                    | 24,570                          |                                    | 23,948                          |                                    | 23,340                          |   |
|                                                                  |
| Net income per share– diluted:                             |                                    |                                 |                                    |                                 |                                    |                                 |   |
|                                                        |                                    |                                 |                                    |                                 |                                    |                                 |   |
|      Continuingoperations               |                                    | $1.28                           |                                    | $1.05                           |                                    | $0.71                           |   |
|      Discontinuedoperations             |                                    | $0.12                           |                                    | $0.06                           |                                    | $0.04                           |   |
|                                                                  |
|      Net income pershare                |                                    | $1.40                           |                                    | $1.11                           |                                    | $0.75                           |   |
|                                                                  |
|      Weighted averageshares outstanding |                                    | 27,029                          |                                    | 26,657                          |                                    | 25,478                          |   |
|                                                                  |

*See accompanying Notesto Consolidated Financial Statements*

**36**

----

**CONSOLIDATED STATEMENTSOF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME**
|                                                                             |  |                 |                          |         |                          |            |                          |             |                     | **Accumulated OtherComprehensive Incomes** |                     |            |                     |          |                          |          |                     |                     |                     |
|-----------------------------------------------------------------------------|--|-----------------|--------------------------|---------|--------------------------|------------|--------------------------|-------------|---------------------|--------------------------------------------|---------------------|------------|---------------------|----------|--------------------------|----------|---------------------|---------------------|---------------------|
|                                                                             |  |                 |                          |         |                          |            |                          | Employee    |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     |  |  |
|                                                                             |  |                 |                          |         |                          |            |                          | Savings     |                     |                                            |                     |            |                     |          |                          |          |                     | Notes               |                     |  |  |
|                                                                             |  |                 |                          |         |                          |            |                          | & Stock |                     | Unrealized                                 |                     | Foreign    |                     |          |                          |          |                     | Receivable          |                     |  |  |
|                                                                             |  |                 |                          |         |                          | Additional |                          | Ownership   |                     | Gain or                                    |                     | Currency   |                     |          |                          |          |                     | From                |                     | Total |  |
|                                                                             |  | **CommonStock** |                          | Paid-In |                          | Loan       |                          | (Loss) on   |                     | Translation                                |                     | Retained   |                     | Treasury |                          | Related  |                     | Stockholders’ |                     |
| **(INTHOUSANDS)**                                                           |  | Shares          |                          | Amount  |                          | Capital    |                          | Guarantee   |                     | Investments                                |                     | Adjustment |                     | Earnings |                          | Stock    |                     | Parties             |                     | Equity |  |
|                                                                             |
| **Balanceat December 31, 1998**                                             |  | 22,322          |      | $1,252  |      | $71,996    |      | $(5,056     | )    | $(317                                      | )    | $(210      | )    | $65,260  |      | $(12,524 | )    | $(9,028             | )    | $111,373 |  |
| Issuance ofcommon stock                                                     |  | 1,578           |                          | 78      |                          | 15,865     |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     | (9,664              | )                   | 6,279 |  |
| Tax benefitfrom the exercise of stock      options |  |                 |                          |         |                          | 2,743      |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 2,743 |  |
| Reacquisition of common stock for      treasury    |  | (74             | )                        |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          | (1,082   | )                   |                     |                     | (1,082 | ) |
| Amortizationof loan guarantee                                               |  |                 |                          |         |                          |            |                          | 1,686       |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 1,686 |  |
| Comprehensive Income:                                                       |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     |  |  |
| Unrealizedgain on investments                                               |  |                 |                          |         |                          |            |                          |             |                     | 172                                        |                     |            |                     |          |                          |          |                     |                     |                     |  |  |
| Foreigncurrency translation      adjustment        |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     | (55        | )                   |          |                          |          |                     |                     |                     |  |  |
| Netincome                                                                   |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     | 19,221   |                          |          |                     |                     |                     |  |  |
| TotalComprehensive Income:                                                  |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 19,338 |  |
|                                                                             |
| **Balanceat December 31, 1999**                                             |  | 23,826          |                          | $1,330  |                          | $90,604    |                          | $(3,370     | )                   | $(145                                      | )                   | $(265      | )                   | $84,481  |                          | $(13,606 | )                   | $(18,692            | )                   | $140,337 |  |
| Issuance ofcommon stock                                                     |  | 885             |                          | 46      |                          | 10,400     |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 10,446 |  |
| Tax benefitfrom the exercise of stock      options |  |                 |                          |         |                          | 6,264      |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 6,264 |  |
| Reacquisition of common stock for      treasury    |  | (286            | )                        |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          | (3,451   | )                   |                     |                     | (3,451 | ) |
| Amortizationof loan guarantee                                               |  |                 |                          |         |                          |            |                          | 1,685       |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 1,685 |  |
| Payment fromrelated parties                                                 |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     | 1,896               |                     | 1,896 |  |
| Comprehensive Income:                                                       |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     |  |  |
| Unrealizedgain on investments                                               |  |                 |                          |         |                          |            |                          |             |                     | 138                                        |                     |            |                     |          |                          |          |                     |                     |                     |  |  |
| Foreigncurrency translation      adjustment        |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     | (973       | )                   |          |                          |          |                     |                     |                     |  |  |
| Netincome                                                                   |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     | 29,538   |                          |          |                     |                     |                     |  |  |
| TotalComprehensive Income:                                                  |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 28,703 |  |
|                                                                             |
| **Balanceat December 31, 2000**                                             |  | 24,425          |                          | $1,376  |                          | $107,268   |                          | $(1,685     | )                   | $(7                                        | )                   | $(1,238    | )                   | $114,019 |                          | $(17,057 | )                   | $(16,796            | )                   | $185,880 |  |
| Issuance ofcommon stock                                                     |  | 908             |                          | 44      |                          | 12,770     |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 12,814 |  |
| Tax benefitfrom the exercise of stock      options |  |                 |                          |         |                          | 4,871      |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 4,871 |  |
| Reacquisition of common stock for      treasury    |  | (502            | )                        |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          | (16,482  | )                   |                     |                     | (16,482 | ) |
| Payment fromrelated parties                                                 |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     | 10,599              |                     | 10,599 |  |
| Amortizationof loan guarantee                                               |  |                 |                          |         |                          |            |                          | 1,685       |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 1,685 |  |
| Comprehensive Income:                                                       |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     |  |  |
| Unrealizedgain on investments                                               |  |                 |                          |         |                          |            |                          |             |                     | 20                                         |                     |            |                     |          |                          |          |                     |                     |                     |  |  |
| Foreigncurrency translation      adjustment        |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     | (2,428     | )                   |          |                          |          |                     |                     |                     |  |  |
| Netincome                                                                   |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     | 37,869   |                          |          |                     |                     |                     |  |  |
| TotalComprehensive Income:                                                  |  |                 |                          |         |                          |            |                          |             |                     |                                            |                     |            |                     |          |                          |          |                     |                     |                     | 35,461 |  |
|                                                                             |
| **Balanceat December 31, 2001**                                             |  | 24,831          |                          | $1,420  |                          | $124,909   |                          | $0          |                     | $13                                        |                     | $(3,666    | )                   | $151,888 |                          | $(33,539 | )                   | $(6,197             | )                   | $234,828 |  |
|                                                                             |

*S**eeaccompanying Notes to Consolidated FinancialStatements*

**37**

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**CONSOLIDATED STATEMENTSOF CASH FLOWS**
| **(IN THOUSANDS)**                                                                                                         | **    ** | **YEARENDED DECEMBER 31, 2001** | **   ** | **YEARENDED DECEMBER 31, 2000** | **   ** | **YEARENDED DECEMBER 31, 1999** | **   ** |
|----------------------------------------------------------------------------------------------------------------------------|------------------------------|---------------------------------|------------------------|---------------------------------|------------------------|---------------------------------|------------------------|
|                                                                                                                            |
| Cash flows from operatingactivities:                                                                                       |                              |                                 |                        |                                 |                        |                                 |                        |
| Net income                                                                                                                 |                              | $37,869                         |                        | $29,538                         |                        | $19,221                         |                        |
| Adjustments to reconcilenet income to net cash provided by operating      activities:             |                              |                                 |                        |                                 |                        |                                 |                        |
|      Income fromdiscontinued operations                                                           |                              | (3,357                          | )                      | (1,498                          | )                      | (1,049                          | )                      |
|      Depreciation andamortization                                                                 |                              | 16,912                          |                        | 12,334                          |                        | 11,366                          |                        |
|      Provision forlosses on receivables                                                           |                              | 863                             |                        | 1,568                           |                        | (1,512                          | )                      |
|      Amortization ofloan guarantee                                                                |                              | 1,685                           |                        | 1,685                           |                        | 1,686                           |                        |
|      Changes inoperating assets and liabilities, net ofacquisitions      |                              |                                 |                        |                                 |                        |                                 |                        |
|           Accountsreceivable – trade                               |                              | (13,518                         | )                      | (8,260                          | )                      | (4,792                          | )                      |
|           Inventory                                                      |                              | 36,496                          |                        | (37,470                         | )                      | (10,048                         | )                      |
|           Prepaidsand other current assets                               |                              | (6,498                          | )                      | (5,878                          | )                      | 1,011                           |                        |
|           Otherassets                                                    |                              | 1,383                           |                        | (178                            | )                      | 677                             |                        |
|           Accountspayable                                                |                              | (19,180                         | )                      | 28,809                          |                        | 7,972                           |                        |
|           Accruedliabilities                                             |                              | 1,023                           |                        | 7,080                           |                        | 10,187                          |                        |
|           Accruedwages and related costs                                 |                              | (3,417                          | )                      | (487                            | )                      | 4,431                           |                        |
|           Deferreditems                                                  |                              | 827                             |                        | —                         |                        | (312                            | )                      |
|           Federaland state tax payable                                   |                              | 6,470                           |                        | 8,968                           |                        | 3,442                           |                        |
|                                                                                                                            |
|           Netcash provided by operating activities                       |                              | 57,558                          |                        | 36,211                          |                        | 42,280                          |                        |
|                                                                                                                  |                              |                                 |                        |                                 |                        |                                 |                        |
| Cash flows from investingactivities:                                                                                       |                              |                                 |                        |                                 |                        |                                 |                        |
|      Purchase ofproperty and equipment, net                                                       |                              | (45,134                         | )                      | (19,375                         | )                      | (15,468                         | )                      |
|      Payments foracquisitions, net of cash                                                        |                              | (28,180                         | )                      | (4,250                          | )                      | —                         |                        |
|      Net (decrease)increase in short-term investments                                             |                              | (6,672                          | )                      | 614                             |                        | (960                            | )                      |
|      Net decrease(increase) in long-term investments                                              |                              | 260                             |                        | (5                              | )                      | 6                               |                        |
|      Unrealized gain oninvestments                                                                |                              | 20                              |                        | 138                             |                        | 171                             |                        |
|                                                                                                                            |
|       Net cash usedin investing activities                                                   |                              | (79,706                         | )                      | (22,878                         | )                      | (16,251                         | )                      |
|                                                                                                                  |                              |                                 |                        |                                 |                        |                                 |                        |
| Cash flows from financingactivities:                                                                                       |                              |                                 |                        |                                 |                        |                                 |                        |
|      Issuance of commonstock                                                                      |                              | 12,814                          |                        | 10,445                          |                        | 6,279                           |                        |
|      Reacquisition ofcommon stock                                                                 |                              | (16,482                         | )                      | (3,451                          | )                      | (1,082                          | )                      |
|      Proceeds fromlong-term debt                                                                  |                              | 19,457                          |                        | 15,133                          |                        | 2,330                           |                        |
|      Repayment oflong-term debt                                                                   |                              | (4,383                          | )                      | (2,530                          | )                      | (8,388                          | )                      |
|      Note receivablerelated parties                                                               |                              | 10,599                          |                        | 1,896                           |                        | —                         |                        |
|      Loans todiscontinued operations (Note 1)                                                     |                              | (7,037                          | )                      | (26,308                         | )                      | (25,244                         | )                      |
|                                                                                                                            |
|      Net cash providedby (used in) financing activities                                           |                              | 14,968                          |                        | (4,815                          | )                      | (26,105                         | )                      |
|                                                                                                                  |                              |                                 |                        |                                 |                        |                                 |                        |
| Net change in cash andcash equivalents                                                                                     |                              | (7,180                          | )                      | 8,518                           |                        | (76                             | )                      |
|                                                                                                                  |                              |                                 |                        |                                 |                        |                                 |                        |
| Effect of exchange rate oncash                                                                                             |                              | (424                            | )                      | (390                            | )                      | 95                              |                        |
|                                                                                                                  |                              |                                 |                        |                                 |                        |                                 |                        |
| Net cash provided by (usedin) discontinued operations                                                                      |                              | 908                             |                        | 2,850                           |                        | (491                            | )                      |
|                                                                                                                  |                              |                                 |                        |                                 |                        |                                 |                        |
| Cash and cash equivalentsat beginning of period                                                                            |                              | 24,330                          |                        | 13,352                          |                        | 13,824                          |                        |
|                                                                                                                  |                              |                                 |                        |                                 |                        |                                 |                        |
| Cash and cash equivalentsat end of period                                                                                  |                              | $17,634                         |                        | $24,330                         |                        | $13,352                         |                        |

*See accompanying Notesto Consolidated Financial Statements*

**38**

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**NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS**

**Note 1.  MERGER AGREEMENT AND DISCONTINUED OPERATIONS**

On June 14, 2002 weentered into an agreement and plan of merger with Cardinal HealthInc. (Cardinal Health) and its wholly owned subsidiary, MudhenMerger Corp. Under the terms and subject to the conditions of theagreement, we will become a wholly owned subsidiary of CardinalHealth. The merger agreement provides for Syncor stockholders toreceive 0.52 Cardinal Health shares for each Syncor share theyown.  Pursuant to certain terms and conditions in the mergeragreement, if the agreement is terminated we could be required topay Cardinal Health termination fees ranging from $4,000,000 to$24,125,000. The obligation to pay, and the amount of such fees arebased upon the circumstances relating to the termination.  Thetransaction is expected to be completed by the end of 2002, subjectto the satisfaction of customary conditions, including Syncorstockholder approval.  Syncor’s stockholder meeting isexpected to take place in the fall of 2002.

We also announced on June14, 2002 our decision to discontinue certain operations includingour medical imaging business - CMI (a separate segment forreporting purposes), certain overseas locations and thebrachytherapy seeds manufacturing operations of the RadiopharmacyServices Business. On June 14, 2002, we recorded net after-taxcharges in discontinued operations for severance, impairment ofassets held for sale and other charges totaling $24.9 million or$0.93 per fully diluted share. Included in discontinued operationswas a net after-tax charge of $11.2 million or $0.42 per fullydiluted share for CMI.  Of this total, $1.5 million related toour change in estimates for contractual allowances, $4.2 millionrelated to the change in estimated reserves for bad debt, $1.1million related to a write-down of existing costs of a billingsystem that would no longer be utilized and $4.4 million related toseverance expenses.  The adjustments to contractual allowancesand bad debt reserves were made after extensive reviews of ourbilling and collection processes completed in June 2002. Includedin these reviews were recommendations from outside consultants forenhancements to our reporting systems and methodology forestimating and recording our contractual allowances and bad debtreserves. Based upon these refinements and improvements weidentified the need for an adjustment to contractual allowances andbad debt reserves. The timing of the changes to these estimates forcontractual allowances and bad debt reserves was not related to thedecision to discontinue the operations of CMI.  The chargesrelating to our overseas business totaled $13.2 million, net aftertaxes. Of this amount, $1.0 million related to severance chargeswith the remaining $12.2 million related to asset impairmentcharges.  The $0.5 million of charges related to the seedsmanufacturing facilities was for the discontinuance of seedsproduction. 

We are marketing each ofthe discontinued operations for sale with the exception of theseeds business, which has been closed, and an investment in Brazil,which has been terminated.  We are considering offers for thesale of our imaging business in the U.S. and Puerto Rico (seeSubsequent Events information in note 14).  We are also invarious stages of discussions with U.S. and local foreign buyersfor the sale of our discontinued overseas operations.  Weexpect to complete these transactions within one year from our June14, 2002 announcement to discontinue these operations as prescribedby the Financial Accounting Standards Board(FASB), in SFAS No. 144, *Accountingfor the Impairment or Disposal of Long-LivedAssets*.  We recorded severance related accrualsboth in our overseas business and CMI in accordance with theprovisions of the FASB, Emerging Issues TaskForce (EITF) No. 94-3 *Liability Recognition for CertainEmployee Termination Benefits and Other Costs to Exit an Activity(including Certain Costs Incurred in a Restructuring)*. We willdisclose the changes in the severance related accruals inaccordance with EITF No. 94-3 in future filings.

Our June 14, 2002announcement also included a special charge to earnings of $5.0million ($3.1 million net of tax or $0.11 per fully diluted share).Of this amount $2.5 million related to severance and informationtechnology reorganization costs and $0.6 million related toexpenses arising from the transaction with CardinalHealth.

The merger agreement forthe Cardinal Health transaction requires the filing of a proxystatement which will incorporate by reference the Forms 10-Q forthe quarters ended June 30, 2002 and March 31, 2002 and the Form10-K for the year ended December 31, 2001,ineach case as amended on Form 10-K/A-1 or Form 10-Q/A-1, asapplicable.  Since the Form 10-Q for the quarter endedJune 30, 2002 reflected the discontinued operations announced by uson June 14, 2002, the Form 10-K as originally filed by us on April1, 2002 needs to be restated for the discontinued operations.Accordingly, we have filed this Form 10-K/A-1 for the year endedDecember 31, 2001, to reflect discontinued operations for allperiods presented.

The following representsincome statement data for the discontinued operations:

**39**

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**Income statementdata:**
|                                    |                                                  | **ForThe Years Ended December 31,**                                                          |
|------------------------------------|--------------------------------------------------|----------------------------------------------------------------------------------------------|
|                                    |                                                  | **              2001** |  | **2000 ** |  | **1999** |
|                                    |                                                  |                                                                                              |
| Revenues                           |                                                  | $176,582                                                                                |       | $111,842 |       | $63,153 |
| Costs andexpenses                  |          | 169,659                                                                                 |  | 107,935 |  | 60,764 |
|                                    |                                                  |                                                                                              |  |  |  |  |
| Operatingincome                    |                                                  | 6,923                                                                                        |  | 3,907 |  | 2,389 |
| Income taxexpense                  |                                                  | 3,566                                                                                        |  | 2,409 |  | 1,340 |
|                                    |                                                  |                                                                                              |  |  |  |  |
| Income from discontinuedoperations |                                                  | $    3,357                                                               |  | $    1,498 |  | $  1,049 |

The following tablesummarizes the major assets and liabilities for discontinuedoperations. The inter-company payables and stockholders’equity (deficit) are eliminated in consolidation and therefore donot appear on the face of the balance sheet. The discontinuedbalance sheet is as follows:
|                                                       |                                            | **December31, 2001** |                                                              | **December31, 2000** |   |
|-------------------------------------------------------|--------------------------------------------|----------------------|--------------------------------------------------------------|----------------------|---|
|                                                       |                                            |                      |            |                      |   |
| Current assets                                        |                                            | $  74,450  |                                                              | $  47,384  |   |
| Property andequipment                                 |         | 90,552               |                                                              | 63,075               |   |
| Intangibles andgoodwill                               |                                            | 118,152              |                                                              | 100,190              |   |
|                                                       |                                            |                      |                                                              |                      |   |
| Total assets                                          |                                            | $283,154             |                                                              | $210,649             |   |
|                                                       |                                            |                      |                                                              |                      |   |
| Currentliabilities                                    |                                            | $  30,088  |                                                              | $  28,109  |   |
| Long-term debt                                        |                                            | 175,531              |                                                              | 119,487              |   |
| Otherliabilities                                      |                   | 8,463                |                                                              | 3,459                |   |
| Deferred taxes                                        |                                            | 1,553                |                                                              | 1,059                |   |
| Inter-companypayables                                 |                                            | 68,381               |                                                              | 61,344               |   |
| Stockholders’deficit                            |                                            | (862                 | )                                                            | (2,809               | ) |
|                                                       |                                            |                      |                                                              |                      |   |
| Total liabilitiesand stockholders’ deficit |                                            | $283,154             |                                                              | $210,649             |   |

Included in the December31, 2001 long-term debt are borrowings from bank financings of$143.3 million with the remainder primarily capital leasesgenerally with five-year terms.  The bank borrowings areunsecured and payable in a lump sum on May 1, 2006 with a floatinginterest rate of Libor plus 1.625% or prime rate.

Of the $7.0 million, $26.3million and $25.2 million of loans to discontinued operationsincluded in the statement of cash flows for the years endedDecember 31, 2001, 2000 and 1999, respectively, approximately $0million, $23.2 million and $19.1 million represent loans to CMI(our medical imaging business) for operating cash purposes for eachrespective period.  In addition, approximately $6.4 million,$2.2 million and $5.7 million represent loans made to ourdiscontinued overseas business for operating cash and acquisitionpurposes during the years ended December 31, 2001, 2000 and 1999,respectively. Approximately $0.6 million, $0.9 million and $0.4million represent loans to our discontinued seeds manufacturingbusiness for operating cash purposes during the years endedDecember 31, 2001, 2000 and, 1999, respectively.  These loansare comprised of short-term inter-company loans.  Theseinter-company loans are eliminated in consolidation, except for thestatement of cash flows, which reflects the lending activitiesbetween the continuing and discontinued operations in order toprovide disclosure of such activity.

The remaining notes to theconsolidated financial statements have been restated (except forNote 3 relating to acquisitions) to only address/discloseinformation relevant to the continuing operations.

**40**

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**Note 2.  SUMMARYOF CRITICAL ACCOUNTING ESTIMATES AND SIGNIFICANT ACCOUNTINGPOLICIES**

**Ourcritical accounting estimates and critical accounting policies areas follows:**

**RevenueRecognition.**We recognize our revenueprimarily from two sources: (i) product revenue, which includessales from our radiopharmacies, and (ii) service revenue, primarilyfrom our international imaging businesses and our cardiologymanagement services.  Management makes few estimates orjudgments in the recording of revenues and as such few if anychanges are expected in the recording of revenues.  Revenuesare booked based upon delivery of product to our customers. Since most of our products are compounded with radioactivematerials, most have a very short useful life of approximately sixhours.  Due to this short life and the fact that most itemsare ordered for specific patients based on a doctor’sprescription, we receive very few returns of product.  Thesereturns are generally handled in the same month so future revenuesare not impacted and no significant allowances for returns arenecessary.  Service revenues are booked at the time ofservice.  Allowances are made for contracts and bad debts inthe same month as the service revenue is booked.  Servicerevenues constitute less than 3% of our overall netrevenues.

Included in our sales forthe year ended December 31, 2001 and 2000, was Cardiolite sales ofapproximately $319.1 million and $282.0 million,respectively.  Cardiolite sales represented approximately53.4% and 54.5% of our total sales from continuing operationsduring each respective annual period.

**Estimating Valuation Allowances for DoubtfulAccounts***.*Thepreparation of financial statements requires our management to makeestimates and assumptions on the collectibility of our accountsreceivable. Management specifically analyzes historical bad debts,customer concentrations, customer credit-worthiness, currenteconomic trends, aging of accounts and changes in payment termswhen evaluating the adequacy of the allowance for doubtfulaccounts. Any changes in these estimates or assumptions could causematerial differences in recorded allowances.

**Valuation of Long-LivedAssets and Goodwill*.***  Weassess the impairment of identifiable intangibles, long-livedassets and related goodwill and enterprise level goodwill wheneverevents or changes in circumstances indicate that the carrying valuemay not be recoverable. Factors we consider important which couldtrigger an impairment review include the following:
|            | •     | significantunderperformance relative to expected historical or projectedfuture operating results;           |
|--------------------------------------------------------------|--------------------------------|-------------------------------------------------------------------------------------------------------------|
|                                                         |                                |                                                                                                             |
|                                                         | •     | significant changes in themanner of our use of the acquired assets or the strategy for ouroverall business; |
|                                                         |                                |                                                                                                             |
|                                                         | •     | significant negativeindustry or economic trends;                                                            |
|                                                         |                                |                                                                                                             |
|                                                         | •     | our market capitalizationrelative to net book value.                                                        |
|                                                              |                                |                                                                                                             |

When wedetermine that the carrying value of intangibles, long-lived assetsand related goodwill and enterprise level goodwill may not berecoverable based upon the existence of one or more of the aboveindicators of impairment, we measure any impairment based on aprojected undiscounted cash flow method using a discount ratedetermined by our management to be commensurate with the riskinherent in our current business model. Net intangible assets,long-lived assets, and goodwill amounted to $130.7 million asof December 31, 2001.

ThroughDecember 31, 2001, the cost in excess of net assets of acquiredbusinesses is being amortized on a straight-line basis over periodsof 15 to 40 years.

In the firstquarter of 2002, Statement of Financial Accounting Standards(“SFAS”) No. 142, “Goodwill and Other IntangibleAssets” was effective and as a result, we ceased amortizingapproximately $30.5 million of goodwill. We had recordedapproximately $1.2 million, $1.0 million, and $1.9 million ofgoodwill amortization during 2001, 2000 and 1999,respectively.  We would have recorded approximately$0.9 million of goodwill amortization during 2002. Under theprovisions of the Statement, we did not record amortization relatedto any post-June 30, 2001 acquisitions. Such amortization wouldhave amounted to $0.2 million. In lieu of amortization, we arerequired to perform an initial impairment review of our recordedintangibles and goodwill in 2002 and an annual impairment reviewthereafter. We completed our initial review during the first andsecond quarter of 2002, there was no adjustment to intangibleassets recorded balances or estimated useful lives, and noadjustments to goodwill. 

**41**

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**Summary of SignificantAccounting Policies:**

**Principles ofConsolidation:** The consolidated financialstatements include the assets, liabilities and operations of theCompany and its subsidiaries. All significant inter-companyaccounts and transactions have been eliminated in consolidation,except for borrowings between the continuing and discontinuedoperations for purposes of the statements of cash flowsonly.

**Cash and CashEquivalents and Short-Term Investments:** TheCompany considers all highly liquid investments purchased with anoriginal maturity of three months or less to be cash equivalents.Short-term investments consist principally of time deposits andtax-exempt municipal securities and are carried at cost, whichapproximates market value.

**FinancialInstruments:** The carrying value of financialinstruments such as cash and cash equivalents, trade receivables,payables and floating rate short and long-term debt, approximatefair value.

**Inventory:**  Inventories, primarily consisting of purchasedproducts, are stated at the lower of cost (first-in, first-out) ormarket.

**Property andEquipment:**  Property and equipment are stated at cost anddepreciated or amortized on a straight-line basis over estimateduseful lives ranging from two to fifteen years.

**Self Insurance:** The Company historicallyhas purchased insurance in excess of self-insured retentions ordeductibles for losses and liabilities related to vehicle claims,medical claims and general product liability claims. Losses accruedunder self-insured and deductible plans are based upon theCompany’s estimates of aggregated liability claims incurredusing certain actuarial assumptions followed in the insuranceindustry and the Company's own experience.

**MarketableInvestment Securities: **Marketable investmentsecurities consist primarily of corporate debt and United Statesgovernment obligations. The Company classifies debt and marketableequity securities in one of three categories: trading,available-for-sale or held-to-maturity. Trading securities arebought and held principally for the purpose of selling them in thenear term. Held-to-maturity securities are those securities thatthe Company has the ability and intent to hold until maturity. Allother securities not included in trading or held-to-maturity areclassified as available-for-sale.

Held-to-maturitysecurities are recorded at amortized cost, adjusted for theamortization or accretion of premiums or discounts. Unrealizedholding gains and losses on trading securities are included inearnings. Unrealized holding gains and losses, net of the relatedtax effect, on available-for-sale securities are excluded fromearnings and are reported as a component of accumulated othercomprehensive income until realized.

**Foreign CurrencyTranslation:**  Assets and liabilities of foreign operations aretranslated into U.S. dollars based upon the prevailing exchangerates in effect at the balance sheet date. Foreign exchange gainsand losses resulting from these translations are included as acomponent of accumulated other comprehensive income. Actual gainsor losses incurred on currency transactions in other than thecountry's functional currency are included in net incomecurrently.  During 2001, the Company’s fixed assetsdecreased by $2.1 million due to currency translation adjustmentswhen we corrected our policy of using historical exchange rates tocurrent exchanges rates.  This change did not have an earningsimpact but impacted the valuation of fixed assets of ourInternational business and accumulated other comprehensive incomeon the balance sheet.

**StockOptions:** The Company measures stock-based compensation using the intrinsicvalue method, which assumes that options granted at market price atthe date of grant have no intrinsic value. Proforma net income andearnings per share are presented in Note 10 as if the fair valuemethod had been applied.

**IncomeTaxes:**Income taxes are accounted for under the asset andliability method. Deferred tax assets and liabilities arerecognized for the future tax consequences attributable todifferences between the financial statement carrying amounts ofexisting assets and liabilities and their respective tax bases.Deferred tax assets and liabilities are measured using enacted taxrates expected to apply to taxable income in the years in whichthose temporary differences are expected to be recovered orsettled. The effect on deferred tax assets and liabilities of achange in tax rates is recognized in income in the period thatincludes the enactment date.

**Use ofEstimates:**  The Company’s management has made a number ofestimates and assumptions relating to the reporting of assets andliabilities, the reporting of sales and expenses and the disclosureof contingent assets and liabilities to prepare these financialstatements in conformity with accounting principles generallyaccepted in the United States of America. Actual results coulddiffer from those estimates.

**Reclassifications:**  Certain items in the prior years’consolidated financial statements have been reclassified to conformto the current year's presentation.

**42**

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**NewAccounting Standards:** In July 2001, the FinancialAccounting Standards Board (FASB) issued Statement of AccountingStandards SFAS No. 141, *Business Combinations* and SFAS No.142 *Goodwill and Other Intangible Assets*.  SFASrequires that the purchase method of accounting be used for allbusiness combinations completed after June 30, 2001, clarifies therecognition of intangible assets separately from goodwill andrequires that unallocated negative goodwill be written offimmediately as an extraordinary gain. SFAS No. 142, which waseffective for fiscal years beginning after December 15, 2001,requires that ratable amortization of goodwill be replaced withperiodic tests of goodwill impairment and that intangible assets,other than goodwill, which have determinable useful lives, beamortized over their useful lives. The Company has adopted theseaccounting standards effective January 1, 2002 and has determinedin the transitional impairment analysis, that based upon the valueof the proposed merger agreement and anticipated sales values ofdiscontinued business assets, that there has been no impairment ofrecorded goodwill. There were no adjustments to identifiableintangible assets’ useful lives or recorded balances as aresult of the adoption of SFAS No.142. We will perform anannual impairment analysis of goodwill as required by SFAS No.142.

In August2001, the Financial Accounting Standards Board (FASB) issued SFASNo. 144, *Accounting for the Impairment or Disposal of Long-LivedAssets* (SFAS No. 144), which supersedes both FASB Statement No.121, *Accounting for the Impairment of Long-Lived Assets and forLong-Lived Assets to Be Disposed Of* (SFAS No. 121) and theaccounting and reporting provisions of APB Opinion No. 30,*Reporting the Results of Operations—Reporting the Effectsof Disposal of a Segment of a Business, and Extraordinary, Unusualand Infrequently Occurring Events and Transactions* (Opinion30), for the disposal of a segment of a business (as previouslydefined in that Opinion).  SFAS No. 144 retains thefundamental provisions in SFAS No. 121 for recognizing andmeasuring impairment losses on long-lived assets held for use andlong-lived assets to be disposed of by sale, while also resolvingsignificant implementation issues associated with SFAS No.121.  SFAS No. 144 retains the basic provisions of Opinion 30on how to present discontinued operations in the income statementbut broadens that presentation to include a component of an entity(rather than a segment of a business).  Unlike SFAS No. 121,an impairment assessment under SFAS No. 144 will never result in awrite-down of goodwill.  Rather, goodwill is evaluated forimpairment under SFAS No. 142, *Goodwill and Other IntangibleAssets.*

The Company is required toadopt SFAS No. 144 no later than the year beginning after December15, 2001.  Accordingly, the Company adopted SFAS No. 144 inthe first quarter of 2002.  Management does not expect theadoption of SFAS No. 144 for long-lived assets held for use to havea material impact on the Company’s financial statementsbecause the impairment assessment under SFAS No. 144 is largelyunchanged from SFAS No. 121.  The provisions of SFAS No. 144for assets held for sale or other disposal generally are requiredto be applied prospectively after the adoption date to newlyinitiated disposal activities.  The adoption of SFAS No. 144impacted us as certain disposal groups qualified as discontinuedoperations and are presented accordingly in the accompanyingcondensed consolidated financial statements (Note 1).

On August 16, 2001, theFASB issued SFAS No. 143, *Accounting for Asset RetirementObligations*.  The statement requires entities to recordthe fair value of a liability for legal obligations associated withthe retirement obligations of tangible long-lived assets in theperiod in which it is incurred.  When the liability isinitially recorded, the entity increases the carrying amount of therelated long-lived asset.  Over time, accretion of theliability is recognized each period, and the capitalized cost isdepreciated over the useful life of the related asset.  Uponsettlement of the liability an entity either settles the obligationfor its recorded amount or incurs a gain or loss uponsettlement.  The standard is effective for fiscal yearsbeginning after June 15, 2002, with earlier applicationencouraged.  We do not expect that the adoption of SFAS No.143 will have a material impact on the Company's results fromoperations.

In April 2002, the FASBissued SFAS No. 145 *Rescission of FASB Statements No. 4, 44 and64, Amendment of FASB Statement No. 13, and TechnicalCorrections* which requires that the extinguishment of debt notbe considered an extraordinary item under Opinion 30 *Reportingthe Results of Operations - Reporting the Effects of Disposal of aSegment of Business, and Extraordinary, Unusual and InfrequentlyOccurring Events and Transactions* unless the debtextinguishment meets the unusual in nature and infrequency ofoccurrence criteria in Opinion 30. SFAS No. 145 is effective forfiscal years beginning after May 15, 2002 and upon adoption,companies must reclassify prior period items that do not meet theextraordinary item classification criteria in Opinion 30. Theadoption of SFAS No. 145 is not expected to have a material impacton our financial position and results of operations.

On July 30, 2002, FASBissued Statement of Financial Accounting Standards(“SFAS”) No. 146, *Accounting for Costs Associatedwith Exit or Disposal Activities*.  SFAS No. 146 nullifiesEITF Issue No. 94-3, *Liability Recognition for Certain EmployeeTermination Benefits and Other Costs to Exit an Activity (includingCertain Costs Incurred in a Restructuring)*.  It requiresthat a liability be recognized for those costs only when theliability is incurred, that is, when it meets the definition of aliability in the FASB’s conceptual framework.  SFAS No.146 also establishes fair value as the objective for initialmeasurement of liabilities related to exit or disposalactivities.  SFAS No.146 is effective for exit or disposalactivities that are initiated after December 31, 2002, with earlieradoption encouraged.  We do not expect that the adoption ofSFAS No. 146 will have a material impact on our financial positionor results from operations.

**43**

----

**Note 3. ACQUISITIONS**

The summary below ofacquisitions that we made in 2001 and 2000 and the tables thatfollow reflect acquisitions made by our continuing operations anddiscontinued operations.  We have not made any amendments tothis note to reflect the discontinuation of our CMI operations andcertain overseas locations announced on June 14, 2002.

During 2000and 2001, the Company made several acquisitions.   Our2000 acquisitions were made primarily by CMI, our U.S. medicalimaging subsidiary.  During 2001, significant acquisitionswere made by Syncor Overseas Ltd., our International subsidiary, byour US Pharmacy business, and by CMI.

**2001Acquisitions:**

DuringJanuary 2001, we acquired three imaging center sites in Californiafor a purchase price of $13.4 million.

In March2001, we acquired a Gamma knife venture in Brazil for a purchaseprice of $2.0 million and a distributor of radiopharmaceuticals inNew Zealand for a purchase price of $0.3 million plus theassumption of $0.2 million of debt.

During May2001, we entered into a management service agreement with anoncology clinic in Brazil for an investment of $1.8million.

During June2001, we acquired a distributor and manufacturer of diagnosticradiopharmaceuticals in Australia for an acquisition price of $0.7million.

During July2001, we acquired a manufacturer of radiation detection andmeasurement equipment in Ohio for an acquisition price of $10.8million.  We also acquired two imaging centers in Texas for$4.3 million plus the assumption of $3.6 million of debt. Inaddition, we acquired an imaging center in Florida for a purchaseprice of  $5.1 million plus the assumption of $2.0 million ofdebt.

DuringSeptember 2001, we acquired a cardiovascular service company inNorth Carolina for an acquisition price of $13.7 million plus theassumption of $0.2 million of debt. In addition, we acquired aradiology and cardiology distribution company in Belgium for anacquisition price of $2.0 million.

DuringOctober 2001, we acquired a nuclear services company for anacquisition price of $0.8 million.

**2000Acquisitions:**

During March2000, we acquired four imaging center sites.  The first wasthe acquisition of three sites previously managed by CMI for aprice of $2.1 million plus the assumption of $2.7 million indebt.  The second was a site acquisition in Boynton Beach, FLfor a purchase price of $0.2 million plus the assumption of $1.3million in debt.

During April2000, we acquired the remaining interest in seven managed imagingcenter sites for a total acquisition price of $8.7 million plus theassumption of $1.0 million of debt.

DuringSeptember 2000, we acquired thirteen imaging centers located inCalifornia and Florida for a total acquisition price of $31 millionplus the assumption of $1.3 million in debt.  In addition, theCompany acquired certain PET production facilities for anacquisition price of $0.9 million plus the assumption of $5.8million in debt.

DuringNovember 2000, we acquired an imaging center and a catheterizationlaboratory in Trinidad and Tobago for an acquisition price of $2.0million.  In addition, we acquired a nuclear medicine businessin Puerto Rico for $0.75 million.  In December 2000, weacquired an imaging center in Phoenix, AZ for an acquisition priceof $4.7 million plus the assumption of $4.2 million indebt.

**44**

----

Thefollowing table represents the allocation of purchase price foracquisitions in 2001 and 2000:
|                         |                                                              | **Allocation of Acquisitions           PurchasePrice            ** |                                                              |
|-------------------------|--------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|
|                         |                                                              | **2001**                                                                                                                                                                              |                                                              | **2000** |   |   |
|                         |                                                         |
| AccountsReceivable      |            | $8,510                                                                                                                                                                                |            | $6,822 |  |   |
| Goodwill                |                                                              | 37,762                                                                                                                                                                                |                                                              | 35,608 |  |   |
| Inventory               |                                                              | 6,374                                                                                                                                                                                 |                                                              | - |  |   |
| Property& Equipment |                                                              | 10,854                                                                                                                                                                                |                                                              | 32,354 |  |   |
| OtherLiabilities        |                                                              | (2,823                                                                                                                                                                                | )                                                            | (7,280 | ) |   |
|                         |                                                         |
|                         |                                                              |                                                                                                                                                                                       |                                                              |  |  |   |
| Sub-Total               |                                                              | 60,677                                                                                                                                                                                |                                                              | 67,504 |  |   |
|                         |                                                              |                                                                                                                                                                                       |                                                              |  |  |   |
| LessAssumption of Debt  |                                                              | (5,898                                                                                                                                                                                | )                                                            | (16,006 | ) |   |
|                         |                                                         |
| Total                   |                                                              | $54,779                                                                                                                                                                               |                                                              | $51,498 |  |   |
|                         |                                                         |

The Companyaccounted for these transactions as purchases and the purchaseprices were allocated as indicated above.  Goodwill for theseacquisitions is being amortized from 15 to 20 years period. The results of operations related to the above 2001 and 2000transactions are included in the Company’s consolidatedfinancial statements from the effective acquisitiondates.

Thefollowing unaudited pro forma information presents a summary of ourconsolidated results of operations for 2001 and 2000 for continuingoperations and for operations that we announced on June 14, 2002that we are discontinuing, as if the acquisitions had occurred atthe beginning of those years:
| **(IN THOUSANDS, EXCEPT PER SHARE)** | **          ** | **YEAR END DECEMBER 31, 2001**            | **          ** | **YEAR END DECEMBER 31, 2000**            |
|--------------------------------------|------------------------------------------------------------------|-------------------------------------------|------------------------------------------------------------------|-------------------------------------------|
|                                      |
|                            |                                                                  |                                           |                                                                  |                                           |
| Sales                                |                                                                  | $810,543                                  |                                                                  | $679,093                                  |
| Netearnings                          |                                                                  | $  39,428                       |                                                                  | $  30,755                       |
| Net earningsper diluted share        |                                                                  | $      1.46 |                                                                  | $      1.15 |

  These unaudited proforma results havebeen prepared for comparative purposes only and do not purport tobe indicative of the results of operations that would have occurredor the future results of operations of the consolidatedentities.

**45**

----

**Note 4.  PROPERTYAND EQUIPMENT, NET**

The major classes ofproperty were as follows:
|                                               | **          ** | **DECEMBER 31,**   | **          ** | **DECEMBER 31,**   |   |
|-----------------------------------------------|------------------------------------------------------------------|--------------------|------------------------------------------------------------------|--------------------|---|
| **(INTHOUSANDS)**                             |                                                                  | **2001**           |                                                                  | **2000**           |   |
|                                               |
|                                               |                                                                  |                    |                                                                  |                    |   |
| Land andbuildings                             |                                                                  | $  6,206 |                                                                  | $  3,333 |   |
| Furniture andequipment                        |                                                                  | 107,485            |                                                                  | 77,341             |   |
| Leaseholdimprovements                         |                                                                  | 28,118             |                                                                  | 16,409             |   |
| Construction inprogress                       |                                                                  | 8,740              |                                                                  | 5,204              |   |
|                                               |
|                                               |                                                                  |                    |                                                                  |                    |   |
|                                               |                                                                  | 150,549            |                                                                  | 102,287            |   |
|                                               |
| Less accumulateddepreciation and amortization |                                                                  | (63,737            | )                                                                | (51,076            | ) |
|                                               |                                                                  |                    |                                                                  |                    |   |
|                                               |
|                                               |                                                                  | $86,812            |                                                                  | $51,211            |   |
|                                               |

**Note 5. MARKETABLE INVESTMENT SECURITIES**

Marketable investmentsecurities consist of:
|                                                      | **                ** | **DECEMBER31,**        | **               ** | **DECEMBER31,**        |
|------------------------------------------------------|------------------------------------------------------------------------------------------------------|------------------------|------------------------------------------------------------------------------------------------|------------------------|
| **(INTHOUSANDS)**                                    |                                                                                                      | **2001**               |                                                                                                | **2000**               |
|                                                      |
| Available-for-sale, at fair value, net of tax effect |                                                                                                      | $   506 |                                                                                                | $   690 |
| Held-to-maturity, atamortized cost                   |                                                                                                      | $   500 |                                                                                                | $   500 |
|                                                      |
|                                                      |                                                                                                      |                        |                                                                                                |                        |
|                                                      |                                                                                                      | $1,006                 |                                                                                                | $1,190                 |
|                                                      |

The amortized cost, grossunrealized holding gains and losses and fair value foravailable-for-sale and held-to-maturity securities by majorsecurity type at December 31, 2001 and 2000 were asfollows:

**46**

----

|                          |                                    | **2001UNREALIZED GAINS (LOSSES)** |
|--------------------------|------------------------------------|-----------------------------------|
| **(INTHOUSANDS)**        | **     ** | **AMORTIZED COST**                | **     ** | **HOLDING GAINS** | **     ** | **HOLDING LOSSES** | **     ** | **FAIR VALUE** |
|                          |
| Available-for-sale:      |                                    |                                   |  |  |  |  |  |  |
| Corporate debtsecurities |                                    | $  493                  |  | $13 |  | $— |  | $   506 |
|                          |
| Held-to-maturity:        |                                    |                                   |  |  |  |  |  |  |
| U.S. Treasurysecurities  |                                    | 500                               |  | — |  | — |  | 500 |
|                          |
|                          |                                    | $  993                  |  | $13 |  | $— |  | $1,006 |
|                          |
|                |                                    |                                   |  |  |  |  |  |  |
|                          |                                    | **2000UNREALIZED GAINS (LOSSES)** |
| **(IN THOUSANDS)**       |                                    | **AMORTIZED COST**                |  | **HOLDING GAINS** |  | **HOLDING LOSSES** |  | **FAIR VALUE** |
|                          |
| Available-for-sale:      |                                    |                                   |  |  |  |  |  |  |
| Corporate debtsecurities |                                    | $   697            |  | $— |  | $ (7 | ) | $   690 |
|                          |
| Held-to-maturity:        |                                    |                                   |  |  |  |  |  |  |
| U.S. Treasurysecurities  |                                    | 500                               |  | — |  | — |  | 500 |
|                          |
|                          |                                    | $1,197                            |  | — |  | $ (7 | ) | $1,190 |
|                          |
|                          |

The unrealized holdinglosses on held-to-maturity securities have not been recognized inthe accompanying consolidated financial statements.

Maturities ofinvestment securities classified as available-for-sale andheld-to-maturity at December 31, 2001 and 2000 were asfollows:
|                                       |                                    | **2001**                   |                                                                        | **2000**                   |
|---------------------------------------|------------------------------------|----------------------------|------------------------------------------------------------------------|----------------------------|
| **(IN THOUSANDS)**                    | **     ** | **AMORTIZED COST**         | **           ** | **FAIR VALUE**             | **           ** | **AMORTIZED COST** | **           ** | **FAIR VALUE** |
|                                       |
| Available-for-sale:                   |                                    |                            |                                                                        |                            |  |  |  |  |
| Due after one year throughfive years  |                                    | $493                       |                                                                        | $506                       |  | $499 |  | $499 |
| Due after five yearsthrough ten years |                                    | $    0 |                                                                        | $    0 |  | $198 |  | $191 |
|                                       |
|                                       |                                    |                            |                                                                        |                            |  |  |  |  |
| Held-to-maturity:                     |                                    |                            |                                                                        |                            |  |  |  |  |
| Due within oneyear                    |                                    | $500                       |                                                                        | $500                       |  | $500 |  | $500 |
|                                       |

**47**

----

**Note 6.  LINE OFCREDIT**

At December 31, 2001,the Company had an unsecured revolving line of credit forshort-term borrowings aggregating $200,000,000. The line of creditwas increased from $150,000,000 to $200,000,000 effective May 10,2001. The terms of this revolving credit line include two interestrate borrowing options, the Eurodollar rate plus an applicablemargin or the bank's Prime rate (4.75 percent at December 31,2001). At December 31, 2001, the availability of the line of creditwas reduced by $2.0 million as a result of outstanding standbyletters of credit resulting in available credit of $28.5 million.To maintain this line of credit, the Company is required to pay aquarterly commitment fee of 1/4 of one percent per annum on theunused portion.

The line of creditagreement specifies that certain covenants be maintained, includinglimitations on investments and acquisitions, new borrowings andissuance of new stock. Certain financial ratios also need to bemaintained under this agreement, including minimum Net Worth,EBITDA ratio and Fixed Charge Coverage ratio. At December 31, 2001,the Company was in compliance with all debt covenants under thecredit line agreement.

**Note 7.  LONG-TERMDEBT**

The Company's long-termdebt was as follows:

**48**

----

| ****                                                                                                                                      | **      ** | **DECEMBER 31,**   | **      ** | **DECEMBER 31,**                   |
|-------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|--------------------|------------------------------------------|------------------------------------|
| **(INTHOUSANDS)**                                                                                                                         |                                          | **2001**           |                                          | **2000**                           |
|                                                                                                                                           |
|                                                                                                                                 |                                          |                    |                                          |                                    |
| Notes payable,unsecured, payable in installments through 2015,                                                                            |                                          |                    |                                          |                                    |
|      with effective interest ratesranging from 2.15% to 9%                                                       |                                          | $  2,482 |                                          | $     162 |
|                                                                                                                                           |
|                                                                                                                                 |                                          |                    |                                          |                                    |
| Note payable,unsecured, payable in installments through 2001,                                                                             |                                          |                    |                                          |                                    |
|      with a floating interest rateof either the lower of prime rate or                                           |                                          |                    |                                          |                                    |
|      LIBOR plus .75%, 6.57% atDecember 31, 2000                                                                  |                                          | 0                  |                                          | 1,685                              |
|                                                                                                                                           |
|                                                                                                                                 |                                          |                    |                                          |                                    |
| Notes payable,secured, payable in installments through 2003,                                                                              |                                          |                    |                                          |                                    |
|      with a non-interest bearingrate, net of unamortized discount                                                |                                          |                    |                                          |                                    |
|      at 8.38% to 9.58% of $11 and$47 at December 31, 2001                                                        |                                          |                    |                                          |                                    |
|      and 2000,respectively                                                                                       |                                          | 2,017              |                                          | 2,519                              |
|                                                                                                                                           |
|                                                                                                                                 |                                          |                    |                                          |                                    |
| Note payable,unsecured, payable in installments through 2002,                                                                             |                                          |                    |                                          |                                    |
|      with a floating interest rateof LIBOR plus .95%, 2.85% and                                                  |                                          |                    |                                          |                                    |
|      7.39% at December 31, 2001and 2000, respectively                                                            |                                          | 4,575              |                                          | 5,275                              |
|                                                                                                                                           |
|                                                                                                                                 |                                          |                    |                                          |                                    |
| Note payable,unsecured, payable in lump sum on May 1, 2006                                                                                |                                          |                    |                                          |                                    |
|      with a floating interest rateof LIBOR plus 1.625% or prime rate,                                            |                                          |                    |                                          |                                    |
|      with interest rates rangingfrom 3.56% to 3.88% at December 31,                                              |                                          |                    |                                          |                                    |
|      2001 and with averageinterest rate for 2001 of 6.37%, and 7.82%      for 2000 |                                          | 26,121             |                                          | 9,576                              |
|                                                                                                                                           |
|                                                                                                                                 |                                          |                    |                                          |                                    |
| Capital Leaseobligations, payable in installments through 2006,                                                                           |                                          |                    |                                          |                                    |
|      with effective interest ratesfrom 5.50% to 11.25%                                                           |                                          | 6,268              |                                          | 3,465                              |
|                                                                                                                                           |
|                                                                                                                                 |                                          |                    |                                          |                                    |
| Total debt                                                                                                                                |                                          | 41,463             |                                          | 22,682                             |
|                                                                                                                                           |
| Less currentmaturities of long-term debt                                                                                                  |                                          | (6,345             | )                                        | (4,283)                            |
|                                                                                                                                           |
|                                                                                                                                 |                                          |                    |                                          |                                    |
| Long-term debt, net ofcurrent maturities                                                                                                  |                                          | $35,118            |                                          | $18,399                            |
|                                                                                                                                           |

**49**

----

At December 31, 2001,long-term debt maturing over the next five years is as follows:2002, $6,345; 2003, $6,909; 2004, $921; 2005, $849; 2006, $26,439;and $0 thereafter.

Interest paid was$1,522, $1,361, and $1,241 for the years ended December 31, 2001,2000 and 1999, respectively.

**Note 8.  INCOMETAXES**

Total income tax expensefor the years ended December 31, 2001, 2000 and 1999 was allocatedas follows:
|                                                                                                                                                                                  | **      ** | **YEAR ENDED**   | **    ** | **YEAR ENDED**   | **    ** | **YEAR ENDED**   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|------------------|------------------------------|------------------|------------------------------|------------------|---|
|                                                                                                                                                                                  |                                          | **DECEMBER 31,** |                              | **DECEMBER 31,** |                              | **DECEMBER 31,** |   |
| **(INTHOUSANDS)**                                                                                                                                                                |                                          | **2001**         |                              | **2000**         |                              | **1999**         |   |
|                                                                                                                                                                                  |
|                                                                                                                                                                        |                                          |                  |                              |                  |                              |                  |   |
| Domesticincome                                                                                                                                                                   |                                          | $20,357          |                              | $16,686          |                              | $13,113          |   |
| Foreignincome                                                                                                                                                                    |                                          | 289              |                              | 595              |                              | 242              |   |
| Total incomefrom continuing operations                                                                                                                                           |                                          | 20,646           |                              | 17,281           |                              | 13,355           |   |
| Stockholders' equity for compensation expense fortax      purposes in excess of amountsrecognized for financial      reporting |                                          | (4,205           | )                            | (5,854           | )                            | (2,743           | ) |
|                                                                                                                                                                                  |
|                                                                                                                                                                        |                                          |                  |                              |                  |                              |                  |   |
|                                                                                                                                                                                  |                                          | $16,441          |                              | $11,427          |                              | $10,612          |   |
|                                                                                                                                                                                  |

Income taxexpense (benefit) attributable to income from continuing operationsconsisted of:
| **(IN THOUSANDS)**                    | **                    ** | **YEAR ENDED DECEMBER 31, 2001** | **          ** | **YEAR ENDED DECEMBER 31, 2000** | **          ** | **YEAR ENDED DECEMBER 31, 1999** |   |
|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------|----------------------------------|------------------------------------------------------------------|----------------------------------|------------------------------------------------------------------|----------------------------------|---|
|                                       |                                                                                                                              |
| Current:                              |                                                                                                                              |                                  |                                                                  |                                  |                                                                  |                                  |   |
|      Federal |                                                                                                                              | $15,452                          |                                                                  | $15,146                          |                                                                  | $10,411                          |   |
|      Foreign |                                                                                                                              |   289                       |                                                                  |   595                       |                                                                  | 242                              |   |
|      State   |                                                                                                                              | 3,108                            |                                                                  | 3,398                            |                                                                  | 2,502                            |   |
|                                       |                                                                                                                              |
|                                       |                                                                                                                              |                                  |                                                                  |                                  |                                                                  |                                  |   |
|                                       |                                                                                                                              |   18,849                    |                                                                  | 19,139                           |                                                                  | 13,155                           |   |
| Deferred:                             |                                                                                                                              |                                  |                                                                  |                                  |                                                                  |                                  |   |
|      Federal |                                                                                                                              | 1,327                            |                                                                  | (1,603                           | )                                                                | 378                              |   |
|      Foreign |                                                                                                                              | 0                                |                                                                  | 0                                |                                                                  | 0                                |   |
|      State   |                                                                                                                              | 470                              |                                                                  | (255                             | )                                                                | (178                             | ) |
|                                       |                                                                                                                              |
|                                       |                                                                                                                              |                                  |                                                                  |                                  |                                                                  |                                  |   |
|                                       |                                                                                                                              | 1,797                            |                                                                  | (1,858                           | )                                                                | 200                              |   |
|                                       |                                                                                                                              |
|                                       |                                                                                                                              |                                  |                                                                  |                                  |                                                                  |                                  |   |
|                                       |                                                                                                                              | $20,646                          |                                                                  | $17,281                          |                                                                  | $13,355                          |   |
|                                       |                                                                                                                              |

**50**

----

The amountsdiffered from the amounts computed by applying the federal incometax rate of 35 percent to pretax income from continuing operationsas a result of the following:
| ******(INTHOUSANDS)**                                                                                       | **      ** | **YEARENDED DECEMBER 31, 2001** | **       ** | **YEARENDED DECEMBER 31, 2000** | **      ** | **YEARENDED DECEMBER 31, 1999** |   |
|-------------------------------------------------------------------------------------------------------------|------------------------------------------|---------------------------------|------------------------------------------------|---------------------------------|------------------------------------------|---------------------------------|---|
|                                                                                                             |
|                                                                                                             |
|                                                                                                             |
|                                                                                                             |                                          |                                 |                                                |                                 |                                          |                                 |   |
| Federal income taxesat “expected” rate                                                          |                                          | $19,305                         |                                                | $15,862                         |                                          | $11,034                         |   |
|      Increase (reduction) inincome taxes resulting from:                           |                                          |                                 |                                                |                                 |                                          |                                 |   |
|           Mealsand entertainment                          |                                          | 258                             |                                                | 235                             |                                          | 202                             |   |
|           Taxexemptinterest                               |                                          | (44                             | )                                              | (53                             | )                                        | (50                             | ) |
|           Non-deductibleamortization of intangible assets |                                          | 101                             |                                                | 189                             |                                          | 147                             |   |
|           Foreignlosses and foreign tax rate differential |                                          | 41                              |                                                | 315                             |                                          | 858                             |   |
| State taxes, net ofFederal benefit                                                                          |                                          | 2,325                           |                                                | 2,043                           |                                          | 1,511                           |   |
| Utilization of generalbusiness credits                                                                      |                                          | (1,483                          | )                                              | (1,340                          | )                                        | (631                            | ) |
| Other                                                                                                       |                                          | 143                             |                                                | 30                              |                                          | 284                             |   |
|                                                                                                             |
|                                                                                                             |                                          |                                 |                                                |                                 |                                          |                                 |   |
|                                                                                                             |                                          | $20,646                         |                                                | $17,281                         |                                          | $13,355                         |   |
|                                                                                                             |
|                                                                                                             |

The tax effect oftemporary differences that give rise to significant portions of thedeferred tax assets and deferred tax liabilities at December 31,2001 and 2000, are presented below:

**51**

----

| **(IN THOUSANDS)**                                                                                                                               | ** **         | **DECEMBER31, 2001**             | ** **         | **DECEMBER31, 2000**   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|----------------------------------|--------------------|------------------------|
|                                                                                                                                                  |
|                                                                                                                                                  |     |                                  |     |                        |
| Deferred taxassets:                                                                                                                              |                    |                                  |                    |                        |
| Net operating loss andcredit carryforwards                                                                                                       |                    | $     0 |                    | $   123 |
| Compensated absences,principally due to accrual      for financial reportingpurposes                                    |                    | 2,331                            |                    | 1,950                  |
| Accounts receivable, dueto allowance for doubtful accounts                                                                                       |                    | 968                              |                    | 707                    |
| Accrued liabilities,primarily due to self-insurance and other      contingency accruals for financialreporting purposes |                    | 2,446                            |                    | 3,431                  |
| Deferred compensation, dueto accrual for financial reporting purposes                                                                            |                    | 3,328                            |                    | 3,262                  |
| Covenant not to competedue to difference in amortization                                                                                         |                    | 466                              |                    | 542                    |
| Other                                                                                                                                            |                    | 687                              |                    | 754                    |
|                                                                                                                                                  |
|                                                                                                                                                  |                    |                                  |                    |                        |
| Total gross deferred taxasset                                                                                                                    |                    | $10,226                          |                    | $10,769                |
|                                                                                                                                                  |
|                                                                                                                                                  |                    |                                  |                    |                        |
| **(IN THOUSANDS)**                                                                                                                               |                    | **DECEMBER31, 2001**             |                    | **DECEMBER31, 2000**   |
|                                                                                                                                                  |
|                                                                                                                                                  |                    |                                  |                    |                        |
| Deferred taxliabilities:                                                                                                                         |                    |                                  |                    |                        |
| Plant, equipment andinternal software, due to differences in depreciation &amortization                                                      |                    | $  2,481               |                    | $  1,372     |
| Partnership basis, due tobook to tax differences at partnership level                                                                            |                    | 874                              |                    | 672                    |
| Deferredexpenses                                                                                                                                 |                    | 101                              |                    | 126                    |
| Goodwill                                                                                                                                         |                    | 204                              |                    | 130                    |
| Other                                                                                                                                            |                    | 139                              |                    | 245                    |
|                                                                                                                                                  |
|                                                                                                                                                  |                    |                                  |                    |                        |
| Total gross deferred taxliabilities                                                                                                              |                    | $  3,799               |                    | $  2,545     |
|                                                                                                                                                  |
|                                                                                                                                                  |                    |                                  |                    |                        |
| Net deferred taxasset                                                                                                                            |                    | $  6,427               |                    | $  8,224     |
|                                                                                                                                                  |

Management has reviewedthe recoverability of deferred income tax assets and has determinedthat it is more likely than not that the deferred tax assets willbe fully realized through future taxable earnings. The grossdeferred tax asset is recorded on the balance sheet in Prepaid andother current assets. Income tax payments amounted to $13,267,$9,027, and $7,625 for the years ended December 31, 2001, 2000, and1999 respectively.

Deferred income taxeshave not been provided on the undistributed earnings of foreignsubsidiaries and other foreign investments carried at equity. The amount of such earnings included in consolidated retainedearnings amounted to $4,509 and $3,034, at December 31, 2001and 2000 respectively.  These earnings have been substantiallyreinvested, and we do not plan to initiate any action that wouldprecipitate the payment of income taxes thereon.

**52**

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**Note 9. COMMITMENTS**

The Company leasesfacilities, vehicles and equipment with terms ranging from threeyears to fifteen years. The majority of property leases containrenewal options and some have escalation clauses for increases inproperty taxes, Consumer Price Index and other items.

The Company leases certainitems of equipment under capital leases which had a cost of $9,886,$4,904, and $0, at December 31, 2001, 2000 and 1999 respectively,and accumulated depreciation of $964, $291, and $0, respectively.The increase in equipment leases in 2001 was due primarily tocontinued increase in the number of FDG (fluorodeoxyglucose)production equipment as a result of the expansion of our FDGproduction business.

Future minimum leasepayments under capital leases and non-cancelable operating leaseswith terms greater than one year and related sublease income atDecember 31, 2001 were as follows:
| **YEAR ENDINGDECEMBER 31,**                                            |                    |                    | **   ** |                      | **   ** |                                  |
|------------------------------------------------------------------------|--------------------|--------------------|------------------------|----------------------|------------------------|----------------------------------|
| **(INTHOUSANDS)**                                                      |     | **CAPITAL LEASES** |                        | **OPERATING LEASES** |                        | **SUBLEASE INCOME**              |
|                                                                        |
|           2002       |                    | $1,270             |                        | $  6,820   |                        | $     5 |
|           2003       |                    | 3,659              |                        | 4,463                |                        | —                          |
|           2004       |                    | 982                |                        | 3,456                |                        | —                          |
|           2005       |                    | 850                |                        | 2,646                |                        | —                          |
|           2006       |                    | 45                 |                        | 1,934                |                        | —                          |
|           Thereafter |                    | —            |                        | 4,963                |                        | —                          |
|                                                                        |
|                                                                        |                    |                    |                        |                      |                        |                                  |
|                                                                        |                    | $6,806             |                        | $24,282              |                        | $     5 |
|                                                                        |
|                                                                        |                    |                    |                        |                      |                        |                                  |
| Less amountrepresenting interest                                       |                    | $ (538        | )                      |                      |                        |                                  |
|                                                                        |                    |                    |                        |
|                                                                        |                    |                    |                        |                      |                        |                                  |
| Present value of netminimum lease payments                             |                    | $6,268             |                        |                      |                        |                                  |
|                                                                        |                    |                    |                        |

Rental expense underoperating leases was $9,482, $7,458, and $7,652 for the years endedDecember 31, 2001, 2000 and 1999, respectively.

**Note 10.  STOCKOPTIONS AND RIGHTS**

Options to purchase commonstock have been granted under various plans to officers, directorsand other employees at prices equal to the market prices at date ofgrant. An aggregate of 10,267,000 shares have been authorized forissuance under the various plans as of December 31, 2001. Optionsare generally exercisable at a rate of 25 percent per yearbeginning one year from the date of grant and expire ten yearsafter the date of grant. At December 31, 2001, 2,516,000 shareswere reserved for issuance under the various plans.

The per shareweighted-average fair value of stock options granted during 2001,2000 and 1999 was $19.91, $20.14, and $21.47, respectively, on thedate of grant using the Black Scholes option-pricing model with thefollowing weighted-average assumptions: 2001 expected dividendyield of 0%, risk-free interest rate of 4.72%, expected volatilityof 61.66% and an expected life of 5.32 years; 2000 expecteddividend yield of 0%; risk-free interest rate of 6.33%; expectedvolatility of 63.25% and an expected life of 5.63 years; 1999expected dividend yield of 0%; risk-free interest rate of 5.62%;expected volatility of 58.7% and an expected life of 5.21years.

The Company applies APBOpinion No. 25 in accounting for its plans and, accordingly, nocompensation cost has been recognized for its stock options in theConsolidated Statements of Operations. Had the Company determinedcompensation cost based on the fair value at the grant date for itsstock options under SFAS No. 123, the Company's net income wouldhave been reduced to the pro forma amounts indicated in thefollowing table:

**53**

----

| **(IN THOUSANDS, EXCEPT PERSHARE DATA)** | **        ** | **YEARENDED DECEMBER 31, 2001** | **      ** | **YEARENDED DECEMBER 31, 2000** | **      ** | **YEARENDED DECEMBER 31, 1999** |
|------------------------------------------|------------------------------------------------------|---------------------------------|------------------------------------------|---------------------------------|------------------------------------------|---------------------------------|
|                                          |
|                                          |                                                      |                                 |                                          |                                 |                                          |                                 |
| Net income                               |                                                      |                                 |                                          |                                 |                                          |                                 |
|      Asreported |                                                      | $37,869                         |                                          | $29,538                         |                                          | $19,221                         |
|      Pro-forma  |                                                      | $33,441                         |                                          | $11,307                         |                                          | $15,545                         |
| Earnings per share                       |                                                      |                                 |                                          |                                 |                                          |                                 |
| Basic:                                   |                                                      |                                 |                                          |                                 |                                          |                                 |
|      Asreported |                                                      | $    1.54   |                                          | $    1.23   |                                          | $    0.82   |
|      Pro-forma  |                                                      | $    1.36   |                                          | $    0.47   |                                          | $    0.66   |
| Diluted:                                 |                                                      |                                 |                                          |                                 |                                          |                                 |
|      Asreported |                                                      | $    1.40   |                                          | $    1.11   |                                          | $    0.75   |
|      Pro-forma  |                                                      | $    1.24   |                                          | $    0.42   |                                          | $    0.61   |
|                                          |

A summary of employeestock options is as follows:
| **(IN THOUSANDS, EXCEPT SHARE PRICE)** | **          ** | **NUMBEROF SHARES** | **       ** | **WEIGHTEDAVERAGE EXERCISE PRICE** |
|----------------------------------------|------------------------------------------------------------------|---------------------|------------------------------------------------|------------------------------------|
|                                        |
|                              |                                                                  |                     |                                                |                                    |
| Outstanding at December31, 1998        |                                                                  | 5,698               |                                                | $  6.88                  |
| Granted                                |                                                                  | 2,144               |                                                | $15.60                             |
| Exercised                              |                                                                  | (806                | )                                              | $  4.63                  |
| Cancelled                              |                                                                  | (482                | )                                              | $  8.68                  |
|                                        |
|                              |                                                                  |                     |                                                |                                    |
| Outstanding at December31, 1999        |                                                                  | 6,554               |                                                | $  9.47                  |
| Granted                                |                                                                  | 2,818               |                                                | $29.71                             |
| Exercised                              |                                                                  | (865                | )                                              | $  6.87                  |
| Cancelled                              |                                                                  | (630                | )                                              | $10.46                             |
|                                        |
|                              |                                                                  |                     |                                                |                                    |
| Outstanding at December31, 2000        |                                                                  | 7,877               |                                                | $16.70                             |
| Granted                                |                                                                  | 1,072               |                                                | $31.88                             |
| Exercised                              |                                                                  | (815                | )                                              | $13.19                             |
| Cancelled                              |                                                                  | (383                | )                                              | $21.28                             |
|                                        |
| Outstanding at December31, 2001        |                                                                  | 7,751               |                                                | $18.55                             |
|                                        |

At December 31, 2001, therange of exercise prices and weighted average remaining contractuallife of outstanding options was $4.25 to $38.59 and 6.97 years,respectively. The following table represents the price ranges foroutstanding options at December 31, 2001.

**54**

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|                    | **Option PriceRanges** | **           ** | **Number of Options Outstanding** |  |
|--------------------------------------------------------------------------------------------------------------|------------------------|------------------------------------------------------------------------|-----------------------------------|--|
|                                                                                                              |                        |                                                                        |                                   |  |
|                                                                                                              | $  4.25 -$10.00   |                                                                        | 3,112,000                         |  |
|                                                                                                              | $10.01 - $15.00        |                                                                        | 998,000                           |  |
|                                                                                                              | $15.01 - $20.00        |                                                                        | 873,000                           |  |
|                                                                                                              | $20.01 - $25.00        |                                                                        | 0                                 |  |
|                                                                                                              | $25.01 - $30.00        |                                                                        | 293,000                           |  |
|                                                                                                              | $30.01 - $35.00        |                                                                        | 1,877,000                         |  |
|                                                                                                              | $35.01 - $38.59        |                                                                        |    598,000         |  |
|                                                                                                              | Total                  |                                                                        | 7,751,000                         |  |

At December 31, 2001,2000, and 1999, the number of options exercisable was approximately3,071,000, 3,269,000, and 1,976,000, respectively, and the weightedaverage price of those options was $15.18, $14.86, and $6.40,respectively.

The Company derives atax benefit from the options exercised and sold by employees andthe benefit is credited to additional paid-in capital.

In September 1999, theCompany adopted a new Rights Plan and declared a dividenddistribution of one right for each outstanding share of theCompany’s common stock. The new Rights Plan replaced theCompany’s original rights plan, which was set to expire inSeptember 1999. The rights under the new Rights Plan are set toexpire in September 2009, unless redeemed earlier by the Board. Atleast once every three years, an independent committee of the Boardwill review the Rights Plan and, if the committee deems itappropriate, recommend to the entire Board that the Rights Plan bemodified or terminated. Each right represents the right topurchase, if and when the right becomes exercisable, a unitconsisting of one share of Syncor common stock at a per unit priceof $90 (the “Purchase Price”). The rights generallywill be exercisable only if a person or group (an “AcquiringPerson”) acquires beneficial ownership of 15% or more ofSyncor’s common stock or commences a tender or exchange offerupon consummation of which such person or group would beneficiallyown 15% or more of Syncor’s common stock (other than as aresult of repurchases of stock by Syncor, or certain purchases byinstitutional or similar stockholders so long as they do not own20% or more). In the event any person becomes an Acquiring Person(other than pursuant to an offer for all shares that the majorityof the independent directors not associated or affiliated with theAcquiring Person determines to be adequate and otherwise in thebest interest of the Company and its stockholders), each of therights becomes a discount right entitling the holder (other thanthe Acquiring Person) upon payment of the Purchase Price, to commonstock having a value equal to twice the Purchase Price (i.e., $180worth of Syncor stock for a purchase price of $90). If followingsomeone becoming an Acquiring Person, the Company engages in amerger or other business combination in which the Company does notsurvive or the common stock is changed or exchanged, or transfersmore than 50% of its assets, cash flow or earning power in onetransaction or a series of related transactions, each right becomesa right (except for the Acquiring Person) to acquire common sharesof the other party to the transaction having a value equal to twicethe Purchase Price.

** Note 11. EMPLOYEE BENEFIT PLANS**

The Company’s401(k) plan is open to all employees who are at least 18 years ofage and have a minimum of three consecutive months of service. In1989, the Company's Board of Directors amended the plan to anEmployees’ Savings and Stock Ownership Plan (ESSOP) to allowthe plan to acquire one million of the Company's shares through aleveraged employee stock ownership plan transaction. In June 1995,September 1996, and August 1997, an additional 1,500,000 shares, intotal, which were purchased in the open market, were contributed tothe plan. These shares were originally classified as“treasury stock.” The contributions totaled $8,657,000and reflected the fair market value at the time of contribution. Inconnection with these transactions, the Company made a loan to theESSOP. The ESSOP loan was paid off as of December 31,2001.

Under the ESSOP,participants may contribute one percent to fourteen percent oftheir compensation to 401(k) investment options and an additionaltwo percent of their compensation to purchase Company stock. TheCompany makes matching contributions to 50 percent of theemployees’ 401(k) investment contributions up to a maximum offour percent of the employee’s compensation and to 100percent of the employees’ Company stock purchases up to twopercent of the employee’s compensation. The Company’smatching contribution is made in Company stock. If an ESSOP loanpayment is outstanding, the number of shares available to matchemployee contributions is directly related to the amount ofprincipal payments made on the ESSOP loan. Once the number ofavailable shares is determined, the Company matches theemployees’ contributions based on the fair market value ofthe shares and the remainder of any shares not allocated after allmatching is complete is allocated to all eligible employees basedon relative compensation.

**55**

----

Participants are fully andimmediately vested in their contributions and vest in employercontributions over a five-year period of continuous employment.After five years of continuous employment, any further employercontributions are fully and immediately vested. The Company’scontributions for the years ended December 31, 2001, 2000 and 1999amounted to $1,735,000, $1,895,000, and $1,957,000, respectively,of which $1,685,000, $1,685,000, and $1,686,000, respectively, wereused to pay down principal on the ESSOP loan and $50,000, $210,000,and $271,000 respectively, to pay interest.

**Note 12.  NETINCOME PER SHARE**

The following tablepresents the computation of basic earnings per share(EPS):
| **(IN THOUSANDSEXCEPT PER SHARE DATA)**  | **FOR THEYEAR ENDED DECEMBER 31, 2001** | **FOR THEYEAR ENDED DECEMBER 31, 2000** | **FOR THEYEAR ENDED DECEMBER 31, 1999** |
|------------------------------------------|-----------------------------------------|-----------------------------------------|-----------------------------------------|
|                                          |
|                                          |                                    | Income (Numerator)                      |                               | Shares (Denominator) |    | Per Share Amount |    | Income (Numerator) |    | Shares (Denominator) |    | Per Share Amount |    | Income (Numerator) |    | Shares (Denominator) |    | Per Shares Amount |
|                                          |
|                                          |                                         |                                         |                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| BasicEPS-continuing operations           |                                         | $34,512                                 |                                         | 24,570 |  | $1.40 |  | $28,040 |  | 23,948 |  | $1.17 |  | $18,172 |  | 23,340 |  | $0.78 |
|                                          |                                         |                                         |                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Basic EPS– discontinued operations |                                         | $ 3,357                            |                                         | 24,570 |  | $0.14 |  | $ 1,498 |  | 23,948 |  | $0.06 |  | $ 1,049 |  | 23,340 |  | $0.04 |
|                 |                                         |                                         |                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Total                                    |                                         | $37,869                                 |                                         | 24,570 |  | $1.54 |  | $29,538 |  | 23,948 |  | $1.23 |  | $19,221 |  | 23,340 |  | $0.82 |
|                                |                                         |                                         |                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Effect ofdilutive stock options          |                                         |                                         |                                         | 2,459 |  |  |  |  |  | 2,709 |  |  |  |  |  | 2,138 |  |  |
|                 |                                         |                                         |                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| DilutedEPS-continuing operations         |                                         | $34,512                                 |                                         | 27,029 |  | $1.28 |  | $28,040 |  | 26,657 |  | $1.05 |  | $18,172 |  | 25,478 |  | $0.71 |
|                                          |                                         |                                         |                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| DilutedEPS-discontinued operations       |                                         | $ 3,357                            |                                         | 27,029 |  | $0.12 |  | $ 1,498 |  | 26,657 |  | $0.06 |  | $ 1,049 |  | 25,478 |  | $0.04 |
|                                          |                                         |                                         |                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Total                                    |                                         | $37,869                                 |                                         | 27,029 |  | $1.40 |  | $29,538 |  | 26,657 |  | $1.11 |  | $19,221 |  | 25,478 |  | $0.75 |

**Note 13. LITIGATION AND CONTINGENCIES**

There are variouslitigation proceedings in which the Company and its subsidiariesare involved. Many of the claims asserted against the Company inthese proceedings are covered by insurance. The results oflitigation proceedings cannot be predicted with certainty. However,in the opinion of the Company’s general counsel, suchproceedings either are without merit or do not have a potentialliability which would materially affect the financial condition ofthe Company and its subsidiaries on a consolidatedbasis.

**Note 14. SUBSEQUENT EVENTS**

On January 17, 2002, theCompany completed an asset securitization agreement with one of ourbanks using the U.S. pharmacy business segment’s tradereceivables as collateral. Under this facility, we sell ourreceivables generated from our U.S. radiopharmacy operation to awholly-owned subsidiary, Syncor Financing Corporation, which inturn sells the receivables to a third party.  Thissecuritization program will allow the Company to borrow up to $65million at rates generally more favorable than under the creditline agreement. Upon execution of the securitization agreement, ourcredit line had a provision that required a 50% reduction of thesecuritization amount, or  $32.5 million.  Therefore, thecredit line has a current borrowing limit of $167.5million.

On June 14, 2002, weentered into an agreement and plan of merger with Cardinal Healthand its wholly owned subsidiary, Mudhen Merger Corp. Under theterms and subject to the conditions of the agreement, we willbecome a wholly owned subsidiary of Cardinal Health. The mergeragreement provides for Syncor stockholders to receive 0.52 CardinalHealth shares for each Syncor share they own.  See note 1 formore information about the merger.

On June 14, 2002, we alsoannounced our decision to discontinue certain operations includingour medical imaging business-CMI (a separate segment for reportingpurposes), certain overseas locations and the brachytherapy seedsmanufacturing operations of the Radiopharmacy Services Business. Onthe date of our announcement, we recorded net after-tax charges indiscontinued operations for severance, impairment of assets heldfor sale and other charges totaling $24.9 million or $0.93 perfully diluted share.  We also announced a special charge toearnings of $5.0 million ($3.1 million net after tax or $0.11 perfully diluted share).  See note 1 for more information aboutthese charges.

In our June 14, 2002announcement regarding the discontinuation of CMI operations, weindicated that we were entertaining bids for the sale of CMI. Since that announcement, numerous potential buyers have conducteddue diligence on the CMI business.  During the quarter endedSeptember 30, 2002, we received various offers from potentialbuyers, and based on these offers, we believe that it is probablethat the sale of CMI will result in a loss on disposal to Syncor inthe range of $28 million to $35 million net after tax.  Basedon this information, we intend to recognize an asset impairmentcharge relative to CMI in the range of $28 million to $35 millionnet after tax in the quarter ended September 30, 2002.

**56**

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**Note 15.  BUSINESSSEGMENTS**

The Company is currentlyin two different business segments: The first segment is thecompounding, dispensing, and distribution of complexpharmaceuticals in the United States. The second segment is thecompounding, dispensing, and distribution of complexpharmaceuticals and the provision of radiology services outside ofthe United States.
| **(IN THOUSANDS) U.S. PHARMACY SERVICES BUSINESS**      | **                     ** | **2001**                                  | **                ** | **2000**                       |   |
|---------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|------------------------------------------------------------------------------------------------------|--------------------------------|---|
|                                                         |                                                                                                                                    |                                           |                                                                                                      |                                |   |
|      Revenues                  |                                                                                                                                    | $564,697                                  |                                                                                                      | $489,247                       |   |
|      OperatingIncome           |                                                                                                                                    | $  73,347                       |                                                                                                      | $  56,743            |   |
|      TotalAssets               |                                                                                                                                    | $189,274                                  |                                                                                                      | $159,657                       |   |
|      CapitalExpenditures       |                                                                                                                                    | $  25,603                       |                                                                                                      | $    4,398 |   |
|      Depreciation/Amortization |                                                                                                                                    | $    7,323            |                                                                                                      | $    5,475 |   |
|                                               |                                                                                                                                    |                                           |                                                                                                      |                                |   |
| **INTERNATIONALOPERATIONS**                             |                                                                                                                                    | **2001**                                  |                                                                                                      | **2000**                       |   |
|                                                         |                                                                                                                                    |                                           |                                                                                                      |                                |   |
|      Revenues                  |                                                                                                                                    | $  33,439                       |                                                                                                      | $  28,305            |   |
|      Operating (Loss)Income    |                                                                                                                                    | $      (375 | )                                                                                                    | $    1,230 |   |
|      TotalAssets               |                                                                                                                                    | $  53,411                       |                                                                                                      | $  52,052            |   |
|      CapitalExpenditures       |                                                                                                                                    | $    7,071            |                                                                                                      | $    7,410 |   |
|      Depreciation/Amortization |                                                                                                                                    | $    3,856            |                                                                                                      | $    1,953 |   |
|                                               |                                                                                                                                    |                                           |                                                                                                      |                                |   |
| **UNALLOCATEDCORPORATE**                                |                                                                                                                                    | **2001**                                  |                                                                                                      | **2000**                       |   |
|                                                         |                                                                                                                                    |                                           |                                                                                                      |                                |   |
|      OperatingLoss             |                                                                                                                                    | $(16,714                                  | )                                                                                                    | $(14,234                       | ) |
|      TotalAssets               |                                                                                                                                    | $  62,002                       |                                                                                                      | $  48,213            |   |
|      CapitalExpenditures       |                                                                                                                                    | $  12,460                       |                                                                                                      | $    7,567 |   |
|      Depreciation/Amortization |                                                                                                                                    | $    5,733            |                                                                                                      | $    4,906 |   |
| **GEOGRAPHICSEGMENTS**                     | **         ** | **REVENUES**        | **     ** | **OPERATINGINCOME** | **              ** | **TOTALASSETS**     |
|--------------------------------------------|------------------------------------------------------------|---------------------|------------------------------------|---------------------|------------------------------------------------------------------------------------------|---------------------|
|                                            |
|      UnitedStates |                                                            |                     |                                    |                     |                                                                                          |                     |
|      2001         |                                                            | $564,697            |                                    | $55,231             |                                                                                          | $251,276            |
|      2000         |                                                            | $489,247            |                                    | $41,819             |                                                                                          | $207,870            |
|                                  |                                                            |                     |                                    |                     |                                                                                          |                     |
|      Rest ofWorld |                                                            |                     |                                    |                     |                                                                                          |                     |
|      2001         |                                                            | $  33,439 |                                    | $  1,027  |                                                                                          | $  53,411 |
|      2000         |                                                            | $  28,305 |                                    | $  1,920  |                                                                                          | $  52,052 |
|                                            |

**SELECTED QUARTERLYRESULTS OF OPERATIONS**

The unauditedquarterly operating results in the Selected Quarterly Results ofOperations have been prepared on the same basis as the auditedconsolidated financial statements and, in the opinion ofmanagement, include all adjustments necessary for a fairpresentation for the periods presented.

Unaudited calendarquarterly information is summarized below:

**57**

----

| ****
**(IN THOUSANDS, EXCEPTPER SHARE DATA)**        | **      ** | **MARCH31,**                   | **    **         | **JUNE30,**                    | **    **         | **SEPTEMBER30,**               | **     ** | **DECEMBER31,**                | **    ** | **2001**           |
|------------------------------------------------------|------------------------------------------|--------------------------------|--------------------------------------|--------------------------------|--------------------------------------|--------------------------------|------------------------------------|--------------------------------|------------------------------|--------------------|
|                                                      |
| Net sales                                            |                                          | $140,093                       |                                      | $144,377                       |                                      | $149,818                       |                                    | $163,848                       |                              | $598,136           |
| Gross profit                                         |                                          | $  42,219            |                                      | $  44,057            |                                      | $  44,809            |                                    | $  49,306            |                              | $180,391           |
|                                                      |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
| Income:                                              |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
|      Continuingoperation    |                                          | 9,466                          |                                      | 10,202                         |                                      | 7,075                          |                                    | 7,769                          |                              | 34,512             |
|      Discontinuedoperations |                                          | 741                            |        | 780                            |        | 759                            |                                    | 1,077                          |                              | 3,357              |
|                                                      |
| Net Income                                           |                                          | 10,207                         |                                      | 10,982                         |                                      | 7,834                          |                                    | 8,846                          |                              | 37,869             |
|                                                      |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
| Earnings per basicshare:                             |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
|      Continuingoperations   |                                          | 0.39                           |                                      | 0.42                           |                                      | 0.29                           |                                    | 0.31                           |                              | 1.40               |
|      Discontinuedoperations |                                          |  0.03                     |                                      | 0.03                           |                                      | 0.03                           |                                    | 0.05                           |                              | 0.14               |
|                                                      |
| Net Income                                           |                                          | 0.42                           |                                      | 0.45                           |                                      | 0.32                           |                                    | 0.36                           |                              | 1.54               |
|                                                      |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
| Earnings per dilutedshare:                           |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
|      Continuingoperations   |                                          | 0.35                           |                                      | 0.38                           |                                      | 0.26                           |                                    | 0.29                           |                              | 1.28               |
|      Discontinuedoperations |                                          | 0.03                           |                                      | 0.03                           |                                      | 0.03                           |                                    | 0.04                           |                              | 0.12               |
|                                                      |
| Net Income                                           |                                          | 0.38                           |                                      | 0.41                           |                                      | 0.29                           |                                    | 0.33                           |                              | 1.40               |
|                                                      |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
| Weighted average sharesoutstanding:                  |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
|      Basic                  |                                          | 24,473                         |                                      | 24,405                         |                                      | 24,603                         |                                    | 24,798                         |                              | 24,570             |
|      Diluted                |                                          | 27,101                         |                                      | 26,936                         |                                      | 27,024                         |                                    | 26,985                         |                              | 27,029             |
|                                                      |
| Market price pershare:                               |                                          |                                |                                      |                                |                                      |                                |                                    |                                |                              |                    |
|      High                   |                                          | $    38.81 |                                      | $    42.29 |                                      | $    38.74 |                                    | $    33.31 |                              | $  42.29 |
|      Low                    |                                          | $    27.25 |                                      | $    26.64 |                                      | $    26.63 |                                    | $    26.03 |                              | $  26.03 |
|                                                      |
|                                            |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
|------------------------------------------------------|--------------------------|--------------------------------|--------------------------------------------------|--------------------------------|--------------------------|--------------------------------|--------------------------|--------------------------------|--------------------------------------------|--------------------------------|
| **(INTHOUSANDS,  EXCEPT PER SHARE DATA)**       |                          | **MARCH31,**                   |                                                  | **JUNE30,**                    |                          | **SEPTEMBER 30,**              |                          | **DECEMBER 31,**               |                                            | **2000**                       |
|                                                      |
| Net sales                                            |      | $129,555                       |          | $129,663                       |      | $126,768                       |      | $131,566                       |         | $517,552                       |
| Grossprofit                                          |                          | $  37,616            |                                                  | $  38,014            |                          | $  36,365            |                          | $  37,687            |                                            | $149,682                       |
|                                            |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
| Income:                                              |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
|      Continuingoperation    |                          | 7,377                          |                                                  | 8,698                          |                          | 6,017                          |                          | 5,948                          |                                            | 28,040                         |
|      Discontinuedoperations |                          | 103                            |                                                  | 380                            |                          | 241                            |                          | 774                            |                                            | 1,498                          |
|                                                      |
| Net Income                                           |                          | 7,480                          |                                                  | 9,078                          |                          | 6,258                          |                          | 6,722                          |                                            | 29,538                         |
|                                                      |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
| Earnings per basicshare:                             |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
|      Continuingoperations   |                          | 0.31                           |                                                  | 0.37                           |                          | 0.25                           |                          | 0.25                           |                                            | 1.17                           |
|      Discontinuedoperations |                          |  0.01                     |                                                  | 0.01                           |                          | 0.01                           |                          | 0.03                           |                                            | 0.06                           |
|                                                      |
| Net Income                                           |                          | 0.32                           |                                                  | 0.38                           |                          | 0.26                           |                          | 0.28                           |                                            | 1.23                           |
|                                                      |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
| Earnings per dilutedshare:                           |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
|      Continuingoperations   |                          | 0.29                           |                                                  | 0.33                           |                          | 0.22                           |                          | 0.22                           |                                            | 1.05                           |
|      Discontinuedoperations |                          | 0.01                           |                                                  | 0.01                           |                          | 0.01                           |                          | 0.03                           |                                            | 0.06                           |
|                                                      |
| Net Income                                           |                          | 0.30                           |                                                  | 0.34                           |                          | 0.23                           |                          | 0.25                           |                                            | 1.11                           |
|                                                      |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
| Weighted averageshares outstanding:                  |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
|      Basic                  |                          | 23,726                         |                                                  | 23,772                         |                          | 24,091                         |                          | 24,201                         |                                            | 23,948                         |
|      Diluted                |                          | 25,190                         |                                                  | 26,328                         |                          | 27,374                         |                          | 26,936                         |                                            | 26,657                         |
|                                                      |
| Market price pershare                                |                          |                                |                                                  |                                |                          |                                |                          |                                |                                            |                                |
|      High                   |                          | $    16.50 |                                                  | $    36.00 |                          | $    43.94 |                          | $    39.06 |                                            | $    43.94 |
|      Low                    |                          | $    11.02 |                                                  | $    13.00 |                          | $    32.75 |                          | $    23.75 |                                            | $    11.02 |
|                                                      |

**58**

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**SYNCORINTERNATIONAL CORPORATION AND SUBSIDIARIES**

******Schedule II. Valuation and QualifyingAccounts-Continuing Operations**

****

**(Inthousands)**

****
|                                |
|--------------------------------|
| **Description**                |  | **Balance At Beginning Of Period** |  | **Costs And Expenses (A)** |  | **Deductions (B)** |  | **Balance At End Of Period** |
|                                |
| Year Ended                     |                   |  |          |  |          |  |          |  |
| December 31,2001               |     |  |     |  |     |  |     |  |
| Allowance for doubtfulaccounts |     | $2,485 |     | $1,078 |     | $(186 | ) | $3,749 |
|                                |     |  |     |  |     |  |     |  |
| Year Ended                     |     |  |     |  |     |  |     |  |
| December 31,2000               |     |  |     |  |     |  |     |  |
| Allowance for doubtfulaccounts |      | $1,449 |     | $1,857 |     | $ 821 |     | $2,485 |
|                                |     |  |     |  |     |  |     |  |
| Year Ended                     |      |  |     |  |     |  |     |  |
| December 31,1999               |     |  |     |  |     |  |     |  |
| Allowance for doubtfulaccounts |     | $   765 |     | $   491 |     | $(193 | ) | $1,449 |

(A)         Estimatedbad debt.

(B)         Uncollectibleaccounts written-off, net of recoveries and change inreserve.

**59**

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**Exhibit99.1**

****

**Certification of CEO and CFORegarding Annual Report on Form 10-K/A-1For the Year Ended December 31, 2001**

Pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350, asadopted), Robert G. Funari, Chief Executive Officer of SyncorInternational Corporation (the "Company"), and William P. Forster,Chief Financial Officer of the Company, hereby certify that, to thebest of their knowledge,
|       | 1. |       | The Company's AnnualReport on Form 10-K/A-1 for the period ended December 31, 2001 (the"Covered Report"), which this Certification accompanies, fullycomplies with the requirements of Section 13(a) or Section 15(d) ofthe Securities Exchange Act of 1934; and            |
|--------------------------------|----|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |    |                                |                                                                                                                                                                                                                                                                             |
|                                | 2. |                                | The information containedin the Covered Report fairly presents, in all material respects,the financial condition of the Company at the end of the periodcovered by the Covered Report and results of operations of theCompany for the period covered by the Covered Report. |

Dated:   October11, 2002
|                                                                                                                 | /s/ Robert G.Funari                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Robert G.Funari                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | President and ChiefExecutive Officer                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | /s/ William P.Forster                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | William P.Forster                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Sr. Vice President andChief Financial Officer                                                                                         |

**60**

----