##### 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 January 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 Commission file number 000-51602
 SYNERGETICS USA, INC.
  Delaware
    
    20-5715943(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)3845 Corporate Centre DriveOFallon, Missouri
    
    63368(Address of principal executive offices)
    
    (Zip Code)
  (Registrants Telephone Number, Including Area Code)
 þ o
  o þ o
 o þ




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##### 



PagePART I
    
    Financial InformationItem 1.
    
    Unaudited Condensed Consolidated Financial StatementsBalance Sheets  January 30, 2007 and July 31, 2006
    
    3Statements of Income for the three months and six months ended January 30, 2007 and
January 30, 2006
    
    4Statements of Cash Flows for the six months ended January 30, 2007 and January 30, 2006
    
    5Notes to Unaudited Condensed Consolidated Financial Statements
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    21Item 4.
    
    Controls and Procedures
    
    21PART II
    
    Other InformationItem 1.
    
    Legal Proceedings
    
    22Item 1A.
    
    Risk Factors
    
    23Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    23Item 3.
    
    Defaults Upon Senior Securities
    
    23Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    23Item 5.
    
    Other Information
    
    24Item 6.
    
    Exhibits
    
    24SignaturesCertification of Chief Executive Officer Pursuant to Section 302Certification of Chief Financial Officer Pursuant to Section 302Certification of Chief Executive Officer Pursuant to Section 906Certification of Chief Financial Officer Pursuant to Section 906Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  2




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##### Table of Contents



Part I  Financial Information
 
 Item 1  Unaudited Condensed Consolidated Financial Statements
 Synergetics USA, Inc. and Subsidiaries
 
 Unaudited Condensed Consolidated Balance Sheets
As of January 30, 2007 and July 31, 2006
 (Dollars in thousands, except share data)
 January 30, 2007
    
    
    July 31, 2006AssetsCurrent AssetsCash and cash equivalents
    
    $
    636
    
    
    $
    557Investment in trading securities
    
    
    
    
    
    
    50Accounts receivable, net of allowance for
doubtful accounts of approximately $205
and $179, respectively
    
    
    7,267
    
    
    
    6,807Notes receivable, officer-stockholder
    
    
    7
    
    
    
    20Income taxes receivable
    
    
    660
    
    
    
    513Inventories
    
    
    14,314
    
    
    
    13,243Prepaid expenses
    
    
    501
    
    
    
    422Deferred income taxes
    
    
    416
    
    
    
    296Other
    
    
    16
    
    
    
    Total current assets
    
    
    23,817
    
    
    
    21,908Property and equipment, net
    
    
    8,215
    
    
    
    8,497Goodwill
    
    
    10,660
    
    
    
    10,660Other intangible assets, net
    
    
    10,254
    
    
    
    10,463Deferred expenses
    
    
    191
    
    
    
    83Cash value of life insurance
    
    
    33
    
    
    
    32Total assets
    
    $
    53,170
    
    
    $
    51,643Liabilities and Stockholders EquityCurrent LiabilitiesLines-of-credit
    
    $
    5,233
    
    
    $
    3,330Current maturities of long-term debt
    
    
    1,211
    
    
    
    967Current maturities of revenue bonds payable
    
    
    249
    
    
    
    249Accounts payable
    
    
    1,702
    
    
    
    2,255Accrued expenses
    
    
    1,646
    
    
    
    2,503Income taxes payable
    
    
    36
    
    
    
    Deferred revenue
    
    
    2
    
    
    
    6Total current liabilities
    
    
    10,079
    
    
    
    9,310Long-Term LiabilitiesLong-term debt, less current maturities
    
    
    3,372
    
    
    
    3,215Revenue bonds payable, less current maturities
    
    
    4,015
    
    
    
    4,140Deferred income taxes
    
    
    2,653
    
    
    
    2,663Deferred compensation
    
    
    
    
    
    
    10Total long-term liabilities
    
    
    10,040
    
    
    
    10,028Total liabilities
    
    
    20,119
    
    
    
    19,338Stockholders EquityCommon stock at January 30, 2007 and July 31, 2006,
$.001 par value, 50,000,000 shares authorized;
24,216,781 and 24,206,970 shares issued and
outstanding, respectively
    
    
    24
    
    
    
    24Additional paid-in capital
    
    
    23,986
    
    
    
    23,798Retained earnings
    
    
    9,041
    
    
    
    8,483Total stockholders equity
    
    
    33,051
    
    
    
    32,305Total liabilities and stockholders equity
    
    $
    53,170
    
    
    $
    51,643
  3




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##### Table of Contents



Synergetics USA, Inc. and Subsidiaries
 
 Unaudited Condensed Consolidated Statements of Income
Three and Six Months Ended January 30, 2007 and January 30, 2006
 (Dollars in thousands, except per share information)
 Three Months Ended
    
    
    Three Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJanuary 30, 2007
    
    
    January 30, 2006
    
    
    January 30, 2007
    
    
    January 30, 2006Sales
    
    $
    11,353
    
    
    $
    9,868
    
    
    $
    21,259
    
    
    $
    17,016Cost of sales
    
    
    4,975
    
    
    
    3,734
    
    
    
    8,678
    
    
    
    6,042Gross profit
    
    
    6,378
    
    
    
    6,134
    
    
    
    12,581
    
    
    
    10,973Operating expensesResearch and development
    
    
    640
    
    
    
    417
    
    
    
    1,188
    
    
    
    694Selling, general and administrative
    
    
    5,556
    
    
    
    4,261
    
    
    
    10,493
    
    
    
    8,0636,196
    
    
    
    4,678
    
    
    
    11,681
    
    
    
    8,757Operating income
    
    
    182
    
    
    
    1,456
    
    
    
    900
    
    
    
    2,217Other income (expense)Interest income
    
    
    
    
    
    
    6
    
    
    
    1
    
    
    
    18Interest expense
    
    
    (243
    )
    
    
    (162
    )
    
    
    (409
    )
    
    
    (197
    )Miscellaneous
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    (243
    )
    
    
    (156
    )
    
    
    (399
    )
    
    
    (180
    )Income before provision for income taxes
    
    
    (61
    )
    
    
    1,300
    
    
    
    501
    
    
    
    2,036Provision for income taxes
    
    
    23
    
    
    
    442
    
    
    
    209
    
    
    
    692Provision for re-enactment of the research and
experimentation credit
    
    
    (266
    )
    
    
    
    
    
    
    (266
    )
    
    
    (243
    )
    
    
    442
    
    
    
    (57
    )
    
    
    692Net income
    
    $
    182
    
    
    $
    858
    
    
    $
    558
    
    
    $
    1,344Earnings per share:Basic
    
    $
    0.01
    
    
    $
    0.04
    
    
    $
    0.02
    
    
    $
    0.08Diluted
    
    $
    0.01
    
    
    $
    0.04
    
    
    $
    0.02
    
    
    $
    0.08Basic weighted average common shares outstanding
    
    
    24,214,322
    
    
    
    23,934,251
    
    
    
    24,212,531
    
    
    
    17,196,651Diluted weighted average common shares
outstanding
    
    
    24,410,302
    
    
    
    24,148,395
    
    
    
    24,412,642
    
    
    
    17,413,406
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Synergetics USA, Inc. and Subsidiaries
 
 Unaudited Condensed Consolidated Statements of Cash Flows  Six Months Ended January 30, 2007 and January 30, 2006  (Dollars in thousands)
 Six Months Ended
    
    
    Six Months EndedJanuary 30, 2007
    
    
    January 30, 2006Cash Flows from Operating ActivitiesNet income
    
    $
    558
    
    
    $
    1,344Adjustments to reconcile net income to net cash used in operating activitiesDepreciation and amortization
    
    
    716
    
    
    
    613Provision for doubtful accounts receivable
    
    
    26
    
    
    
    (34
    )Stock-based compensation
    
    
    188
    
    
    
    447Deferred income taxes
    
    
    (130
    )
    
    
    Change in assets and liabilities, net of fiscal year 2006 acquisition of Valley Forge:(Increase) decrease in:Receivables, net
    
    
    (487
    )
    
    
    (1,722
    )Inventories
    
    
    (1,071
    )
    
    
    (2,206
    )Prepaid expenses
    
    
    (79
    )
    
    
    (145
    )Other current assets
    
    
    (162
    )
    
    
    (26
    )(Decrease) increase in:Accounts payable
    
    
    (553
    )
    
    
    672Accrued expenses and other liabilities
    
    
    (872
    )
    
    
    67Income taxes payable
    
    
    36
    
    
    
    (48
    )Net cash used in operating activities
    
    
    (1,830
    )
    
    
    (1,038
    )Cash Flows from Investing ActivitiesNet decrease in notes receivable, officer-stockholder
    
    
    13
    
    
    
    7Purchase of property and equipment
    
    
    (157
    )
    
    
    (2,282
    )Acquisition of patents and other intangibles
    
    
    (177
    )
    
    
    (61
    )Cash paid for reverse merger costs
    
    
    
    
    
    
    (515
    )Cash acquired through reverse merger
    
    
    
    
    
    
    2,024Sales of trading securities
    
    
    50
    
    
    
    (11
    )Net cash used in investing activities
    
    
    (271
    )
    
    
    (838
    )Cash Flows from Financing ActivitiesNet borrowings on lines-of-credit
    
    
    1,903
    
    
    
    387Principal payments on revenue bonds payable
    
    
    (124
    )
    
    
    (124
    )Proceeds from long-term debt
    
    
    919
    
    
    
    1,427Principal payments on long-term debt
    
    
    (286
    )
    
    
    (914
    )Payments on debt incurred for acquisition of trademark
    
    
    (232
    )
    
    
    (270
    )Proceeds from the exercise of stock options
    
    
    
    
    
    
    103Net cash provided by financing activities
    
    
    2,180
    
    
    
    609Net increase (decrease) in cash and cash equivalents
    
    
    79
    
    
    
    (1,267
    )Cash and cash equivalentsBeginning
    
    
    557
    
    
    
    1,817Ending
    
    $
    636
    
    
    $
    550
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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
  Reclassifications
 Segment information
 ® TM
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Note 3. Reverse Merger
  Assets:Cash, net of merger expenses of $892
    
    $
    1,132Accounts receivable
    
    
    703Inventories
    
    
    926Prepaid expenses and other current assets
    
    
    574Property and equipment
    
    
    324Other intangibles
    
    
    10,183Goodwill
    
    
    10,660Liabilities assumed:Accounts payable and accrued expenses
    
    
    (510
    )Income taxes payable
    
    
    (36
    )Note payable issued in connection with Malis® trademark
    
    
    (3,473
    )Deferred income taxes
    
    
    (2,496
    )Net assets acquired
    
    $
    17,987
   Six MonthsEndedJanuary 30, 2006Net sales
    
    $
    17,888Net income
    
    
    1,179Basic earnings per share
    
    
    0.05Diluted earnings per share
    
    
    0.05
  Note 4. Distribution Agreements
  Codman and Shurtleff, Inc. (Codman)
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®
  Note 5. Stock-Based Compensation
 Stock Option Plans
  Six Months Ended January 30, 2007Weighted-Average
    
    
    Weighted-Exercise
    
    
    AverageShares
    
    
    Price
    
    
    Fair ValueOptions outstanding, beginning of period
    
    
    416,750
    
    
    $
    1.98
    
    
    $
    1.64For the period from August 1, 2006 through January 30, 2007:Granted
    
    
    40,000
    
    
    $
    3.77
    
    
    $
    2.98Forfeited
    
    
    (4,590
    )
    
    $
    (1.09
    )
    
    $
    (0.91
    )Exercised
    
    
    
    
    
    $
    
    
    
    $
    Options outstanding, end of period
    
    
    452,160
    
    
    $
    2.15
    
    
    $
    1.76Options exercisable, end of period
    
    
    399,375
    
    
    $
    2.29
    
    
    $
    1.88
  Expected average risk-free interest rate
    
    
    4.0
    %Expected average life (in years)
    
    
    10Expected volatility
    
    
    71.5
    %Expected dividend yield
    
    
    0
    %
  Restricted Stock Plans
  8




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##### Table of Contents



Note 6: Supplemental Balance Sheets Information
 Inventories (Dollars in thousands)
 January 30,
    
    
    July 31,2007
    
    
    2006Raw material and component parts
    
    $
    6,539
    
    
    $
    5,614Work-in-progress
    
    
    2,626
    
    
    
    2,493Finished goods
    
    
    5,149
    
    
    
    5,136$
    14,314
    
    
    $
    13,243
 Property and equipment (Dollars in thousands)
 January 30,
    
    
    July 31,2007
    
    
    2006Land
    
    $
    730
    
    
    $
    730Building and improvements
    
    
    5,419
    
    
    
    5,340Machinery and equipment
    
    
    4,190
    
    
    
    4,196Furniture and fixtures
    
    
    593
    
    
    
    546Software
    
    
    114
    
    
    
    105Construction in process
    
    
    43
    
    
    
    11,089
    
    
    
    10,917Less accumulated depreciation
    
    
    2,874
    
    
    
    2,420$
    8,215
    
    
    $
    8,497
 Other intangible assets (Dollars in thousands)
  GrossCarrying
    
    
    AccumulatedValue
    
    
    Amortization
    
    
    NetJanuary 30, 2007Patents
    
    $
    967
    
    
    $
    211
    
    
    $
    756Proprietary know-how
    
    
    4,057
    
    
    
    539
    
    
    
    3,518Licensing agreements
    
    
    140
    
    
    
    83
    
    
    
    57Trademark
    
    
    5,923
    
    
    
    
    
    
    
    5,923$
    11,087
    
    
    $
    833
    
    
    $
    10,254
 July 31, 2006Patents
    
    $
    915
    
    
    $
    184
    
    
    $
    731Proprietary know-how
    
    
    4,057
    
    
    
    337
    
    
    
    3,720Licensing agreements
    
    
    140
    
    
    
    51
    
    
    
    89Trademark
    
    
    5,923
    
    
    
    
    
    
    
    5,923$
    11,035
    
    
    $
    572
    
    
    $
    10,463
   Years Ending July 31:
    
    Amount2007
    
    $
    2602008
    
    
    3582009
    
    
    3322010
    
    
    3052011
    
    
    302
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Pledged assets; short and long-term debt (excluding revenue bonds payable)
  Revolving Credit Facilities:
 Equipment Line of Credit:
  January 30,
    
    
    July 31,2007
    
    
    2006Note payable to bank, due in
monthly principal installments of
$1,139 plus interest at prime
rate plus 1% (an effective rate
of 8.25% as of January 30, 2007),
remaining balance due September
2007, collateralized by a second
deed of trust
    
    $
    158
    
    
    $
    165Note payable, due in monthly
installments of $509, including
interest at 4.9%, remaining
balance due May 2008,
collateralized by a vehicle
    
    
    6
    
    
    
    9Note payable to bank, due in
monthly principal installments of
$39,642 beginning November 2005
plus interest at a rate of 6.75%,
remaining balance due September
30, 2008, collateralized by
substantially all assets of the
Company
    
    
    793
    
    
    
    1,031Note 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
    
    
    881
    
    
    
    Note 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 $3,198,080,
including contractual interest
payments, due December 2011,
collateralized by the
Malis® trademark
    
    
    2,745
    
    
    
    2,9774,583
    
    
    
    4,182Less current maturities
    
    
    1,211
    
    
    
    967Long-term portion
    
    $
    3,372
    
    
    $
    3,215
 Note 7. Related Party Transactions
  10




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Note 8. Commitments and Contingencies
      et al inter alia
  11




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##### Table of Contents



Note 9. Segment Information
  SynergeticsSynergetics
    
    East
    
    ConsolidatedThree Months Ended January 30, 2007Net sales
    
    $
    9,646
    
    
    $
    1,707
    
    
    $
    11,353Operating income
    
    
    (116
    )
    
    
    298
    
    
    
    182Identifiable assets
    
    
    33,917
    
    
    
    19,253
    
    
    
    53,170
 Three Months Ended January 30, 2006Net sales
    
    $
    7,664
    
    
    $
    2,204
    
    
    $
    9,868Operating income
    
    
    898
    
    
    
    558
    
    
    
    1,456Identifiable assets
    
    
    23,257
    
    
    
    23,814
    
    
    
    47,071
 SynergeticsSynergetics
    
    East
    
    ConsolidatedSix Months Ended January 30, 2007Net sales
    
    $
    17,847
    
    
    $
    3,412
    
    
    $
    21,259Operating income
    
    
    313
    
    
    
    587
    
    
    
    900Identifiable assets
    
    
    33,917
    
    
    
    19,253
    
    
    
    53,170
 Six Months Ended January 30, 2006Net sales
    
    $
    14,055
    
    
    $
    2,961
    *
    
    $
    17,016Operating income
    
    
    1,554
    
    
    
    663
    *
    
    
    2,217Identifiable assets
    
    
    23,257
    
    
    
    23,814
    *
    
    
    47,071
 
 *
    
    For the period September 22, 2005 through January 30, 2006 12




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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, 2006.
 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 facts 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
    13




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® ® TM
 ® TM ® TM
 ® ® ® ® ® ® ®
  New Product Sales
  Growth in Minimally Invasive Surgery Procedures
 TM ® TM
 Demand Trends
  14




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##### Table of Contents



Pricing Trends
   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;
    
    Continuing to develop our distribution channels including the expansion of its domestic
ophthalmic sales force and development of an international direct ophthalmic sales force;
    
    Continuing to grow our disposables revenue stream;
    
    Introducing 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
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##### Table of Contents




    
    Exploring opportunities for growth through strategic partnering with other companies, such as
our current relationships with Codman & Shurtleff, Inc. (Codman), an affiliate of Johnson &
Johnson, Stryker Corporation (Stryker) and Quantel Medical of France (Quantel).
 Results of Operations
 Three Month Period Ended January 30, 2007 Compared to Three Month Period Ended January 30, 2006
 Net Sales
  Quarter Ended January 30
    
    
    % Increase2007
    
    
    2006
    
    
    (Decrease)Ophthalmic
    
    $
    5,958
    
    
    $
    5,805
    
    
    
    2.6
    %Neurosurgery
    
    
    4,357
    
    
    
    3,156
    
    
    
    38.1
    %Other
    
    
    1,038
    
    
    
    907
    
    
    
    14.4
    %$
    11,353
    
    
    $
    9,868
    
    
    
    15.0
    %
  ® TM
 TM
  Quarter Ended January 302007
    
    
    2006
    
    
    % IncreaseUnited States
    
    $
    8,856
    
    
    $
    7,768
    
    
    
    14.0
    %International (including Canada)
    
    
    2,497
    
    
    
    2,100
    
    
    
    18.9
    %$
    11,353
    
    
    $
    9,868
    
    
    
    15.0
    %
 ® TM ®
 Gross Profit
  16




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##### Table of Contents



Operating Expenses
   Other Expenses
  Operating Income, Income Taxes and Net Income
    Six Month Period Ended January 30, 2007 Compared to Six Month Period Ended January 30, 2006
  17




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##### Table of Contents



Net Sales
  Six Months Ended January 30
     
    
    % Increase2007
    
    
    2006

    
    
    (Decrease)Ophthalmic
    
    $
    11,229
    
    
    $
    11,176
    
    
    
    0.5
    %Neurosurgery
    
    
    8,108
    
    
    
    4,597
    
    
    
    72.0
    %Other
    
    
    1,922
    
    
    
    1,243
    
    
    
    54.6
    %$
    21,259
    
    
    $
    17,016
    
    
    
    24.9
    %
  ® TM
 TM
  Six Months Ended January 302007
    
    
    2006
    
    
    % IncreaseUnited States
    
    $
    16,893
    
    
    $
    13,376
    
    
    
    26.3
    %International (including Canada)
    
    
    4,366
    
    
    
    3,640
    
    
    
    19.9
    %$
    21,259
    
    
    $
    17,016
    
    
    
    24.9
    %
 ® TM ®
 Gross Profit
  Operating Expenses
  18




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##### Table of Contents



Other Expenses
  Operating Income, Income Taxes and Net Income
    19




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##### Table of Contents



Liquidity and Capital Resources
      ®
  Revolving Credit Facility:
 Equipment Line of Credit:
 20




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##### Table of Contents



Critical Accounting Policies
  
 Item 3  Quantitative and Qualitative Disclosures about Market Risk
    
 Item 4  Controls and Procedures
    21




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##### Table of Contents



Part II  Other Information
 
 Item 1  Legal Proceedings
      22




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##### Table of Contents



et al inter alia
    
 Item 1A  Risk Factors
  
 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
 (a)
    
    Synergetics USA, Inc.s annual meeting of stockholders was held on November 30, 2006.
Of the 24,206,970 shares entitled to vote at such meeting, 21,390,992 shares were present
at such meeting in person or by proxy.(b)
    
    All director nominees were elected.
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##### Table of Contents



(c)
    
    The stockholders elected each of the following directors at the meeting, and with
respect to each director, the number of share voted for and withheld were as follows:
 Number ofShares Voted For
    
    WithheldRobert H. Dick
    
    
    21,375,327
    
    
    
    15,665Juanita Hinshaw
    
    
    21,264,986
    
    
    
    126,006
 (d)
    
    None
 
 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
  24




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##### Table of Contents



SYNERGETICS USA, INC.
(Registrant)March 9, 2007
    
    /s/ Gregg D. SchellerGregg D. Scheller, President and Chief
Executive Officer (Principal Executive
Officer)March 9, 2007
    
    /s/ Pamela G. BoonePamela G. Boone, Executive Vice
President, Chief Financial Officer, Secretary
and Treasurer (Principal Financial and
Principal Accounting Officer)
 25