<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
----------------------
[x] QUARTERLY REPORT PURSUANT SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File No. 0-23590
SUPER VISION INTERNATIONAL, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 59-3046866
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
8210 Presidents Drive
Orlando, Florida 32809
(Address of Principal Executive Offices)
(407) 857-9900
(Issuer's Telephone Number)
Not Applicable
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Class Outstanding at August 5,1999:
Class A Common Stock, $.001
par value 2,020,818 shares
Class B Common Stock, $.001
par value 483,264 shares
Transitional Small Business Disclosure Format
Yes [ ] No [X]
SUPER VISION INTERNATIONAL, INC.
===============================================================================
<PAGE> 2
SUPER VISION INTERNATIONAL, INC.
INDEX TO FORM 10-QSB
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of June 30, 1999 (unaudited) and December 31, 1998 1
Condensed Statements of Operations for the Six Months Ended June 30, 1999 and
1998 (unaudited) 2
Condensed Statements of Cash Flows for the Three and Six Months Ended June 30,
1999 and 1998 (unaudited) 3
Notes to Condensed Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 8
PART II. INFORMATION
Item 1. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
</TABLE>
<PAGE> 3
SUPER VISION INTERNATIONAL, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED)
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 2,684,861 $ 2,798,142
Trade accounts receivable, less allowance for
doubtful accounts of $116,039 at June 30, 1999
and $142,576 at December 31, 1998 1,539,565 915,570
Inventory 2,410,968 2,545,684
Advances to employees 8,691 7,206
Other assets 186,325 128,791
------------ ------------
Total current assets 6,830,410 6,395,393
Property and Equipment 6,350,392 6,168,397
Accumulated depreciation and amortization (1,326,934) (1,054,151)
------------ ------------
5,023,458 5,114,246
Construction in progress 229,969 259,201
------------ ------------
Net property and equipment 5,253,427 5,373,447
Other assets 190,319 191,062
------------ ------------
$ 12,274,156 $ 11,959,902
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 713,115 $ 338,700
Accrued compensation and benefits 41,599 134,423
Deposits 24,839 4,451
Revolving line of credit 300,000 --
------------ ------------
Total current liabilities 1,079,553 477,574
Obligation under capital lease 3,196,809 3,189,015
Stockholders' Equity:
Preferred stock, $.001 par value, 5,000,000 shares
Authorized, none issued -- --
Class A common stock, $.001 par value, authorized
16,610,866 shares, 2,020,818 and 2,020,418
issued and outstanding at June 30, 1999 and
December 31, 1998, respectively 2,020 2,020
Class B common stock, $.001 par value, 3,389,134 shares
authorized, 483,264 issued and outstanding 483 483
Additional paid-in capital 10,281,659 10,236,139
Accumulated deficit (2,286,368) (1,945,329)
------------ ------------
Total stockholders' equity 7,997,794 8,293,313
------------ ------------
$ 12,274,156 $ 11,959,902
============ ============
</TABLE>
See accompanying notes to unaudited condensed financial statements.
1
<PAGE> 4
SUPER VISION INTERNATIONAL, INC.
CONDENSED STATEMENTS OF OPERATIONS - UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 2,340,872 $ 2,595,096 $ 4,669,120 $ 4,913,980
Cost and Expenses:
Cost of sales 1,641,857 1,658,852 3,092,629 3,029,222
Selling, general and administrative 836,479 932,145 1,464,200 1,716,855
Research and development 150,216 73,798 294,439 151,879
----------- ----------- ----------- -----------
Total costs and expenses 2,628,552 2,664,795 4,851,268 4,897,956
Operating Income (Loss) (287,680) (69,699) (182,148) 16,024
Non-Operating Income (Expense):
Interest income 31,147 24,683 67,545 57,319
Interest expense (112,885) (110,012) (223,972) (218,987)
Loss on disposal of assets (2,464) -- (2,464) (2,902)
----------- ----------- ----------- -----------
Total non-operating income (expense) (84,202) (85,329) (158,891) (164,570)
----------- ----------- ----------- -----------
Loss Before Income Taxes (371,882) (155,028) (341,039) (148,546)
Income Tax Benefit -- 56,000 -- 53,083
----------- ----------- ----------- -----------
Net Loss $ (371,882) $ (99,028) $ (341,039) $ (95,463)
=========== =========== =========== ===========
Net Loss Per Common Share:
Basic $ (0.15) $ (0.04) $ (0.14) $ (0.04)
=========== =========== =========== ===========
Diluted $ (0.15) $ (0.04) $ (0.14) $ (0.04)
=========== =========== =========== ===========
</TABLE>
See accompanying notes to unaudited condensed financial statements.
2
<PAGE> 5
SUPER VISION INTERNATIONAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS -- UNAUDITED
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (341,039) $ (95,463)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 285,599 256,738
Loss on disposal of fixed assets 2,464 2,902
Accretion of capital lease obligation 7,794 28,077
Deferred income tax -- (53,083)
Issuance cost 44,022 24,139
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable, net (623,995) (21,354)
Inventory 134,716 (371,934)
Other assets (61,192) (139,636)
Increase (decrease) in:
Accounts payable 374,415 (308,180)
Accrued compensation and benefits (92,824) (42,225)
Deposits 20,388 (78,648)
----------- -----------
Total adjustments 91,387 (703,204)
----------- -----------
Net cash used in operating activities (249,652) (798,667)
Cash Flows from Investing Activities:
Purchase of investments -- (104,651)
Proceeds from investments -- 102,121
Proceeds from disposal of property and equipment 1,053 --
Purchase of property and equipment (194,653) (187,372)
Acquisition of patents and trademarks (759) (26,777)
Deposits on equipment 29,232 (3,900)
----------- -----------
Net cash used in investing activities (165,127) (220,579)
Cash Flows from Financing Activities:
Borrowings under revolving line of credit 300,000 --
Proceeds from exercise of employee stock options 1,498 --
----------- -----------
Net cash provided by financing activities 301,498 --
----------- -----------
Net Decrease in Cash and Cash Equivalents (113,281) (1,019,246)
Cash and Cash Equivalents, beginning of period 2,798,142 2,478,145
----------- -----------
Cash and Cash Equivalents, end of period $ 2,684,861 $ 1,458,899
=========== ===========
</TABLE>
See accompanying notes to unaudited condensed financial statements.
3
<PAGE> 6
SUPER VISION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION:
In the opinion of the Company, the accompanying unaudited condensed
financial statements contain all adjustments, consisting only of normal
recurring accruals, necessary to present fairly the Company's financial
position, results of operations and cash flows for the periods presented.
The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full year.
The condensed financial statements should be read in conjunction with the
financial statements and the related disclosures contained in the
Company's Annual Report on Form 10-KSB, dated March 16, 1999, as filed
with the Securities and Exchange Commission.
As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income."
SFAS No. 130 establishes new rules for the reporting and display of
comprehensive income and its components; however, the adoption of this
Statement had no impact on the Company's net income or loss or
shareholders' equity for 1999 or 1998.
2. INVENTORY:
Inventory at June 30, 1999 and December 31, 1998 consisted of the
following components:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- -----------
<S> <C> <C>
Raw materials $ 1,796,138 $ 1,562,670
Work in progress 38,902 65,107
Finished goods 731,743 1,073,722
----------- -----------
2,566,783 2,701,499
Less: Reserve for excess inventory (155,815) (155,815)
----------- -----------
$ 2,410,968 $ 2,545,684
=========== ===========
</TABLE>
4
<PAGE> 7
SUPER VISION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
3. LONG TERM OBLIGATIONS:
Capital Lease
The Company leases its operating facility from a corporation owned by the
Company's Chief Executive Officer. The lease has a fifteen-year term
extending through June 15, 2012. Assets recorded under capital lease and
included in property and equipment are as follows:
<TABLE>
<S> <C>
Office/Warehouse building $ 3,081,000
Less accumulated amortization (409,956)
-----------
$ 2,671,044
===========
</TABLE>
Future minimum annual lease payments for the remainder of and years
subsequent to June 30, 1999 and in the aggregate are as follows:
<TABLE>
<S> <C>
1999 $ 290,762
2000 581,520
2001 598,481
2002 610,596
2003 620,664
2004 and thereafter (aggregate) 5,912,715
-----------
Minimum lease payments 8,614,738
Less amount representing interest and executory costs (5,417,929)
-----------
Present value of net minimum lease payments under capital lease $ 3,196,809
===========
</TABLE>
Deposits paid under this lease agreement totaled $58,167 at June 30, 1999.
Line of Credit
As of June 2, 1998, the Company entered into an agreement with a bank,
which provides for a $1,000,000 commercial revolving line of credit to
finance working capital requirements and letters of credit. As of June 30,
1999, there was an outstanding loan in the amount of $300,000 under the
facility. The loan was paid in full on July 16, 1999.
5
<PAGE> 8
SUPER VISION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
4. STOCK OPTION PLAN:
The Company has a stock option plan that provides for the grant of
incentive stock options and nonqualified stock options in an amount up to
450,000 shares of the Company's Class A common stock. The option price
must be at least 100% of market value at the date of the grant.
The following table summarizes activity under the stock option plan for
the six-month period ended June 30, 1999:
<TABLE>
<CAPTION>
OPTIONS NUMBER OPTION
AVAILABLE FOR OF PRICE
FUTURE GRANT SHARES PER SHARE
------------- -------- ------------
<S> <C> <C> <C>
Balance, January 1, 1999 110,368 284,429 $3.00 - $9.25
Options granted (33,900) 33,900 $4.00 - $5.94
Options exercised -- (400) $3.00 - $4.00
Options cancelled 2,500 (2,500) $3.00 - $7.94
------- -------
Balance, June 30, 1999 78,968 315,429
======= =======
</TABLE>
All of the options granted vest ratably over a three-year period or vest
based on achievement of performance criteria. As of June 30, 1999, 201,864
options were vested and exercisable.
6
<PAGE> 9
SUPER VISION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
5. EARNINGS (LOSS) PER SHARE:
The following table sets forth the computation of basic and diluted
earnings per share in accordance with SFAS No. 128, "Earnings per Share":
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Numerator:
Net loss (numerator for basic and
diluted earnings per share) $ (371,882) $ (99,028) $ (341,039) $ (95,463)
Denominator:
Denominator for basic earnings per share
- weighted average shares 2,477,915 2,227,183 2,477,762 2,227,183
Effect of dilutive securities:
Options -- -- -- --
Warrants -- -- -- --
----------- ----------- ----------- -----------
Dilutive potential shares -- -- -- --
Denominator for diluted earnings per share
- adjusted weighted average shares 2,477,915 2,227,183 2,477,762 2,229,183
=========== =========== =========== ===========
Basic loss per share $ (0.15) $ (0.04) $ (0.14) $ (0.04)
=========== =========== =========== ===========
Diluted loss per share $ (0.15) $ (0.04) $ (0.14) $ (0.04)
=========== =========== =========== ===========
</TABLE>
Certain warrants and escrowed shares are not included in the computation
of earnings per share because the related shares are contingently issuable
or to do so would have been anti-dilutive for the periods presented.
6. INCOME TAXES:
The Company has provided a full valuation allowance against income tax
benefits resulting from 1999 operations.
7. USE OF ESTIMATES:
The preparation of condensed financial statements in conformity with
generally accepted accounting principles (GAAP), consistently applied,
requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes.
Actual reports could differ from those estimates.
7
<PAGE> 10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
unaudited condensed financial statements and notes thereto appearing elsewhere
in this report.
The following discussion contains certain forward-looking statements, within
the meaning of the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995, as amended, the attainment of which involve
various risks and uncertainties. Forward-looking statements may be identified
by the use of forward-looking terminology such as "may", "will", "expect",
"believe", "estimate", "anticipate", "continue", or similar terms, variations
of those terms or the negative of those terms. The Company's actual results may
differ materially from those described in these forward-looking statements due
to, among other factors, competition in each of the Company's product areas,
dependence on suppliers, the Company's limited manufacturing experience, the
condition of the international marketplace and the evolving nature of the
Company's fiber optic technology.
Results of Operations
Revenues are derived primarily from the sale of fiber optic Side Glow(R) and
End Glow(R) cable and light sources, point of purchase fiber optic signs and
displays and sales of fiber optic landscape and task lighting systems. Revenues
for the three months ("1999 quarter") and six months ("1999 six months") ended
June 30, 1999 were approximately $2,341,000 and $4,669,000, respectively. This
compares with revenues for the three months ("1998 quarter") and six months
("1998 six months") ended June 30, 1998 of approximately $2,595,000 and
$4,914,000, respectively.
The 10% decrease in the 1999 quarter revenues as compared to the 1998 quarter
occurred in the pool and spa and architectural lighting markets. Pool sales
show the most significant decline and reflect continuing weakness in that
division. In addition, the architectural and sign divisions have been adversely
affected by lower selling prices, partially offset by volume increases which
are related to changes in the distribution channels for these markets.
International revenues rebounded after a weak first quarter.
The 5% decrease in revenues for the 1999 six months compared to the 1998 six
months is due to the 1999 quarter shortfall discussed above. Year-to-date
architectural lighting revenues are ahead of last year and offset lower selling
prices discussed above. Pool and spa revenues are down and reflect continuing
weakness in this division. Sign sales also are down, but show a healthy volume
increase. Despite the second quarter rebound, international revenues are still
below last year.
Cost of sales for the 1999 quarter was approximately $1,642,000 or 70% of
revenues. For the 1999 six months cost of sales was approximately $3,093,000 or
66% of revenues. Gross profit was 30% of revenues for the 1999 quarter as
compared to 36% in 1998 quarter. Gross profit for the 1999 six months was 34%
compared to 38% for the 1998 six months. The margin erosion primarily reflects
the effect of lower selling prices in the architectural light and sign markets,
due to changes in the channels of distribution. Margin erosion is somewhat
mitigated by the favorable mix effect of higher sales in our more profitable
architectural lighting business.
Selling, general and administrative expenses ("SG&A" expenses) for the 1999
quarter were approximately $836,000, compared to $932,000 for the 1998 quarter,
a decline of 10%. For the 1999 six months, SG&A expenses were approximately
$1,464,000 compared to $1,717,000 for the 1998 six months, or a decline of 15%.
Both periods reflect reductions in most major expense categories and include
the effect caused by Cooper Lighting, the Company's distributor, assuming
marketing efforts for the architectural lighting market.
Management noted in its quarterly report on Form 10-QSB for the period ended
March 31, 1999, as filed with the SEC, that increased legal costs may result as
the Company continues to proceed with a federal lawsuit against a foreign
competitor filed in January 1999 for alleged infringement of the Company's
patent rights. As of June 30, 1999, this suit has been settled in the Company's
favor and has affirmed the validity of the Company's patents. Further,
Management expects that increased legal costs may continue to result as the
Company has filed a complaint against a domestic company for patent
infringement of its fiber optic cable. Legal expenses included in SG&A were
approximately $47,000 for the 1999 six months, as compared to $58,000 for the
1998 six months. See "Legal Proceedings" for further information.
Research and development ("R & D") expenses for the 1999 and 1998 quarters were
approximately $150,000 and
8
<PAGE> 11
$74,000, respectively. For the 1999 six months, R & D expenses were
approximately $294,000 compared to the 1998 six months of $152,000. The
significant increases in both periods are related to development of expanded
product offerings and the Company's efforts to maintain a leadership position
in the fiber optic lighting technology.
No provision for income taxes has been included for the 1999 quarters or the
1999 six months compared to a tax benefit for the 1998 quarter and 1998 six
months of approximately $56,000 and $53,000, respectively. Provision for income
taxes as a percentage of pre-tax income was 0% for the 1999 quarter and 1999
six months compared to 36% for the 1998 quarter and 1998 six months. No income
tax provision was provided for the three months ended June 30, 1999 or the six
months ended June 30, 1999 as the Company has net operating loss carryforward
benefits totaling approximately $1.6 million at June 30, 1999. The Company has
evaluated its tax position versus the requirements of SFAS No. 109, Accounting
for Income Taxes and does not believe that it has met the more-likely-than-not
criteria for recognizing a deferred tax asset and has provided valuation
allowances against net deferred tax assets.
Net losses of approximately $372,000 were incurred in the 1999 quarter and
$341,000 for the 1999 six months. This represents losses of $.15 and $.14,
respectively, per basic and diluted common share. Net losses of approximately
$99,000 and $95,000 were incurred in the 1998 quarter and the 1998 six months,
respectively, or $.04 per basic and diluted common share.
The increased net losses in the 1999 quarter and the 1999 six months resulted
from lower revenues, gross profit erosion and offset in part by lower operating
expenses.
Liquidity and Capital Resources
At June 30, 1999 the Company had working capital of approximately $5,700,000.
Cash and cash equivalents decreased by approximately $113,000. Accounts
receivable increased by $624,000 due mainly to the seasonality of revenues.
Accounts payable increased by approximately $374,000 mainly due to inventory
purchases and extended payment terms by a supplier. Bank borrowings of $300,000
under a line of credit were used to fund operational cash needs.
Escrowed Shares
In January 1994, the Company and certain stockholders of the Company entered
into an agreement providing for the escrow of 2,918,000 shares held by such
individuals (the "Escrow Shares"). In the event any of the shares were released
from escrow to officers, directors and other employees of the Company,
compensation expense would be recorded for financial reporting purposes as
required by GAAP. As of March 31, 1997, Brett Kingstone, the President and
Chairman, voluntarily retired 2,891,870 shares of Class B common stock
previously held in the escrow account. These shares were returned to the
Company treasury. The Company currently has 26,130 shares of Class A Common
Stock held in escrow. In the event the Company attains certain earnings
thresholds, or the Company's Class A Common Stock meets certain minimum bid
prices required for the release of the remaining 26,130 Escrow Shares, the
Company may, in the event of the release of such shares from escrow, recognize
during the period in which the earnings threshold are met or are probable of
being met or such minimum bid prices attained, charges to earnings as
compensation expense which would have the effect of reducing the Company's
earnings at such time. As of March 31, 1999, the Company had not attained the
aforementioned requirements; consequently, the escrowed shares were returned to
the Company treasury and retired. In addition, the Company's Class A and Class
B warrants were also retired as of March 31, 1999.
Year 2000 Issue
Many existing computer systems and applications and other control devices use
only two digits to identify a year in the date field, without considering the
impact of the upcoming change in the century. The Year 2000 issue is the risk
that systems, products and equipment utilizing date-sensitive software or
computer chips with two-digit date fields will fail to properly recognize the
Year 2000. Such failures by the Company's software or hardware or that of
government entities, customers, major vendors and other third parties with whom
the Company has material relationships could result in interruptions of the
Company's business which could have a material adverse effect on the Company.
9
<PAGE> 12
The Company's Year 2000 readiness program applies to all hardware and software,
whether developed internally or purchased from an outside supplier. The Company
utilizes and is dependent upon data processing computer hardware and software
to conduct its business, and recently completed an upgrade of all such hardware
and software. Based on the Company's assessment to date, the Company believes
its computer systems are "Year 2000 compliant"; that is, capable of adequately
distinguishing 21st century dates from 20th century dates. However, there can
be no assurance that the Company has or will timely identify and remediate all
significant Year 2000 problems in its own computer systems, that remedial
efforts subsequently made will not involve significant time and expense, or
that such problems will not have a material adverse effect on the Company's
business, operating results and financial conditions.
The Company believes that if any systems need to be repaired or replaced the
repair or replacement would be minimal and could be handled within its normal
budget for computer system upgrades and replacements. Costs incurred to date
for system remediation have not been material. The Company is encouraging its
customers and suppliers to take the appropriate precautionary steps necessary
to ensure their computers systems are Year 2000 compliant, well in advance of
the January 1, 2000 timeframe. However, the Company believes that financial
exposure to the Company of the failure of any one customer to be Year 2000
compliant is limited. Should a number of customers not be Year 2000 compliant,
or should a number of the Company's customers be negatively impacted by Year
2000 problems, the negative consequences to the Company's customers could have
a material adverse effect on the Company's business, financial position, and
results of operation.
The Company has currently made limited efforts to determine the extent of and
minimize the risk that the computer systems of the Company's suppliers or
customers are not Year 2000 compliant, or will not become compliant on a timely
basis. If Year 2000 problems prevent any of the Company's suppliers from timely
delivery of products or services required by the Company, the Company's
operating results could be materially adversely affected. Further, if the
Company's customers face Year 2000 problems that result in the deferral or
cancellation of such customers' purchases of the Company's products and
services, the Company's business, operating results and financial conditions
could be materially adversely affected.
The foregoing statements are intended to be and are, hereby, designated "Year
2000 Readiness Disclosure" statements within the meaning of the Year 2000
Information and Readiness Disclosure Act.
10
<PAGE> 13
PART II
Item 1. Legal Proceedings
On January 8, 1999, the Company filed a lawsuit (case number
99-131-CIV-T-23B) in the U.S. District Court for the Middle District
of Florida , Orlando Division, against Neo-Neon, Ltd., a Hong Kong
corporation, and Live Lite International, B.V., a Netherlands
corporation (collectively the "Defendants"), for direct infringement
of the Company's patents related to its Side Glow(TM) products. This
suit has been settled in favor of the Company and the Company's rights
to and ownership of its patents have been affirmed. Under the terms of
settlement, the Defendants acknowledge the validity of the Company's
patents and agree to cease and desist all marketing and sales of
infringing products wherever the Company has valid patent filings.
The Company has also filed a lawsuit (case number 99-40110) on June
23, 1999, against Boston Optical in the federal district court in
Massachusetts for patent infringement of the Company's fiber optic
cable. No response to the suit has yet been received. Legal expenses
were approximately $47,000 for the 1999 six months, as compared to
$58,000 for the 1998 six months.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of stockholders on Monday, May 10,
1999, at 9:30 a.m. at its principal executive offices in Orlando,
Florida. The Company's stockholders elected the following slate of
directors recommended by the Board of Directors by a vote of 3,972,081
for and 9,440 withheld:
Brett Kingstone Anthony Castor Brian McCann
Edgar Protiva Eric Protiva Fritz Zeck
The Company's stockholders also ratified and approved the appointment
of Ernst & Young LLP as the Company's independent auditors by a vote
of 3,972,131 for, 9,390 withheld, and 0 abstaining. There were no
broker non-votes for either matter.
Item 6. Exhibits and Reports on Form 8-K
(a) 27 Financial data schedule
(b) The Company did not file any current reports on Form 8-K during the
six months ended June 30, 1999.
11
<PAGE> 14
In accordance with the requirements of the Securities
Exchange Act of 1934, the registrant caused this report to be signed on its
behalf by the undersigned, thereunder duly authorized.
SUPER VISION INTERNATIONAL, INC.
By: /s/ Brett M. Kingstone Date: August 9, 1999
-------------------------------------------
Brett M. Kingstone, Chief Executive Officer
(Principal Executive Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,684,861
<SECURITIES> 0
<RECEIVABLES> 1,539,565
<ALLOWANCES> 116,039
<INVENTORY> 2,410,968
<CURRENT-ASSETS> 6,830,410
<PP&E> 6,350,392
<DEPRECIATION> (1,326,934)
<TOTAL-ASSETS> 12,274,156
<CURRENT-LIABILITIES> 1,079,553
<BONDS> 0
0
0
<COMMON> 2,503
<OTHER-SE> 10,281,659
<TOTAL-LIABILITY-AND-EQUITY> 12,274,156
<SALES> 4,669,120
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<TOTAL-COSTS> 4,851,268
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 223,972
<INCOME-PRETAX> (341,039)
<INCOME-TAX> 0
<INCOME-CONTINUING> (341,039)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (341,039)
<EPS-BASIC> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
