Super Vision International, Inc. (NASDAQ:SUPVA) (Class A Common), a
world leader in solid-state LED and fiber optic lighting systems
and controls used in commercial, architectural, signage, swimming
pool and retail lighting applications today announced financial
results for the second quarter and six months ended June 30, 2006.
Total revenue for the second quarter of 2006 was approximately $3.1
million, down 2% or $68,000 from approximately $3.2 million in the
second quarter of 2005. Revenues were up 23% in the commercial
lighting division driven by a 38% increase in sales of the new
SaVi(TM) brand LED lighting products and a 14% increase in fiber
optic sales as compared to the same quarter in 2005. This increase
however, was offset by lower revenues from the pool and spa and
international divisions. Revenue from sales of pool and spa
lighting was down 10% for the second quarter of 2006 as compared to
the same period in 2005. An increase of 7% from the sale of fiber
optic products for the pools and spas was offset by an 18% decrease
in sales of LED products for pools and spas due to the timing of
sales of OEM LED spa lighting systems. Revenue from sales in our
international division declined 14%, for the second quarter of 2006
as compared to the same period in 2005. An increase of 6% from the
sale of LED products in our international division was offset by a
33% decrease in sales of fiber optic products as a result of fewer
large project shipments and lower sales of fiber optic products in
Spain, Russia and the middle-east as compared to the second quarter
of 2005. Overall, sales of LED products accounted for 52% of the
company's revenue in the second quarter of 2006, while fiber optic
sales accounted for 45% and waterfall/water feature products
accounted for 3%. Gross margin for the second quarter of 2006 was
46%, compared to 48% in the same quarter a year ago. However,
excluding the benefit of a one-time $240,000 legal settlement which
reduced costs of goods sold in the second quarter of 2005, gross
margin increased $151,000 or 12% in the second quarter of 2006.
Comparative gross margin, excluding the 2005 one time recovery of
costs from the legal settlement, was 46% for the quarter ended June
30, 2006 compared to 40% for the quarter ended June 30, 2005.
Operating expenses in the second quarter of 2006 were approximately
$1.54 million compared to $1.34 million in the same quarter of
2005. The increase in operating expenses was primarily due to
increased wages including stock option related expenses pursuant to
adoption of FAS123R Share Based Payment, increased legal and
professional fees and increased marketing costs related to
launching several new products. These increases were offset by
lower R&D expenses as new products were completed, and lower
insurance and tax expenses in 2006 compared to the same period in
2005. As a result of the increased operating expenses and lower
revenue, Super Vision reported a net loss of approximately $125,000
or $0.05 per common and diluted share for the second quarter of
2006 compared to net income of approximately $152,000 or $0.06 per
common and diluted share in the same quarter of 2005. Excluding the
benefit in 2005 of a one-time legal settlement of $240,000, the
company would have recorded a net loss of approximately $88,000 in
the second quarter of 2005. "The second quarter brought mixed
results with strong performance from our commercial division, up
23%, as sales of our new SaVi LED products increased 38%, while
sales in our international and pool and spa divisions decreased 14%
and 10% respectively, as compared to the same period in 2005. The
net loss, combined with the continued lower than planned revenue,
increased legal and administrative costs and the planned build up
in inventory to support the launch our new SaVi SHO and SaVi Pool
and Spa lights has significantly impacted our working capital mix,"
stated Mike Bauer, President and CEO of Super Vision. "To address
this concern, we have implemented an aggressive restructuring and
cost cutting plan for the second half of the year. In July, we
reduced our overall workforce by 19% and implemented a reduced
budget that should reduce controllable operating expenses by an
additional $200,000 in the second half of 2006. We estimate the
overall savings from both workforce and planned operating expense
reductions in the next six months will exceed $400,000. Our goal is
to aggressively reduce inventory through sales, improve our cash
position and right size the company's expenses in proportion to
revenues to achieve profitability. We have an aggressive second
half sales and marketing plan. Our hope is that our restructuring
efforts will combine with increases in overall sales and sales of
our new products to enable us to achieve our desired financial
results." For the six-months ended June 30, 2006, total revenue was
$5.8 million, down 4% or $272,000 from approximately $6.1 million
in the same period of 2005. Despite increases of 1% and 2% in both
the commercial lighting and pool and spa lighting divisions
respectively, the decrease of 22% in international sales led to an
overall decline in revenue during the first six months of 2006 as
compared to the same period in 2005. Driven by strong second
quarter sales of the new SaVi(TM) brand of LED products, our
commercial lighting sales, which were down 18% at the end of the
first quarter, are now up 1% for the six months ended June 30, 2006
as compared to the same period in 2005. Pool and spa sales are up
2% for the first six months of 2006 due to a 9% increase in fiber
optic and water feature sales offsetting lower sales of LED
products due to the timing of OEM spa lighting sales. Although
sales in Asia were up 25% in the second quarter, sales in this
region are still down for the six months ended June 30, 2006 due to
lower revenues from sales of our Flex-LED product. Gross margin for
the six months ended June 30, 2006 was approximately $2,592,000 or
45% as compared to approximately $2,720,000 or 45% for the six
months ended June 30, 2005. Excluding the one-time $240,000 legal
settlement which lowered costs of good sold in 2005, 2006
year-to-date gross margins improved $112,000 or 45% compared to 41%
during the first six months of 2005. Operating expenses in the
first six months of 2006 were approximately $2.9 million compared
to $2.6 million in the same period of 2005. The increase in
operating expenses was primarily due to increased wages including
stock option related expenses pursuant to the adoption of FAS123R
Share Based Payment, increased marketing expenses related to the
launch of new products and increased legal and consulting fees.
These increases were offset slightly by lower commissions, bad-debt
and insurance expenses compared to the same period in 2005. "The
recently concluded cost reduction initiatives are essential to
Super Vision's success," stated Dan Regalado, the Company's
Executive Vice President and CFO. "This process allowed the company
to revisit numerous opportunities for operational efficiencies
across the entire organization. As a result of the restructuring,
we have consolidated similar functions in every department and
further re-aligned our manufacturing operations to promote
additional cross functional training among our production staff. As
a result, we are well positioned to handle current revenue levels
while still capable of handling growth." concluded Dan Regalado.
For the six months ended June 30, 2006, Super Vision reported a net
loss of approximately $340,000 or $0.13 per common and diluted
share compared to net income of approximately $7,000 or $0.00 per
common and diluted share in the same period of 2005. Excluding the
benefit of a one-time legal settlement of $240,000, the net loss
for the first six-months of 2005 would have been approximately
$233,000. EBITDA, which is Earnings Before Interest, Taxes,
Depreciation and Amortization, is a non-GAAP measure which
management uses as part of its performance appraisal in reviewing
the Company's ongoing operational business trends related to its
financial condition and results of operations. For the second
quarter ended June 30, 2006, EBITDA was approximately $125,000 or
4% of revenue as compared to EBITDA of approximately $385,000 or
12% in the same period of 2005. Excluding the benefit of a one-time
legal settlement of $240,000, EBITDA for the second quarter of 2005
would have been approximately $145,000 or 5% of revenue. For the
six months ended June 30, 2006, EBITDA was approximately $152,000
or 3% of revenue as compared to $471,000 or 8% in 2005. Excluding
the benefit of the one-time legal settlement, EBITDA for the first
six months in 2005 would have been approximately $231,000 or 4% of
revenue. About Super Vision International, Inc. Super Vision
International's vision is to incorporate Light, Color and
Imagination with advanced technology to become one of the world's
leading suppliers of lighting and lighting control products that
add visual excitement, accent, impact and identity to commercial
and residential lighting projects around the world. For more
information, please visit the Super Vision web site at
http://www.svision.com. Certain of the above statements contained
in this press release are forward-looking statements that involve a
number of risks and uncertainties. Such forward-looking statements
are within the meaning of that term in Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Reference is made to Super Vision's filings under the
Securities Exchange Act for factors that could cause actual results
to differ materially. Super Vision undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Readers are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from
those indicated in the forward-looking statements as a result of
various factors. Readers are cautioned not to place undue reliance
on these forward-looking statements. -0- *T Super Vision
International, Inc. Condensed Statements of Operations (Unaudited)
Three Months Six Months Ended June 30, Ended June 30, 2006 2005
2006 2005 ---------- ---------- ---------- ---------- Revenues
$3,134,345 $3,202,751 $5,814,012 $6,086,507 Cost of sales 1,695,689
1,675,238 3,222,498 3,366,765 ---------- ---------- ----------
---------- Gross margin 1,438,656 1,527,513 2,591,514 2,719,742
Operating expenses: Selling, general and administrative 1,405,909
1,195,566 2,603,024 2,360,732 Research and development 138,426
151,279 308,310 258,881 Gain on disposal of fixed assets (300)
(6,000) (300) (6,000) ---------- ---------- ---------- ----------
Total operating expenses 1,544,035 1,340,845 2,911,034 2,613,613
---------- ---------- ---------- ---------- Operating Income (Loss)
(105,379) 186,668 (319,520) 106,129 Non-Operating Income (Expense):
Interest income 7,518 13,214 19,260 23,107 Interest expense
(90,658) (93,238) (177,970) (187,624) Other income 63,175 45,469
137,796 65,191 ---------- ---------- ---------- ---------- Total
non- operating expense (19,965) (34,555) (20,914) (99,326)
---------- ---------- ---------- ---------- Net Income (Loss) $
(125,344)$ 152,113 $ (340,434)$ 6,803 ========== ==========
========== ========== Net Income (Loss) Per Common Share: Basic and
diluted $ (0.05)$ 0.06 $ (0.13)$ 0.00 ========== ==========
========== ========== Weighted average shares outstanding: Basic
2,544,863 2,542,078 2,544,765 2,542,078 ========== ==========
========== ========== Diluted 2,544,863 2,587,037 2,544,765
2,564,187 ========== ========== ========== ========== *T -0- *T
Selected Consolidated Balance Sheet Data (Unaudited) (Audited) As
of ---------------------------- June 30, December 31, 2006 2005
------------ ------------ Cash and Unrestricted Investments $
163,353 $ 1,274,150 Restricted Investments $ 500,000 $ - Current
Assets $ 7,002,030 $ 6,311,190 Total Assets $10,053,408 $ 9,323,808
Current Liabilities $ 3,113,955 $ 1,995,530 Total Liabilities $
5,279,299 $ 4,288,386 Total Shareholders' Equity $ 4,774,109 $
5,035,422 *T -0- *T Reconciliation of Non-GAAP Financial Measure
The following table reconciles GAAP to non-GAAP financial measures:
(Unaudited) Three Months Ended June 30,
----------------------------------------- 2006 2005 Change %
---------- ---------- ---------- -------- Net Income (Loss)
$(125,344) $ 152,113 $(277,476) (182%) Plus: Interest 93,658 93,238
(2,579) (5%) Depreciation 148,628 128,420 18,208 14% Amortization
12,907 10,791 2,116 20% ---------- ---------- ---------- --------
EBITDA $ 124,849 $ 384,562 $(259,731) (68%) ========== ==========
========== ======== % of Revenues 4% 12% ========== ==========
(Unaudited) Six Months Ended June 30,
----------------------------------------- 2006 2005 Change %
---------- ---------- ---------- -------- Net Income (Loss)
$(340,434) $ 6,803 $(347,237) (5,104%) Plus: Interest 177,970
187,624 (9,654) (5%) Depreciation 288,645 255,070 33,575 13%
Amortization 25,953 21,402 4,551 21% ---------- ----------
---------- -------- EBITDA $ 152,134 $ 470,899 $(318,765) (68%)
========== ========== ========== ======== % of Revenues 3% 8%
========== ========== *T
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