<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
[ ] 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 0-12992
SYNTHETECH, INC.
(Exact name of registrant as specified in its charter)
Oregon 84-0845771
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
1290 Industrial Way, Albany, Oregon 97321
(Address of Principal Executive Offices) (Zip Code)
(541) 967-6575
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No_____
The number of shares of the registrant's common stock, $.001
par value, outstanding as of November 1, 2000 was 14,276,641.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
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SYNTHETECH, INC.
BALANCE SHEETS
------------------
(unaudited)
September 30, March 31,
2000 2000
----------------------------------------- ------------- -----------
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 7,182,000 $ 6,404,000
Accounts receivable, less allowance
for doubtful accounts of $15,000 for
both periods 430,000 2,433,000
Income tax receivable 676,000 137,000
Inventories 4,356,000 4,112,000
Prepaid expenses 225,000 285,000
Deferred income taxes 140,000 140,000
Other current assets 1,000 31,000
----------- -----------
TOTAL CURRENT ASSETS 13,010,000 13,542,000
PROPERTY, PLANT AND EQUIPMENT, at cost, net 13,006,000 13,375,000
----------- -----------
TOTAL ASSETS $26,016,000 $26,917,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 3
<TABLE>
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SYNTHETECH, INC.
BALANCE SHEETS
----------------
(continued)
(unaudited)
September 30, March 31,
2000 2000
---------------------------------------------- ------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------
CURRENT LIABILITIES:
Current portion of note payable $ 16,000 $ 17,000
Accounts payable 319,000 547,000
Accrued compensation 105,000 109,000
Deferred revenue 44,000 544,000
Other accrued liabilities 7,000 25,000
------------ -----------
TOTAL CURRENT LIABILITIES 491,000 1,242,000
DEFERRED INCOME TAXES 482,000 482,000
NOTE PAYABLE, net of current portion 128,000 135,000
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value; authorized
100,000,000 shares; issued and outstanding,
14,277,000 shares for both periods 14,000 14,000
Paid-in capital 8,803,000 8,793,000
Deferred compensation (37,000) (40,000)
Retained earnings 16,135,000 16,291,000
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 24,915,000 25,058,000
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $26,016,000 $26,917,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SYNTHETECH, INC.
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
For the Three Months Ended For the Six Months Ended
September 30, September 30,
2000 1999 2000 1999
-------------------------------------- ----------- ----------- ----------- ----------- -
REVENUES $ 1,082,000 $ 3,370,000 $ 3,780,000 $ 8,006,000
COST OF SALES 1,491,000 2,005,000 3,229,000 4,634,000
----------- ----------- ----------- -----------
GROSS PROFIT (LOSS) (409,000) 1,365,000 551,000 3,372,000
RESEARCH AND DEVELOPMENT 131,000 121,000 226,000 248,000
SELLING, GENERAL AND ADMINISTRATIVE 322,000 289,000 679,000 632,000
----------- ----------- ---------- -----------
OPERATING EXPENSE 453,000 410,000 905,000 880,000
----------- ----------- ---------- -----------
OPERATING INCOME (LOSS) (862,000) 955,000 (354,000) 2,492,000
OTHER INCOME, net 115,000 89,000 108,000 176,000
INTEREST EXPENSE (3,000) (4,000) (6,000) (7,000)
----------- ----------- ---------- -----------
INCOME (LOSS) BEFORE INCOME TAXES (750,000) 1,040,000 (252,000) 2,661,000
PROVISION (BENEFIT) FOR INCOME TAXES (285,000) 395,000 (96,000) 1,011,000
----------- ----------- ---------- -----------
NET INCOME (LOSS) $ (465,000) $ 645,000 $ (156,000) $ 1,650,000
=========== =========== ========== ===========
BASIC EARNINGS (LOSS) PER COMMON SHARE ($0.03) $0.05 ($0.01) $0.12
===== ===== ===== =====
DILUTED EARNINGS (LOSS) PER COMMON SHARE ($0.03) $0.05 ($0.01) $0.12
===== ===== ===== =====
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
SYNTHETECH, INC.
STATEMENTS OF CASH FLOWS
--------------------------
(unaudited)
For the Six Month Period Ended September 30 2000 1999
---------------------------------------------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (156,000) $ 1,650,000
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, amortization and other 1,327,000 785,000
Amortization of deferred compensation 14,000 23,000
Loss on disposal of property, plant and equipment - 3,000
Proceeds from stock option exercises and
disqualifying dispositions - 11,000
(Increase) decrease in assets:
Accounts receivable, net 2,003,000 1,088,000
Inventories (244,000) 117,000
Prepaid expenses 60,000 (111,000)
Income tax receivable (539,000) -
Other assets 30,000 (15,000)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (250,000) (1,843,000)
Deferred revenue (500,000) 37,000
----------- -----------
Net cash provided by operating activities 1,745,000 1,745,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment purchases, net (959,000) (1,633,000)
----------- -----------
Net cash used in investing activities (959,000) (1,633,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term debt obligations (8,000) (8,000)
----------- -----------
Net cash used in financing activities (8,000) (8,000)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 778,000 104,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD $ 6,404,000 $ 7,470,000
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,182,000 $ 7,574,000
=========== ===========
NON-CASH INVESTING ACTIVITIES:
Issuance of stock options at below fair value $ 11,000 $ 4,000
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS
NOTE A. GENERAL AND BUSINESS
The summary financial statements included herein have been
prepared, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although Synthetech management believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these summary financial
statements be read in conjunction with the financial statements
and the notes thereto included in Synthetech's fiscal 2000 Form
10-K.
Interim financial statements are by necessity somewhat
tentative; judgments are used to estimate quarterly amounts for
items that are normally determinable only on an annual basis.
For example, provision for income taxes is an estimate of the
annual liability pro-rated over the quarters of the fiscal year
based on estimates of annual income. Further, all inventory
quantities are verified by physically counting the units on hand
at least once a year. Normally, selected inventory items are
cycle counted during each quarter. For those inventories not
counted during the quarter, quantities are determined using
measured sales and production data for the period.
The interim period information included herein reflects all
adjustments which are, in the opinion of Synthetech management,
necessary for a fair statement of the results of the respective
interim periods. Results of operations for interim periods are
not necessarily indicative of results to be expected for an
entire year.
NOTE B. STATEMENTS OF CASH FLOWS
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Supplemental cash flow disclosures for the six month period ended
September 30:
Cash Paid
---------
Three Months Six Months
------------ ----------
2000 1999 2000 1999
---- ---- ---- ----
Income Taxes $ 389,000 $ 1,082,000 $ 443,000 $ 1,572,000
Interest $ 3,000 $ 4,000 $ 6,000 $ 7,000
</TABLE>
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE C. EARNINGS PER SHARE
Basic earnings per share (EPS) are computed by dividing net
income by the weighted average number of shares of common stock
outstanding during the period. Diluted earnings per share are
computed by dividing net income by the weighted average number of
shares of common stock and common stock equivalents outstanding
during the period, calculated using the treasury stock method as
defined in SFAS No. 128. The following is a reconciliation of
the shares used to calculate basic earnings per share and diluted
earnings per share:
<TABLE>
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<S> <C> <C> <C> <C>
For the Three For the Six
Months Ended Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Weighted average shares
outstanding for Basic EPS 14,276,641 14,254,630 14,276,641 14,253,376
Dilutive effect of
common stock options
issuable under
treasury stock method - 51,566 - 59,507
----------- ---------- ---------- ----------
Weighted average common
and common equivalent
shares outstanding for
Diluted EPS 14,276,641 14,306,196 14,276,641 14,312,883
========== ========== ========== ==========
The following common stock equivalents were excluded from the
earnings per share computation because their effect would have
been anti-dilutive:
For the Three For the Six
Months Ended Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
Common stock options
outstanding 700,666 523,800 702,858 523,800
</TABLE>
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS (continued)
NEW ACCOUNTING PRONOUNCEMENT
In June 1999, the FASB issued Statement of Financial Accounting
Standards No. 137, "Accounting for Derivative Instruments and
Hedging Activities" ("SFAS 137"). SFAS 137 is an amendment to
Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities." SFAS 137
establishes accounting and reporting standards for all derivative
instruments. SFAS 137 is effective for fiscal years beginning
after June 15, 2000. The Company does not currently have any
derivative instruments and, accordingly, does not expect the
adoption of SFAS 137 to have an impact on its financial position
or results of operations.
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the
percentage of revenues represented by each item included in the
Statements of Operations.
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Percentage of Revenues
------------------------
For the Tree Months For the Six Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
----------------------------- ---- ---- ---- ----
Revenues 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 137.8 59.5 85.4 57.9
------ ------ ------ ------
Gross Profit (Loss) (37.8) 40.5 14.6 42.1
Research and Development 12.1 3.6 6.0 3.1
Selling, General and
Administration 29.8 8.6 18.0 7.9
------ ------ ------ ------
Operating Expense 41.9 12.2 24.0 11.0
Operating Income (Loss) (79.7) 28.3 (9.4) 31.1
Other Income 10.6 2.6 2.9 2.2
Interest Expense (0.3) (0.1) (0.2) (0.1)
------ ------ ------ ------
Income (Loss) Before Income Taxes (69.4) 30.8 (6.7) 33.2
Provision (Benefit) For Income Taxes (26.3) 11.7 (2.5) 12.6
------ ------ ------ ------
Net Income (Loss) (43.1) % 19.1 % (4.2) % 20.6 %
======= ======= ======= =======
</TABLE>
Revenues
--------
Revenues decreased by 68% to $1.08 million in the second quarter
of fiscal 2001 from $3.37 million in the second quarter of fiscal
2000. Revenue in the second quarter of fiscal 2001 included
$282,000 related to closure fees associated with one order.
Revenues were $3.78 million for the first half of fiscal 2001, a
53% decrease from revenues of $8.01 million in the first half of
fiscal 2000. International sales were $385,000 and $712,000 for
the second quarter and first half of fiscal 2001, respectively,
as compared to $2.55 million and $5.56 million for the second
quarter and first half of fiscal 2000, respectively. These sales
were mainly to Europe in the first half of fiscal 2001 and mainly
to Europe and Mexico in the first half of fiscal 2000.
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
The decrease in revenues for the second quarter of fiscal 2001
from the second quarter of fiscal 2000 reflected the
unpredictable ordering cycles inherent in drug development
projects. In addition, the Company did not complete a new
$300,000 pilot project on schedule due to unexpected processing
delays, resulting in a shift of this revenue from the second
quarter of fiscal 2001 to the third quarter of fiscal 2001. The
decrease in revenues for the first half of fiscal 2001 from the
first half of fiscal 2000 reflected the absence of revenue from
large scale orders, as well as the unpredictable ordering cycles
inherent in drug development projects. Looking ahead to the
second half of fiscal 2001, the Company is encouraged by the
recent receipt of over $2 million of new orders, with one of
these projects likely to require additional amounts during this
fiscal year. The Company also continues to be a supplier of
PBBs for several other pharmaceutical development projects
advancing through clinical trials and these projects could have
substantial future business potential. There are, however, many
factors affecting the success of all drug projects and
Synthetech's involvement. (See "Industry Factors" below.)
The Company's strong balance sheet has allowed it to weather the
current level of business without hindering long-term strategic
direction. Synthetech continues to invest in the necessary
infrastructure and organizational resources. (See "Liquidity and
Capital Resources" below.)
Gross Profit (Loss)
-------------------
Cost of sales for the second quarter of fiscal 2001 was $1.49
million, resulting in a gross loss of $409,000. While the
Company's pricing strategy incorporates a gross profit margin,
the low level of revenue for the second quarter of fiscal 2001
caused a negative gross profit since cost of sales includes all
labor, facility and similar expenses incurred by the Company's
manufacturing department during the period-not just those
expenses directly allocated to manufacturing the Company's
products sold during the period. By comparison, a significantly
higher level of revenue for the second quarter of fiscal 2000
created a gross profit of $1.37 million for that quarter. Gross
profit for the first half of fiscal 2001 decreased to $551,000
from $3.37 million for that same period of fiscal 2000. As a
percentage of sales, gross profit decreased to 15% in the first
half of fiscal 2001 from 42% of revenues for the same period of
fiscal 2000.
The negative gross profit margin for the second quarter of fiscal
2001 and lower gross profit margin for the first half of fiscal
2001 as compared to the gross profit margins for the second
quarter and first half in fiscal 2000 primarily reflected the
downward pressure caused by a lower level of revenues and the
increased manufacturing overhead costs associated with the second
phase expansion of the new plant.
Operating Expenses
------------------
Research and development (R&D) expenses were $131,000 and
$226,000 in the second quarter and first half of fiscal 2001,
respectively, compared to $121,000 and $248,000 in the second
quarter and first half of fiscal 2000, respectively. As a
percentage of sales, R&D expenses increased to 12% in the second
quarter of fiscal 2001 from 4% in the same period of fiscal 2000
and increased to 6% for the first half fiscal 2001 as compared to
3% in the first half of fiscal 2000. The fluctuations of R&D
expenses during the periods principally reflected the absence or
presence of one-time costs associated with employee hiring and,
to a lesser extent, slight variations in employee head count.
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
SG&A expenses increased to $322,000 and $679,000 in the second
quarter and first half of fiscal 2001, respectively, from
$289,000 and $632,000 in the second quarter and first half of
fiscal 2000, respectively. As a percentage of sales, SG&A
expenses increased to 30% in the second quarter of fiscal 2001 as
compared to 9% in the second quarter of fiscal 2000, and
increased to 18% for the first half of fiscal 2001 as compared to
8% in the same period of fiscal 2000. The increase as a
percentage of sales in the second quarter and first half of
fiscal 2001 as compared to the second quarter and first half of
fiscal 2000 was primarily attributable to lower revenues.
Operating Income (Loss)
-----------------------
Operating loss in the second quarter and first half of fiscal
2001 was $862,000 and $354,000, respectively, compared with
operating income in the second quarter and first half of fiscal
2000 of $955,000 and $2.49 million, respectively. The operating
loss for the second quarter and first half of fiscal 2001
reflected the substantial decrease in revenues from the prior
periods.
Other Income
------------
Other income in the second quarter and first half of fiscal 2001
was $115,000 and $108,000, respectively, compared to $89,000 and
$176,000, respectively, for the second quarter and first half of
fiscal 2000. Other income in the second quarter of fiscal 2001
primarily reflected interest earnings. Other income in first half
of fiscal 2001 included $215,000 in interest earnings offset by a
$107,000 equipment write down. The other income in the second
quarter and first half of fiscal 2000, respectively, primarily
reflected interest earnings.
Net Income (Loss)
-----------------
For the second quarter of fiscal 2001, the Company incurred a
loss before income taxes of $750,000. In light of this loss,
the Company received an income tax benefit of $285,000 for that
quarter. This resulted in a net loss of $465,000 for the second
quarter of fiscal 2001. For the first half of fiscal 2001, the
Company incurred a loss before income taxes of $252,000. In
light of this loss, the Company received an income tax benefit of
$96,000 for that period. This resulted in a net loss of $156,000
for the first half of fiscal 2001.
<PAGE> 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
INDUSTRY FACTORS
The market for PBBs is driven by the market for synthetically
manufactured peptide, peptidomimetic small molecule and other
drugs in which they are incorporated. The drug development
process for these drugs is dictated by the marketplace, drug
companies and the regulatory environment. The Company has no
control over the pace of these drug development efforts, which
drugs get selected for clinical trials, which drugs are approved
by the FDA and, even if approved, the ultimate market potential
of such drugs.
The three stages of the drug development process include: R&D or
discovery stage, clinical trial stage and marketed drug stage.
Synthetech's customers can spend years researching and developing
new drugs, taking only a small percentage to clinical trials and
fewer yet to commercial market. A substantial amount of the
activity continues to occur at the earlier stages of research and
development and clinical trials. The market for peptide and
peptidomimetic small molecule drugs is still very early in
development.
Recurring sales of PBBs for development programs is sporadic at
best. The high cancellation rate for drug development programs
results in a significant likelihood that there will be no
subsequent or "follow-on" PBB sales for any particular drug
development program. Accordingly, the level of purchasing by the
Company's customers for specific drug development programs varies
substantially from quarter to quarter and the Company cannot rely
on any one customer as a constant source of revenue.
The size of the PBB orders for marketed drugs can be
substantially larger than those for the discovery or clinical
trial stages. Sales of PBBs for marketed drugs can also provide
an opportunity for continuing longer-term sales. While not
subject to the same high cancellation rate faced by discovery and
clinical trial stage drug development programs, the demand for
the approved drugs, however, remains subject to many
uncertainties, including, without limitation, the drug price, the
drug side effects and the existence of other competing drugs.
These factors, which are outside of the control of the Company,
will affect the level of demand for the drug itself and,
therefore, the demand for PBBs. Also, industry cost pressures can
cause pharmaceutical companies to explore and, as was the case
with one of the large-scale orders, ultimately adopt alternative
manufacturing processes which do not include the Company's PBBs
as an intermediate. Finally, with the longer-term, larger-scale
orders, the Company expects increased competition to supply these
PBBs.
Accordingly, these industry factors create an inability for the
Company to predict future demand beyond its current order base.
Until the Company develops a stable baseload of demand, the
Company is likely to continue to experience significant
fluctuations in its quarterly results.
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2000, the Company had working capital of $12.52
million compared to $12.30 million at March 31, 2000. The
Company's cash and cash equivalents at September 30, 2000 totaled
$7.18 million. The Company does not invest in derivative
securities. In addition, the Company had a $1 million unsecured
bank line of credit of which there was no amount outstanding at
September 30, 2000.
The decrease in accounts receivable to $430,000 at September 30,
2000 from $2.43 million at March 31, 2000 reflected the lower
level of shipments during the second quarter of fiscal 2001. The
increase in income tax receivable to $676,000 at September 30,
2000 from $137,000 at March 31, 2000 reflected the tax benefit
for the second quarter of fiscal 2001. The increase in inventory
to $4.36 million at September 30, 2000 from $4.11 million at
March 31, 2000 included approximately $400,000 of additional work
in process of certain products being manufactured in anticipation
of future orders. This increase was offset somewhat by a
reduction in the level of raw materials held in inventory. The
decrease in accounts payable to $319,000 at September 30, 2000
from $547,000 at March 31, 2000 primarily reflected the reduction
of expenditure commitments related to the second phase of the
plant expansion and timing of raw material purchases. The
decrease in deferred revenue to $44,000 at September 30, 2000
from $544,000 at March 31, 2000 resulted from the recognition of
revenue associated with a $500,000 customer advance payment.
The Company had approximately $959,000 of capital expenditures
during the first half of fiscal 2001 which included $361,000 for
equipment and equipment upgrades in the existing plant, $390,000
for the second-phase of the new plant expansion, $164,000 for the
R&D lab remodel design, and $44,000 for preliminary design work
relating to wastewater treatment capabilities. The Company
anticipates fiscal 2001 capital expenditures for the existing
plant and the completion of the second-phase of the new plant
expansion to be $700,000 and $400,000, respectively. The Company
is also investing an additional $1.2 million in upgrades to the
R&D labs. The completion of the R&D lab remodel is scheduled for
summer of 2001. The Company is also considering investing
roughly $1 million in on-site wastewater treatment capabilities.
The Company expects to finance all capital expenditures from
internal cash flow and does not anticipate the need for any new
debt or equity financing.
_____________________________
This Form 10-Q includes "forward-looking" information (as defined
in Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934). Investors are cautioned
that forward-looking statements involve risks and uncertainties,
and various factors could cause actual results to differ
materially from those in the forward-looking statements. Forward-
looking statements include, without limitation, any statement
that may predict, forecast, indicate or imply future results,
performance or achievements, and may contain the words "believe,"
"anticipate," "expect," "estimate," "project," "will be," "will
continue," "will likely result," or words or phrases of similar
meanings. The risks and uncertainties include, but are not
limited to, the following: the uncertain market for products,
customer concentration, potential quarterly revenue fluctuations,
industry cost factors, competition, government regulation,
product liability risks, technological change, increased costs
associated with the
<PAGE> 14
Company's facility expansions, international business risks, and
Y2K risks. Investors are directed to the Company's filings with
the Securities and Exchange Commission, including the Company's
Form 10-K for the fiscal year ended March 31, 2000, which are
available from the Company without charge, for a further
description of the risks and uncertainties related to forward-
looking statements made by the Company as well as to other
aspects of the Company's business.
<PAGE> 15
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
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The Company held its Annual Meeting of Shareholders on July
20, 2000. At that meeting, the following proposals were approved
by the Shareholders:
Proposal #1: Election of Directors
Class/Name Votes For Votes Withheld
---------- --------- --------------
Class III Directors (term expiring in 2003):
Howard L. Farkas 12,337,125 496,079
M. ("Sreeni") Sreenivasan 12,353,025 480,179
Continuing Directors
Class/Name
----------
Class I Directors (term expiring in 2001):
Paul C. Ahrens
Page E. Golsan, III
Class II Directors (term expiring in 2002):
Edward M. Giles
Charles B. Williams
Proposal #2: Approval of the 2000 Employee Stock Purchase Plan
For Against Abstain Broker non-vote
--- ------- ------- ---------------
12,539,039 244,483 48,982 10,871
Proposal #3: Approval of the 2000 Stock Incentive Plan
For Against Abstain Broker non-vote
--- ------- ------- ---------------
12,026,062 727,193 79,949 10,871
</TABLE>
<PAGE> 16
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3(i)(1) Articles of Incorporation of Synthetech, Inc., as amended.
3(ii)(2) Bylaws of Synthetech, Inc., as amended.
27 Financial Data Schedule
__________________
(1) Incorporated by reference herein from the Company's Form 10-KSB
for the year ended March 31, 1997.
(2) Incorporated by reference herein from the Company's Form 10-Q for
the period ended June 30, 2000.
(b) Reports
No reports on Form 8-K were filed during the quarter.
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SYNTHETECH, INC.
(Registrant)
Date: November 2, 2000 /s/ M. Sreenivasan
M. Sreenivasan
President & C.E.O.
Date: November 2, 2000 /s/ Charles B. Williams
Charles B. Williams
Vice President, Finance
and Administration, C.F.O.,
Chief Accounting Officer
