-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D/dJRxLAwCyDPpBLUTZ1wWV+qRUviHutexqe/gk2crAHrBmtmaAluk+GpAHybhgP eaCPLxrcvj/MC5Emc/D4Xw== 0000950130-98-002678.txt : 19980518 0000950130-98-002678.hdr.sgml : 19980518 ACCESSION NUMBER: 0000950130-98-002678 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNETIC INC CENTRAL INDEX KEY: 0000850436 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 222975182 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-17822 FILM NUMBER: 98624066 BUSINESS ADDRESS: STREET 1: 669 RIVER DRIVE CITY: ELMWOOD PARK STATE: NJ ZIP: 07407-1361 BUSINESS PHONE: 2017033400 MAIL ADDRESS: STREET 1: 669 RIVER DRIVE CITY: ELMWOOD PARK STATE: NJ ZIP: 07407-1361 10-Q 1 FORM 10-Q 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 March 31, 1998 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 0-17822 SYNETIC, INC. (Exact name of registrant as specified in its charter) Delaware 22-2975182 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) River Drive Center 2 669 River Drive Elmwood Park, New Jersey 07407 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (201) 703-3400 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at May 13,1998 - ------------------------ -------------------------- Common Stock 17,732,366 shares par value $.01 per share SYNETIC, INC. AND SUBSIDIARIES Index ----- Page ---- Part I. FINANCIAL INFORMATION: Item 1. Financial Statements Consolidated Balance Sheets -- March 31, 1998 and June 30, 1997 3 Consolidated Statements of Income -- Nine Months Ended March 31, 1998 and 1997 5 Consolidated Statements of Cash Flows -- Nine Months Ended March 31, 1998 and 1997 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9 Part II. OTHER INFORMATION Item 1. Legal Proceedings 11 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 6. Exhibits and Reports on Form 8-K 15 -------------------------------------------------- This report contains certain forward-looking statements and information relating to Synetic, Inc. (the "Company" or "Synetic") that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this report, the words "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company or the Company's management, are intended to identify forward-looking statements. Such statements reflect the current view of the Company's management with respect to future events and the Company's future performance and are subject to certain risks, uncertainties and assumptions. Should management's current view of the future or underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not intend to update these forward-looking statements. SYNETIC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) ASSETS
March 31, June 30, 1998 1997 ----------- --------- (unaudited) CURRENT ASSETS: Cash and cash equivalents............. $ 82,921 $ 77,303 Marketable securities................. 3,206 11,765 Accounts receivable, net of allowances for doubtful accounts and sales returns of $783 and $739 at March 31, 1998 and June 30, 1997, respectively.................. 10,534 9,094 Inventories........................... 5,915 5,505 Other current assets.................. 11,263 9,233 -------- -------- Total current assets................ 113,839 112,900 -------- -------- PROPERTY, PLANT AND EQUIPMENT: Land and improvements................. 1,603 1,613 Building and improvements............. 10,659 9,911 Machinery and equipment............... 26,492 23,444 Furniture and fixtures................ 3,616 3,283 Construction in progress.............. 4,667 2,516 -------- -------- 47,037 40,767 Less: Accumulated depreciation....... (21,019) (18,681) -------- -------- Property, plant and equipment, net.. 26,018 22,086 -------- -------- OTHER ASSETS: Marketable securities................. 227,044 226,760 Other................................. 20,276 20,357 -------- -------- Total other assets 247,320 247,117 -------- -------- $387,177 $382,103 ======== ========
The accompanying notes are an integral part of these consolidated balance sheets. -3- SYNETIC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, June 30, 1998 1997 ---------- --------- (unaudited) CURRENT LIABILITIES: Accounts payable............................... $ 2,101 $ 2,344 Accrued liabilities............................ 15,533 14,203 Income taxes payable........................... 2,597 3,044 -------- -------- Total current liabilities..................... 20,231 19,591 -------- -------- LONG-TERM DEBT, LESS CURRENT PORTION............ 159,500 165,000 DEFERRED TAXES AND OTHER LIABILITIES............ 5,692 8,776 STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued........................................ - - Common stock $.01 par value; 100,000,000 and 50,000,000 shares authorized; 22,968,657 and 22,865,149 shared issued; 17,700,194 and 17,564,980 shares issued and outstanding at March 31, 1998 and June 30, 1997, respectively.................................. 230 229 Paid-in capital................................ 201,893 196,212 Treasury stock, at cost; 5,268,463 and 5,300,169 shares at March 31, 1998 and June 30, 1997, respectively................... (38,287) (39,462) Retained earnings.............................. 37,918 31,757 -------- -------- Total stockholders' equity.................... 201,754 188,736 -------- -------- $387,177 $382,103 ======== ========
The accompanying notes are an integral part of these consolidated balance sheets. -4- SYNETIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Quarters and Nine Months Ended March 31, 1998 and 1997 (in thousands, except per share data) (unaudited)
Quarters Ended Nine Months Ended March 31, March 31, 1998 1997 1998 1997 ---------- ---------- --------- --------- Net sales.............................. $16,437 $ 14,243 $ 46,710 $ 37,327 Cost of sales........................ 8,615 7,852 24,986 20,326 Selling, general and administrative.. 6,983 6,653 20,735 14,211 Interest and other income............ (5,128) (3,260) (15,732) (7,795) Interest expense..................... 2,118 929 6,496 934 Other expense........................ - 3,585 - 32,185 ------- -------- -------- -------- 12,588 15,759 36,485 59,861 ------- -------- -------- -------- Income (loss) before provision for income taxes..................... 3,849 (1,516) 10,225 (22,534) Provision for income taxes............. 1,473 904 4,064 3,431 ------- -------- -------- -------- Net income (loss)...................... $ 2,376 $( 2,420) $ 6,161 $(25,965) ======= ======== ======== ======== Net income per share-basic: Net income (loss) per share.......... $ .13 $ (.14) $ .35 $ (1.52) ======= ======== ======== ======== Weighted average shares outstanding.. 17,678 17,491 17,652 17,058 ======= ======== ======== ======== Net income per share-diluted: Net income (loss) per share.......... $ .12 $ (.14) $ .32 $ (1.52) ======= ======== ======== ======== Weighted average shares outstanding.. 19,894 17,491 19,558 17,058 ======= ======== ======== ========
The accompanying notes are an integral part of these consolidated statements. -5- SYNETIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended March 31, 1998 and 1997 (in thousands) (unaudited)
1998 1997 --------- ---------- Cash flows from operating activities: Net income (loss)................................. $ 6,161 $ (25,965) Adjustments to reconcile net income to net cash provided by operating activities: Write-off of purchased research and development costs........................... - 32,185 Depreciation, amortization and other......... 2,612 1,962 Changes in operating assets and liabilities: Accounts receivable, net..................... (1,440) (334) Inventories.................................. (410) (497) Other assets................................. (2,979) (1,845) Accounts payable............................. (243) 352 Accrued liabilities.......................... 897 753 Income taxes payable......................... 4,226 4,013 Other liabilities............................ (3,084) - -------- --------- Net cash provided by operating activities...................... 5,740 10,624 -------- --------- Cash flows from investing activities: Sales of marketable securities.................... 99,542 345,171 Purchase of marketable securities................. (91,267) (443,027) Capital expenditures.............................. (6,270) (3,174) Acquisition of businesses, net of cash acquired... - (10,744) -------- --------- Net cash provided by (used for) investing activities...................... 2,005 (111,774) -------- --------- Cash flows from financing activities: Payments for treasury stock....................... - (1,712) Payments for extinguishment of debt............... (4,842) - Proceeds from exercises of stock options and 401(k) purchases................................ 2,715 2,494 Proceeds from issuance of convertible debentures net of underwriting discount.................... - 160,890 -------- --------- Net cash (used for) provided by financing activities...................... (2,127) 161,672 -------- --------- Net increase in cash and cash equivalents.......... 5,618 60,522 Cash and cash equivalents, beginning of period..... 77,303 22,210 -------- --------- Cash and cash equivalents, end of period........... $ 82,921 $ 82,732 ======== =========
The accompanying notes are an integral part of these consolidated statements. -6- SYNETIC, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Financial statement presentation: In the opinion of management, the accompanying consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of Synetic, Inc. and subsidiaries (the "Company") as of March 31, 1998 (unaudited) and June 30, 1997 (audited), the results of their operations for the nine months ended March 31, 1998 and 1997 (unaudited) and the results of their operations and their cash flows for the nine months ended March 31, 1998 and 1997 (unaudited). Principles of Consolidation-- The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned operating subsidiaries, Porex Corporation and subsidiaries ("Porex"), Avicenna Systems Corp. ("Avicenna") and CareAgents, Inc.("CareAgents"), after elimination of all material intercompany accounts and transactions. The accounting policies followed by the Company are set forth in the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997 (the "1997 10-K"), which notes are incorporated herein by reference. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full fiscal year. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. (2) Inventories: Inventories consisted of the following (in thousands):
March 31, June 30, 1998 1997 --------- -------- (unaudited) Raw materials and supplies.. $2,952 $2,672 Work-in-process............. 671 347 Finished goods.............. 2,292 2,486 ------ ------ $5,915 $5,505 ====== ======
(3) Marketable securities: At March 31, 1998 and June 30, 1997, marketable securities consisted primarily of U.S. Treasury Notes and Federal Agency Notes. (4) Computation of net income (loss) per share: Effective with the quarter ended December 31, 1997, the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No. 128"). The new standard simplifies the computation of net income per share and increases comparability to international standards. Under SFAS No. 128, basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted -7- net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Dilutive securities consist of common stock which may be issuable upon exercise of outstanding stock options as calculated using the treasury stock method. The Company's 5% Convertible Subordinated Debentures due 2007 (the "Convertible Debentures"), were not included in the computation of diluted net income per share because their conversion price was greater than the average market price of the Company's common stock during the periods presented and, if included, would have had an anti-dilutive effect on net income per share for the periods presented. All prior periods have been restated in compliance with SFAS 128. (5) Supplemental cash flow information (in thousands): For the nine months ended March 31, 1998 and 1997, the Company recognized tax benefits related to the exercise of stock options as increases to additional paid-in capital and decreases to income taxes payable of $4,673,000 and $5,216,000, respectively.
March 31, Cash paid during the periods for: 1998 1997 ------ ------ Interest...................... $8,233 $ - Income taxes.................. 696 1,276
-8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The historical operations of the Company are primarily related to its plastics and filtration technologies business. All revenues and a significant majority of operating expenses were derived from these operations. As discussed below, the consolidated financial statements for the three and nine month periods ended March 31, 1998 include certain costs associated with the Company's activities in developing its healthcare communications business. Consolidated Results of Operations: - ---------------------------------- Net sales for the quarter and nine months ended March 31, 1998 increased 15.4% and 25.1% to $16,437,000 and $46,710,000, respectively, from $14,243,000 and $37,327,000 in the comparable prior year periods. The increases in sales for the periods was principally due to internal growth and to a lesser extent, the February 9, 1997 acquisition of Interflo Technologies Inc. ("Interflo"). Internal growth was driven by sales of writing instrument components, sales to medical original equipment manufacturers of porous components used in diagnostic products, and sales of laboratory disposable products. Cost of sales for the quarter and nine months ended March 31, 1998 increased by $763,000, or 9.7%, and $4,660,000, or 22.9%, respectively, over the comparable prior year periods due to the increased sales volume noted above and to the operations of Interflo being included for the full quarter. As a percent of net sales, cost of sales for the quarter ended March 31, 1998 decreased to 52.4% from 55.1% in the comparable prior year period principally due to increased leverage of certain fixed costs and labor efficiencies. As a percent of net sales, cost of sales for the nine months ended March 31, 1998 did not vary materially from the comparable prior year period. Selling, general and administrative expenses for the quarter ended March 31, 1998 increased by $330,000 or 5% over the comparable prior year period due primarily to the inclusion of Interflo's operation for the full quarter as well as increased sales and marketing expenses relating to the Company's plastics and filtration technologies business. As a percent of net sales, selling, general and administrative expenses for the quarter ended March 31, 1998 decreased to 42.5% from 46.7% in the prior year quarter due principally to an increase in sales which was not proportionately offset by expenses, since a portion of these expenses is fixed and does not vary directly with sales. For the nine months ended March 31, 1998, selling, general and administrative expenses increased by $6,524,000 or 45.9% due primarily to the inclusion of $4,689,000 in expenses associated with the Company's healthcare communications business for the first six months of the fiscal year for which there was no comparable amount in the prior year period. Excluding these costs, as a percent of net sales, selling, general and administrative expenses for the nine months ended March 31, 1998 decreased to 34.4% from 38.1% in the prior year period due principally to an increase in sales which was not proportionally offset by expenses, since a portion of these expenses is fixed and does not vary directly with sales. Interest and other income net of interest expense for the quarter ended March 31, 1998 increased by $679,000 or 29.1% over the comparable prior year quarter due primarily to the increase in funds available for investment generated by the proceeds of the Company's Convertible Debentures issued in February 1997, partially offset by the interest expense associated with the Convertible Debentures. For the nine months ended March 31, 1998, interest and other income, net of interest expense, increased by $2,375,000 or 34.6% -9- principally due to an increase in funds available for investment generated by the proceeds of the Company's Convertible Debentures issued in February 1997, which was partially offset by the interest expense associated with the Convertible Debentures, and as a result of the Company recording a $600,000 gain from the repurchase of Convertible Debentures in the December quarter. During the quarter ended March 31, 1997, the Company recorded a charge to income of $3,585,000 for purchased research and development costs relating to the acquisition of CareAgents. Excluding the purchased research and development charge in the prior year periods for which no tax benefit was recognized, the effective tax rate for the quarter ended March 31, 1998 decreased to 38.3% from 43.7% in the prior year quarter principally due to recognition of certain research and development credits in the current period, a portion of which was offset by the loss of state tax benefits for the expenses associated with the Company's healthcare communications business. For the nine months ended March 31, 1998, the effective tax rate increased to 39.7% from 35.5% as the Company currently receives no state tax benefit for the expenses associated with its healthcare communications business partially offset by research and development credits in the current quarter for which there is no comparable amounts in the prior year. Capital Resources and Liquidity: - ------------------------------- Cash, cash equivalents and marketable securities decreased by $2,657,000 to $313,171,000 during the nine months ended March 31, 1998 principally due to the Company's repurchase of $5,500,000 face amount of Convertible Debentures and the interest payment related to the Convertible Debentures which was partially offset by cash provided by operations. As a result of the continuing efforts in developing its healthcare communications business, the Company expects to incur significant research and development expenditures in connection with this new area of business until the products and services are successfully developed and marketed. During the nine months ended March 31, 1998, the Company incurred expenditures of approximately $8,672,000 related to the development of its healthcare communications business. The Company believes that its cash flow from operations and the income earned on its investments are sufficient to meet the anticipated working capital requirements of its business, including the research and development expenditures noted above. On March 9, 1998 the Company announced a merger agreement for the acquisition of Point Plastics, Inc., a manufacturing company located in Petaluma, California. Point Plastics sells high volume disposable plastic products, such as pipette tips, micro-centrifuge tubes and PCR tubes to the research and clinical life sciences markets worldwide. The purchase price for all of the outstanding capital stock of Point Plastics is $86 million, subject to adjustment under certain circumstances, payable 60% in shares of Synetic Common Stock and 40% in cash. The closing is subject to satisfaction of certain conditions. The Company continues to pursue an acquisition program pursuant to which it seeks to effect one or more acquisitions or other similar business combinations with businesses it believes have significant growth potential. Financing for such acquisitions may come from several sources, including, without limitation, (a) the Company's cash, cash equivalents and marketable securities and (b) proceeds from the incurrence of additional indebtedness or the issuance of common stock, preferred stock, convertible debt or other securities. There can be no assurance that the Company's acquisition program will be successful. See "Item 1. Business--Acquisition Program" in the 1997 Form 10-K. -10- SYNETIC INC. AND SUBSIDIARIES PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company previously announced that in July 1994 the Division of Enforcement of the Securities and Exchange Commission (the "SEC") began an investigation regarding certain trading in securities of the Company. On March 11, 1998, the SEC filed a civil action against Roger Licht, an outside director of the Company. The complaint alleges that Mr. Licht provided non-public information to friends in connection with transactions involving the Company and its former parent, Medco Containment Services, Inc.("Medco"), and traded on the basis of non-public information in connection with an unrelated company. The SEC's complaint relates to the acquisition of Medco by Merck & Co., Inc. in July 1993 and Medco's subsequent sale of its majority interest in the Company in May 1994. The SEC's action seeks disgorgement of the alleged trading profits and an injunction against Mr. Licht. The SEC's action does not involve or seek any recovery from the Company or allege any wrongdoing by the Company. Accordingly, the Company believes that such action will not have a material adverse effect on its financial position or results of operation. -11- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The following matters were voted upon at an Annual Meeting of Stockholders held on March 25, 1998 and received the number of votes set forth below: 1. Each of the following persons nominated was elected to serve as a director for a three year term and received the number of votes set opposite his name: FOR WITHHELD --- -------- Ray E. Hannah 16,645,517 23,053 Roger H. Licht 16,644,517 24,053 Bernard A. Marden 16,646,417 22,153 Herman Sarkowsky 16,646,417 22,153 2. The approval and adoption of an amendment to the Certificate of Incorporation of the Company (the "Charter") to eliminate the Company's classified Board of Directors and to provide for the annual election of all directors commencing at the next Annual Meeting of Stockholders of the Company. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 13,457,365 30,479 12,424 3,168,302 Since the amendment to the Charter referred to in Paragraph 1 above has been approved, all directors, including those referred to above will have terms which expire at the next Annual Meeting of Stockholders of the Company. 3. The approval and adoption of an amendment to the Charter to eliminate the requirement that provisions of the Charter relating to the classification of the Board of Directors and the election of one-third of the Board of Directors at each annual meeting may only be amended with the affirmative vote of the holders of two-thirds of the shares entitled to vote in the election of directors. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- --------- 13,449,760 34,984 15,524 3,168,302 4. The approval and adoption of an amendment to the Charter to eliminate cumulative voting in the election of directors. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- --------- 12,976,672 511,722 11,874 3,168,302 5. The approval and adoption of an amendment to the Charter to delete the requirement that provisions of the Charter relating to cumulative voting may only be amended with the affirmative vote of the holders of two-thirds of the shares entitled to vote in the election of directors. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 13,458,756 29,558 11,954 3,168,302 -12- 6. The approval and adoption of an amendment to the Charter to provide that any director may be removed, either with or without cause, at any time, by the affirmative vote of a majority of the outstanding shares entitled to vote in the election of directors. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 13,458,363 29,459 12,446 3,168,302 7. The approval and adoption of an amendment to the Charter to delete the requirement that provisions of the Charter relating to the power to remove directors or to fill vacancies on the Board of Directors may only be amended with the affirmative vote of the holders of two-thirds of the shares entitled to vote in the election of directors. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 13,437,365 45,832 17,071 3,168,302 8. The approval and adoption of an amendment to the Charter to delete the requirement that the provision of the By-Laws of the Company setting the maximum number of directors may only be amended with the affirmative vote of the holders of two-thirds of the shares entitled to vote in the election of directors. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 13,445,330 39,549 15,389 3,168,302 9. The approval and adoption of an amendment to the Charter to increase the number of authorized shares of Common Stock from 50 million to 100 million. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 16,398,466 239,568 30,536 -- 10. Ratification of the Company's Amended and Restated 1989 Class A Stock Option Plan. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 11,374,743 1,997,429 128,096 3,168,302 11. Ratification of the Company's Amended and Restated 1989 Class B Stock Option Plan. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 11,373,270 1,998,492 128,106 3,168,702 12. Ratification of the Company's Amended and Restated 1991 Special Nonqualified Stock Option Plan. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 11,490,911 1,986,953 59,180 3,131,526 -13- 13. Approval of a grant to an officer of the Company of a nonqualified option to purchase 250,000 shares of Common Stock. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 12,541,287 935,037 61,320 3,130,926 14. Ratification of the appointment of Arthur Andersen LLP as independent public auditors of the Company for the fiscal year ending June 30, 1998. FOR AGAINST ABSTAIN NON-VOTE --- ------- ------- -------- 16,624,783 13,850 29,937 -- -14- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits Exhibit No. Description ----------- ----------- 11 Computation of Earnings Per Share 27 Financial Data Schedule (b) On March 11, 1998, the Company filed a report on Form 8-K disclosing that it had entered into a merger agreement for the acquisition of Point Plastics, Inc. -15- SIGNATURE 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 hereunto duly authorized. SYNETIC, INC. ---------------------------- Anthony Vuolo Executive Vice President - Finance and Administration and Chief Financial Officer Dated: May 15, 1998 -16- SIGNATURE 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 hereunto duly authorized. SYNETIC, INC. /s/ Anthony Vuolo --------------------------------- Anthony Vuolo Executive Vice President - Finance and Administration and Chief Financial Officer Dated: May 15, 1998 -17- EXHIBIT INDEX Number Description ------ ----------- 11 Computation of Earnings Per Share 27 Financial Data Schedule EX-11 2 COMPUTATION OF EARNINGS PER SHARE Exhibit 11 ---------- SYNETIC, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE
QUARTERS ENDED NINE MONTHS ENDED MARCH 31, MARCH 31, ----------------- ------------------ 1998 1997 1998 1997 ------- -------- ------- --------- Basic earnings(loss) from operations.................... (A) $ 2,376 $(2,420) $ 6,161 $(25,965) Assumed conversion of convertible debentures(1)...................... - - - - ------- ------- ------- -------- Diluted earnings from operations..... (B) $ 2,376 $(2,420) $ 6,161 $(25,965) ======= ======= ======= ======== Weighted average shares outstanding - basic................ (C) 17,678 17,491 17,652 17,058 Common stock equivalents for dilutive earnings per share using the treasury stock method....................... 2,216 - 1,906 - ------- ------- ------- -------- Additional equivalent shares upon assumed conversion of convertible debentures(1)...................... - - - - ------- ------- ------- -------- Weighted average shares and common equivalent shares outstanding for diluted earnings per share..... (D) 19,894 17,491 19,558 17,058 EARNINGS PER SHARE Basic................................ (A)/(C) $ .13 $ (.14) $ .35 $ (1.52) Diluted.............................. (B)/(D) $ .12 $ (.14) $ .32 $ (1.52) - ---------------------------
(1) The Convertible Debenture conversion is not included in the computation of earnings per share as it is anti-dilutive for all periods presented. EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SYNETIC, INC'S 3/31/98 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 82,921 3,206 11,317 783 5,915 113,839 47,037 21,019 387,177 20,231 159,500 0 0 230 201,524 387,177 46,710 46,710 24,986 24,986 0 0 6,496 10,225 4,064 6,161 0 0 0 6,161 0.35 0.32
-----END PRIVACY-ENHANCED MESSAGE-----