##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended April 30, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR
THE TRANSITION PERIOD FROMTO
 Commission file number 000-51602
 SYNERGETICS USA, INC.
  Delaware
    
    20-5715943(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 3845 Corporate Centre DriveOFallon, Missouri
    
    63368(Address of principal executive offices)
    
    (Zip Code)
  (Registrants Telephone Number, Including Area Code)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



PagePART I Financial Information
    
    
    3Item 1. Unaudited Condensed Consolidated Financial Statements
    
    
    3Balance Sheets  April 30, 2008 and July 31, 2007
    
    
    3Statements of Income for the three months and nine months
ended April 30, 2008 and April 30, 2007
    
    
    4Statements of Cash Flows for the nine months ended April 30,
2008 and April 30, 2007
    
    
    5Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II Other Information
    
    
    25Item 1. Legal Proceedings
    
    
    25Item 1A. Risk Factors
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27Item 5. Other Information
    
    
    27Item 6. Exhibits
    
    
    27Signatures
    
    
    28Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002302 Certification of Chief Executive Officer302 Certification of Chief Financial Officer906 Certifiction of Chief Executive Officer906 Certification of Chief Financial Officer
  2




---



##### Table of Contents



Part I  Financial Information
 
 Item 1  Unaudited Condensed Consolidated Financial Statements
 Synergetics USA, Inc. and Subsidiaries
 
 Condensed Consolidated Balance Sheets
As of April 30, 2008 (Unaudited) and July 31, 2007
(Dollars in thousands, except share data)
 April 30, 2008
    
    
    July 31, 2007AssetsCurrent AssetsCash and cash equivalents
    
    $
    138
    
    
    $
    167Accounts receivable, net of allowance for
doubtful accounts of $251 and $227,
respectively
    
    
    8,776
    
    
    
    8,264Income taxes receivable
    
    
    
    
    
    
    473Inventories
    
    
    14,529
    
    
    
    14,247Prepaid expenses
    
    
    460
    
    
    
    343Deferred income taxes
    
    
    498
    
    
    
    516Total current assets
    
    
    24,401
    
    
    
    24,010Property and equipment, net
    
    
    8,053
    
    
    
    8,031Goodwill
    
    
    10,660
    
    
    
    10,660Other intangible assets, net
    
    
    14,149
    
    
    
    14,782Patents, net
    
    
    975
    
    
    
    871Deferred expenses
    
    
    215
    
    
    
    216Cash value of life insurance
    
    
    46
    
    
    
    46Total assets
    
    $
    58,499
    
    
    $
    58,616Liabilities and Stockholders EquityCurrent LiabilitiesExcess of outstanding checks over bank balance
    
    $
    236
    
    
    $
    531Lines-of-credit
    
    
    6,494
    
    
    
    5,715Current maturities of long-term debt
    
    
    1,752
    
    
    
    2,161Current maturities of revenue bonds payable
    
    
    249
    
    
    
    249Accounts payable
    
    
    1,823
    
    
    
    2,262Income taxes payable
    
    
    187
    
    
    
    Accrued expenses
    
    
    2,684
    
    
    
    2,739Total current liabilities
    
    
    13,425
    
    
    
    13,657Long-Term LiabilitiesLong-term debt, less current maturities
    
    
    3,804
    
    
    
    5,014Revenue bonds payable, less current maturities
    
    
    3,704
    
    
    
    3,891Deferred income taxes
    
    
    2,482
    
    
    
    2,619Total long-term liabilities
    
    
    9,990
    
    
    
    11,524Total liabilities
    
    
    23,415
    
    
    
    25,181Commitments and contingencies (Note 6)Stockholders EquityCommon stock at April 30, 2008 and
July 31, 2007,
$.001 par value, 50,000,000
shares authorized;
24,325,215 and 24,265,500 shares
issued and
outstanding, respectively
    
    
    24
    
    
    
    24Additional paid-in capital
    
    
    24,272
    
    
    
    24,083Retained earnings
    
    
    10,788
    
    
    
    9,328Total stockholders equity
    
    
    35,084
    
    
    
    33,435Total liabilities and
stockholders equity
    
    $
    58,499
    
    
    $
    58,616
  3




---



##### Table of Contents



Synergetics USA, Inc. and Subsidiaries
 
 Unaudited Condensed Consolidated Statements of Income
Three and Nine Months Ended April 30, 2008 and April 30, 2007
(Dollars in thousands, except per share information)
 Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedApril 30, 2008
    
    
    April 30, 2007
    
    
    April 30, 2008
    
    
    April 30, 2007Sales
    
    $
    13,500
    
    
    $
    11,482
    
    
    $
    35,606
    
    
    $
    32,741Cost of sales
    
    
    5,168
    
    
    
    4,937
    
    
    
    13,995
    
    
    
    13,372Gross profit
    
    
    8,332
    
    
    
    6,545
    
    
    
    21,611
    
    
    
    19,369Operating expensesResearch and development
    
    
    748
    
    
    
    548
    
    
    
    1,895
    
    
    
    1,979Costs associated with
closing of Philadelphia
plant
    
    
    85
    
    
    
    
    
    
    
    85
    
    
    
    Selling, general and
administrative expense
    
    
    5,344
    
    
    
    6,044
    
    
    
    16,454
    
    
    
    16,5376,177
    
    
    
    6,592
    
    
    
    18,434
    
    
    
    18,516Operating income (loss)
    
    
    2,155
    
    
    
    (47
    )
    
    
    3,177
    
    
    
    853Other income (expense)Interest income
    
    
    2
    
    
    
    
    
    
    
    6
    
    
    
    1Interest expense
    
    
    (347
    )
    
    
    (226
    )
    
    
    (911
    )
    
    
    (635
    )Loss on sale of asset
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    Miscellaneous
    
    
    (1
    )
    
    
    (2
    )
    
    
    17
    
    
    
    7(346
    )
    
    
    (228
    )
    
    
    (893
    )
    
    
    (627
    )Income (loss) before
provision for income
taxes
    
    
    1,809
    
    
    
    (275
    )
    
    
    2,284
    
    
    
    226Provision
(benefit) for income taxes
    
    
    692
    
    
    
    (143
    )
    
    
    824
    
    
    
    66(Benefit) of re-enactment
of the research and
experimentation credit
    
    
    
    
    
    
    (40
    )
    
    
    
    
    
    
    (306
    )692
    
    
    
    (183
    )
    
    
    824
    
    
    
    (240
    )Net income (loss)
    
    $
    1,117
    
    
    $
    (92
    )
    
    $
    1,460
    
    
    $
    466Earnings per share:Basic
    
    $
    0.05
    
    
    $
    0.00
    
    
    $
    0.06
    
    
    $
    0.02Diluted
    
    $
    0.05
    
    
    $
    0.00
    
    
    $
    0.06
    
    
    $
    0.02Basic weighted-average
common shares outstanding
    
    
    24,321,274
    
    
    
    24,219,507
    
    
    
    24,310,211
    
    
    
    24,214,831Diluted weighted-average
common shares outstanding
    
    
    24,396,183
    
    
    
    24,423,364
    
    
    
    24,441,241
    
    
    
    24,423,547
  4




---



##### Table of Contents



Synergetics USA, Inc. and Subsidiaries
 
 Unaudited Condensed Consolidated Statements of Cash Flows
 Nine Months Ended April 30, 2008 and April 30, 2007
 (Dollars in thousands)
 Nine Months Ended
    
    
    Nine Months EndedApril 30, 2008
    
    
    April 30, 2007Cash Flows from Operating ActivitiesNet income
    
    $
    1,460
    
    
    $
    466Adjustments to reconcile net income to net cash used in
operating activitiesDepreciation and amortization
    
    
    1,495
    
    
    
    1,123Provision for doubtful accounts receivable
    
    
    43
    
    
    
    78Stock-based compensation
    
    
    167
    
    
    
    217Deferred income taxes
    
    
    (119
    )
    
    
    (191
    )Loss on sale of assets
    
    
    5
    
    
    
    Change in assets and liabilities(Increase) decrease in:Accounts receivable
    
    
    (555
    )
    
    
    (815
    )Income taxes receivable
    
    
    473
    
    
    
    Inventories
    
    
    (282
    )
    
    
    (670
    )Prepaid expenses
    
    
    (130
    )
    
    
    (14
    )Other current assets
    
    
    
    
    
    
    (333
    )(Decrease) increase in:Accounts payable
    
    
    (439
    )
    
    
    (1,127
    )Accrued expenses
    
    
    (55
    )
    
    
    (43
    )Income taxes payable
    
    
    187
    
    
    
    Net cash provided by (used in) operating activities
    
    
    2,250
    
    
    
    (1,309
    )Cash Flows from Investing ActivitiesNet decrease in notes receivable, officer-stockholder
    
    
    
    
    
    
    16Increase in deferred expenses
    
    
    (57
    )
    
    
    Proceeds from sale of equipment
    
    
    19
    
    
    
    Purchase of property and equipment
    
    
    (779
    )
    
    
    (230
    )Acquisition of patents and other intangibles
    
    
    (162
    )
    
    
    (2,815
    )Sales of trading securities
    
    
    
    
    
    
    50Net cash used in investing activities
    
    
    (979
    )
    
    
    (2,979
    )Cash Flows from Financing ActivitiesExcess of outstanding checks over bank balance
    
    
    (295
    )
    
    
    406Net borrowings on lines-of-credit
    
    
    779
    
    
    
    3,627Principal payments on revenue bonds payable
    
    
    (187
    )
    
    
    (186
    )Proceeds from long-term debt
    
    
    
    
    
    
    1,129Principal payments on long-term debt
    
    
    (1,247
    )
    
    
    (677
    )Payments on debt incurred for acquisition of trademark
    
    
    (372
    )
    
    
    (351
    )Proceeds from stock options exercised
    
    
    22
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (1,300
    )
    
    
    3,948Net (decrease) in cash and cash equivalents
    
    
    (29
    )
    
    
    (340
    )Cash and cash equivalentsBeginning
    
    
    167
    
    
    
    557Ending
    
    $
    138
    
    
    $
    217
  5




---



##### Table of Contents



Synergetics USA, Inc. and Subsidiaries
 
 Notes to Unaudited Condensed Consolidated Financial Statements
(Tabular information reflects dollars in thousands, except share and per share information)
 Note 1. General
 Nature of business:
 Reporting period:
 Basis of presentation:
 Note 2. Summary of Significant Accounting Policies
  Accounting for Uncertainties in Income Taxes:
 6




---



##### Table of Contents



Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities
 Reclassifications:
 Note 3. Distribution Agreements
  Codman and Shurtleff, Inc. (Codman)
 ®
  7




---



##### Table of Contents



Note 4. Stock-Based Compensation
 Stock Option Plans
  Nine Months Ended April 30, 2008Weighted-Average
    
    
    Weighted-Exercise
    
    
    AverageShares
    
    
    Price
    
    
    Fair ValueOptions outstanding, beginning of period
    
    
    428,735
    
    
    $
    2.18
    
    
    $
    1.79For the period from August 1, 2007 through April 30, 2008:Granted
    
    
    40,000
    
    
    
    2.95
    
    
    
    2.45Forfeited
    
    
    (7,000
    )
    
    
    3.08
    
    
    
    1.59Exercised
    
    
    (9,000
    )
    
    
    2.48
    
    
    
    2.24Options outstanding, end of period
    
    
    452,735
    
    
    $
    2.32
    
    
    $
    1.84Options exercisable, end of period
    
    
    381,207
    
    
    $
    2.47
    
    
    $
    2.08
  Expected average risk-free interest rate
    
    
    3.5
    %Expected average life (in years)
    
    
    5Expected volatility
    
    
    69.2
    %Expected dividend yield
    
    
    0.0
    %
  Restricted Stock Plans
  8




---



##### Table of Contents



Note 5. Supplemental Balance Sheet Information
 Inventories
 April 30,
    
    
    July 31,2008
    
    
    2007Raw material and component parts
    
    $
    6,153
    
    
    $
    6,754Work-in-progress
    
    
    2,822
    
    
    
    1,948Finished goods
    
    
    5,554
    
    
    
    5,545$
    14,529
    
    
    $
    14,247
 Property and equipment
 April 30,
    
    
    July 31,2008
    
    
    2007Land
    
    $
    730
    
    
    $
    730Building and improvements
    
    
    5,717
    
    
    
    5,436Machinery and equipment
    
    
    4,815
    
    
    
    4,428Furniture and fixtures
    
    
    663
    
    
    
    610Software
    
    
    115
    
    
    
    115Construction in process
    
    
    41
    
    
    
    3412,081
    
    
    
    11,353Less accumulated depreciation
    
    
    4,028
    
    
    
    3,322$
    8,053
    
    
    $
    8,031
 Other intangible assets
  GrossCarrying
    
    
    AccumulatedValue
    
    
    Amortization
    
    
    NetApril 30, 2008Patents
    
    $
    1,278
    
    
    $
    303
    
    
    $
    975Proprietary know-how
    
    
    4,057
    
    
    
    948
    
    
    
    3,109Trademark
    
    
    5,923
    
    
    
    
    
    
    
    5,923Licensing agreements
    
    
    5,834
    
    
    
    717
    
    
    
    5,117$
    17,092
    
    
    $
    1,968
    
    
    $
    15,124
 July 31, 2007Patents
    
    $
    1,103
    
    
    $
    232
    
    
    $
    871Proprietary know-how
    
    
    4,057
    
    
    
    740
    
    
    
    3,317Trademark
    
    
    5,923
    
    
    
    
    
    
    
    5,923Licensing agreements
    
    
    5,834
    
    
    
    292
    
    
    
    5,542$
    16,917
    
    
    $
    1,264
    
    
    $
    15,653
  9




---



##### Table of Contents



Periods Ending July 31:
    
    AmountFiscal Year 2008 (remaining 3 months)
    
    $
    215Fiscal Year 2009
    
    
    858Fiscal Year 2010
    
    
    828Fiscal Year 2011
    
    
    606Fiscal Year 2012
    
    
    562
  Pledged assets; short and long-term debt (excluding revenue bonds payable)
  Revolving Credit Facilities:
 Non-U.S. Receivables Revolving Credit Facility
 Equipment Line of Credit:
 10




---



##### Table of Contents



April 30,
    
    
    July 31,2008
    
    
    2007Note payable to bank, due in monthly
principal installments of $1,139 plus
interest at prime rate plus 1% (an
effective rate of 9.25% as of July 31,
2007), remaining balance paid September
2007, collateralized by a second deed of
trust
    
    $
    
    
    
    $
    151Note payable, due in monthly installments
of $509, including interest at 4.9%,
remaining balance due May 2008,
collateralized by a vehicle
    
    
    
    
    
    
    3Note payable to bank, due in monthly
principal installments of $39,642 beginning
November 2005 plus interest at a rate of
8.25%, remaining balance due September 30,
2010, collateralized by substantially all
assets of the Company
    
    
    198
    
    
    
    555Note payable to bank, due in monthly
installments of $19,173 beginning December
2006 plus interest at a rate of 8.25%,
remaining balance due on November 14, 2010,
collateralized by substantially all assets
of the Company
    
    
    574
    
    
    
    766Note payable to the estate of the late Dr.
Leonard I. Malis, due in quarterly
installments of $159,904 which includes
interest at an imputed rate of 6.00%,
remaining balance of $2,558,464, including
contractual interest payments, due December
2011, collateralized by the
Malis® trademark
    
    
    2,134
    
    
    
    2,506Settlement obligation to Iridex
Corporation, due in annual installments of
$800,000 which includes interest at an
imputed rate of 8.00%, remaining balance of
$3,200,000 including the effects of
imputing interest, due April 15, 2012
    
    
    2,650
    
    
    
    3,1945,556
    
    
    
    7,175Less current maturities
    
    
    1,752
    
    
    
    2,161Long-term portion
    
    $
    3,804
    
    
    $
    5,014
 Note 6. Commitments and Contingencies
     11




---



##### Table of Contents



Note 7. Entity Wide Information
  Three Months Ended
    
    
    Nine Months EndedApril 30,
    
    
    April 30,
    
    
    April 30,
    
    
    April 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Product Line:Ophthalmic
    
    $
    7,293
    
    
    $
    6,523
    
    
    $
    20,521
    
    
    $
    17,752Neurosurgery
    
    
    3,368
    
    
    
    2,234
    
    
    
    8,911
    
    
    
    7,027OEM (Codman, Stryker
and Iridex)
    
    
    2,612
    
    
    
    2,394
    
    
    
    5,528
    
    
    
    6,941Other (ENT and Dental)
    
    
    227
    
    
    
    331
    
    
    
    646
    
    
    
    1,021Total
    
    $
    13,500
    
    
    $
    11,482
    
    
    $
    35,606
    
    
    $
    32,741Region Specific:Domestic
    
    $
    9,724
    
    
    $
    8,360
    
    
    $
    25,679
    
    
    $
    25,253International
    
    
    3,776
    
    
    
    3,122
    
    
    
    9,927
    
    
    
    7,488Total
    
    $
    13,500
    
    
    $
    11,482
    
    
    $
    35,606
    
    
    $
    32,741
  Note 8. Recent Accounting Pronouncements
   12




---



##### Table of Contents



13




---



##### Table of Contents



Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
  The Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities
Exchange Act of 1934, as amended (the Exchange Act), provide a safe harbor for forward-looking
statements made by or on behalf of the Company. The Company and its representatives may from time
to time make written or oral statements that are forward-looking, including statements contained
in this report and other filings with the Securities and Exchange Commission (SEC) and in our
reports to stockholders. In some cases forward-looking statements can be identified by words such
as believe, expect, anticipate, plan, potential, continue or similar expressions. Such
forward-looking statements include risks and uncertainties and there are important factors that
could cause actual results to differ materially from those expressed or implied by such
forward-looking statements. These factors, risks and uncertainties can be found in Part I, Item
1A, Risk Factors section of the Companys Form 10-K for the fiscal year ended July 31, 2007.
 Although we believe the expectations reflected in our forward-looking statements are based
upon reasonable assumptions, it is not possible to foresee or identify all factors that could have
a material effect on the future financial performance of the Company. The forward-looking
statements in this report are made on the basis of managements assumptions and analyses, as of the
time the statements are made, in light of their experience and perception of historical conditions,
expected future developments and other factors believed to be appropriate under the circumstances.
 In addition, certain market data and other statistical information used throughout this report
are based on independent industry publications. Although we believe these sources to be reliable,
we have not independently verified the information and cannot guarantee the accuracy and
completeness of such sources.
 Except as otherwise required by the federal securities laws, we disclaim any obligation or
undertaking to publicly release any updates or revisions to any forward-looking statement contained
in this quarterly report on Form 10-Q and the information incorporated by reference in this report
to reflect any change in our expectations with regard thereto or any change in events, conditions
or circumstances on which any statement is based.
 Overview
   14




---



##### Table of Contents



® ® TM
 TM TM
 ® ® TM
 15




---



##### Table of Contents



Recent Developments
 ®
  TM
 New Product Sales
  Growth in Minimally Invasive Surgery Procedures
 TM TM ® ®
 16




---



##### Table of Contents



Demand Trends
  Pricing Trends
 TM
 Results Overview
  Our Business Strategy
  
    
    Introducing new technology that can be easily differentiated from our competition;
    
    Identifying microsurgical niches that may offer the prospect for substantial growth and
higher profit margins;
    
    Accelerating our international (including Canada) growth;
    
    Utilizing the breadth and depth of knowledge, experience and resources in our research and
development department;
    
    Branding and marketing a substantial portion of our neurosurgical products with the
Malis® trademark;
 17




---



##### Table of Contents




    
    Continuing to develop our distribution channels including the expansion of our domestic
ophthalmic sales force and development of an international direct ophthalmic sales force;
    
    Continuing to grow our disposables revenue stream;
    
    Expanding the Malis® AdvantageTM, the newest multifunctional bipolar
electrosurgical generator, into neurosurgery;
    
    Expanding the Malis® AdvantageTM, into other surgical markets;
    
    Expanding the use of the Omni®, our ultrasonic aspirator, into other surgical
markets, such as spinal surgery and the ENT markets; and
    
    Exploring opportunities for growth through strategic partnering with other companies, such as
our current relationships with Codman, an affiliate of Johnson & Johnson, Stryker, Quantel
Medical of France and Volk Optical, Inc.
 Results of Operations
 Three Month Period Ended April 30, 2008 Compared to Three Month Period Ended April 30, 2007
 Net Sales
  Quarter Ended,
    
    
    % IncreaseApril 30, 2008
    
    
    April 30, 2007
    
    
    (Decrease)Ophthalmic
    
    $
    7,293
    
    
    $
    6,523
    
    
    
    11.8
    %Neurosurgery
    
    
    3,368
    
    
    
    2,234
    
    
    
    50.8
    %OEM (Codman, Stryker and Iridex)
    
    
    2,612
    
    
    
    2,394
    
    
    
    9.1
    %Other
    
    
    227
    
    
    
    331
    
    
    
    (31.4
    %)Total
    
    $
    13,500
    
    
    $
    11,482
    
    
    
    17.6
    %
  ® TM ®
  18




---



##### Table of Contents



Quarter Ended April 30,2008
    
    
    2007
    
    
    % IncreaseUnited States (including OEM sales)
    
    $
    9,724
    
    
    $
    8,360
    
    
    
    16.3
    %International (including Canada)
    
    
    3,776
    
    
    
    3,122
    
    
    
    20.9
    %Total
    
    $
    13,500
    
    
    $
    11,482
    
    
    
    17.6
    %
  Gross Profit
  Operating Expenses
     19




---



##### Table of Contents



Other Expenses
  Operating Income, Income Taxes and Net Income
    20




---



##### Table of Contents



Nine Month Period Ended April 30, 2008 Compared to Nine Month Period Ended April 30, 2007
 Net Sales
  Nine Months Ended
    
    
    % IncreaseApril 30, 2008
    
    
    April 30, 2007
    
    
    (Decrease)Ophthalmic
    
    $
    20,520
    
    
    $
    17,752
    
    
    
    15.6
    %Neurosurgery
    
    
    8,912
    
    
    
    7,027
    
    
    
    26.8
    %OEM (including Codman, Stryker and Iridex)
    
    
    5,528
    
    
    
    6,941
    
    
    
    (20.4
    %)Other
    
    
    646
    
    
    
    1,021
    
    
    
    (36.7
    %)Total
    
    $
    35,606
    
    
    $
    32,741
    
    
    
    8.8
    %
  ® TM ®
   Nine Months Ended April 30,2008
    
    
    2007
    
    
    % IncreaseUnited States (Including OEM sales)
    
    $
    25,679
    
    
    $
    25,253
    
    
    
    1.7
    %International (including Canada)
    
    
    9,927
    
    
    
    7,488
    
    
    
    32.6
    %Total
    
    $
    35,606
    
    
    $
    32,741
    
    
    
    8.8
    %
  Gross Profit
  21




---



##### Table of Contents



Operating Expenses
      Other Expenses
  22




---



##### Table of Contents



Operating Income, Income Taxes and Net Income
    Liquidity and Capital Resources
      23




---



##### Table of Contents



Revolving Credit Facility:
 Non-U.S. Receivables Revolving Credit Facility
 Equipment Line of Credit
  Critical Accounting Policies
 
 24




---



##### Table of Contents



Item 3  Quantitative and Qualitative Disclosures about Market Risk
    
 Item 4  Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial reporting
  
 Part II  Other Information
 
 Item 1  Legal Proceedings
  25




---



##### Table of Contents



Item 1A  Risk Factors
  26




---



##### Table of Contents



Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3  Defaults Upon Senior Securities
  
 Item 4  Submission of Matters to a Vote of Security Holders
  
 Item 5  Other Information
  
 Item 6  Exhibits
 Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 Trademark Acknowledgements
  27




---



##### Table of Contents



SYNERGETICS USA, INC.
(Registrant)June 9, 2008
    /s/ Gregg D. SchellerGregg D. Scheller, President and ChiefExecutive Officer (Principal Executive
Officer)June 9, 2008
    /s/ Pamela G. BoonePamela G. Boone, Executive VicePresident, Chief Financial Officer, Secretary
and Treasurer (Principal Financial and
Principal Accounting Officer) 28