Synthetech, Inc. (OTC Bulletin Board: NZYM) today announced financial results for its fiscal fourth quarter and fiscal year, which ended March 31, 2010.
For the fourth quarter ended March 31, 2010, revenue was $4.2 million, a 37% decrease from revenue of $6.6 million for the same period last year. Gross income for the current quarter was $1.2 million, compared to gross income of $2.0 million for the same period last year. Operating income for the current quarter was $240,000, compared to $704,000 for the same period last year. Net income for the fourth quarter ended March 31, 2010 was $199,000, or $0.01 per share, compared to $657,000, or $0.04 per share, in last year's corresponding period.
The Company reported revenue of $15.2 million for fiscal 2010, a 23% decrease from revenue of $19.9 million in fiscal 2009. Gross income in fiscal 2010 was $5.2 million, compared to gross income in fiscal 2009 of $5.5 million. Operating income in fiscal 2010 was $1.4 million, compared to operating income in fiscal 2009 of $1.3 million. Net income for both fiscal 2010 and 2009 was $1.2 million, or $0.08 per share.
International sales, principally to Western Europe, were $7.1 million and $11.1 million in fiscal 2010 and 2009, respectively. International sales, like all of Synthetech's revenues, are subject to significant quarterly fluctuations based on the timing of customer's projects as they progress through the clinical trials process.
The Company's cash and cash equivalents were $1.1 million at March 31, 2010, compared to $588,000 at March 31, 2009. As of March 31, 2010, Synthetech's working capital was $7.3 million, compared to $5.9 million at March 31, 2009. The increase in working capital between the two periods is primarily the result of fiscal 2010 net income. As of March 31, 2010 and 2009, Synthetech had no outstanding borrowings under its line of credit.
Referring to Synthetech's results, President and Chief Executive Officer Dr. Gregory Hahn stated, "The frail economy and an uncertain regulatory environment combined to make fiscal 2010 a challenging year for us and our industry. Consistent with the industry environment, Synthetech's year-over-year revenue decreased 23% to $15.2 million in fiscal 2010. However, with only 77% of its fiscal 2009 revenue, Synthetech achieved solid net income of $1.2 million in fiscal 2010. This accomplishment was a direct result of our company-wide focus on cost reductions and production efficiencies, which enabled Synthetech to attain a level of profitability in fiscal 2010 on par with that of the previous year."
Looking forward, Dr. Hahn notes, "Our backlog of $1.3 million at March 31, 2010 reflects our customer's short order timeframes, particularly in the current market environment. In fiscal 2010, our Hepatitis C drug franchise business accounted for 25% of revenue compared to 29% in the prior year. We believe that our Hepatitis C products are in a temporary quiet period as our customers work through their clinical trials before reaching reorder points. In addition to these products and large-scale projects from our traditional pharmaceutical markets, we also anticipate additional opportunities to produce new specialty chemicals."
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