Super Vision (NASDAQ:SUPVA)
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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 first quarter ended March 31, 2006.
Total revenue for the quarter was approximately $2.7 million, down
7% or $204,000 from approximately $2.9 million in the first quarter of
2005. Revenues were up 20% in our Pool and Spa division driven by
market share gains and stronger demand for both LED and fiber
optic/water feature products heading into the historically stronger
spring and summer pool season. However, this increase was offset by
lower revenue in our commercial and international divisions due to the
timing of several large project-based shipments and lower sales in
Asia and the United Kingdom. Commercial lighting sales were down 18%
and international sales were down 28%, respectively, as compared to
the same period in 2005. LED sales accounted for 48% of the company's
total revenue, while fiber optic sales accounted for 46% and
waterfall/water feature products represented 6% of overall revenue.
"March commercial and international shipments were slower than we
had planned, after solid sales growth in January and February, due to
the timing of releases stemming from extended construction schedules.
However, our sales efforts remain very strong and with production in
place for our new award winning SaVi(TM) SHO floodlight, and new
international distributor relationships being solidified after the
Light + Building tradeshow in Frankfurt, Germany last month, we are
optimistic about our commercial and international business for the
balance of 2006," stated Mike Bauer, President and CEO of Super
Vision. "We are very pleased with the results of our Pool and Spa
lighting division during this quarter and with the ramp up of our new
SaVi(TM) Pool and Spa lights as we head into the pool season, we feel
these new products along with our new Symphony of Light(TM) product
will continue to drive growth for the division."
"Operationally, we launched our new web site,
http://www.svision.com, and we successfully implemented a new CRM
(Customer Relations Management) system that is integrated with our
order processing, production and invoicing system to better serve our
customers. We also continued to invest in our new product development
efforts and installed a new state-of-the-art communications system at
a lower operating cost. As we continue to transform and begin to grow
the company, we expect to be in a stronger position to meet our
customer's needs," continued Bauer.
Gross margin in the first quarter was 36%, down from 41% in the
same quarter of 2005. Direct gross margin, which is revenue less
material costs, improved to 60% in Q1 of 2006 compared to 59% in the
same period of 2005, as the company continues to make material cost
reductions a major focus of its operational efforts. However, this
improvement could not compensate for the impact of lower revenue and
less absorption against fixed labor and overhead costs that directly
impact gross margin.
Dan Regalado, the Company's Executive Vice President and Chief
Financial Officer stated, "Despite lower overall gross margins for the
quarter driven by lower revenues to absorb fixed manufacturing
overhead expenses, we are pleased with the improvement in our direct
gross margins for the period. This improvement was driven mainly from
material cost reductions in our LED product lines, which have now
surpassed fiber optics as the main source of revenue for the company.
We are also encouraged to see direct gross margins from our largest
revenue market, pools & spas, improve substantially compared to the
same quarter of 2005. When commercial and international revenue begin
to improve, gross margin should also improve."
Operating expenses in the first quarter of 2006 were approximately
$1.37 million compared to $1.27 million in the same quarter of 2005.
The increase in operating expenses was primarily due to the recording
of stock-based compensation upon adoption of FAS123R Share Based
Payment, increased wages and benefits and increased R&D expense,
offset by lower selling expenses related to lower commissions paid
against a lower sales base and lower legal expenses in 2006 compared
to the same period in 2005.
We expect to see increased R&D expenses through the balance of the
year as we continue to expand our LED product development activities
aimed at positioning Super Vision at the forefront of the industry in
high wattage applications.
As a result of the increased operating expenses and lower revenue,
Super Vision reported a net loss of approximately $396,000 or $0.16
per common and diluted share for the first quarter of 2006 compared to
a net loss of approximately $145,000 or $0.06 per common and diluted
share in the same quarter of 2005.
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 quarter ended March 31, 2006, EBITDA
was a loss of approximately $154,000 compared to income of
approximately $86,000 in the same period of 2005.
The Company had cash and investments of approximately $1.05
million and working capital of $3.81 million at March 31, 2006.
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.
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Super Vision International, Inc.
Condensed Statements of Operations (Unaudited)
Three Months
Ended March 31,
2006 2005
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Revenues $2,679,667 $2,883,756
Cost of sales 1,708,140 1,691,526
----------- -----------
Gross margin 971,527 1,192,230
Operating expenses:
Selling, general and administrative 1,197,115 1,165,165
Research and development 169,884 107,602
----------- -----------
Total operating expenses 1,366,999 1,272,767
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Operating loss (395,472) (80,537)
Non-Operating Income (Expense):
Interest income 11,742 9,892
Interest expense (87,312) (94,386)
Other income 74,621 19,721
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Total non-operating income
(expense) (949) (64,773)
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Net loss $ (396,421) $ (145,310)
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Net Loss Per Common Share:
Basic and diluted $ (0.16) $ (0.06)
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Weighted average shares outstanding:
Basic and diluted 2,544,670 2,542,078
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Selected Consolidated Balance Sheet Data
Unaudited Audited
As of
-----------------------
March 31, December 31,
2006 2005
Cash and Investments $1,051,007 $1,274,150
Current Assets $6,385,566 $6,311,190
Total Assets $9,480,578 $9,323,808
Current Liabilities $2,577,789 $1,995,530
Total Liabilities $4,809,141 $4,288,386
Total Shareholders Equity $4,671,437 $5,035,422
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Reconciliation of Non-GAAP Financial Measure
The following table reconciles GAAP to non-GAAP financial measure:
Earnings Before Interest Taxes Depreciation and Amortization
(EBITDA)
(Unaudited) Quarter Ended March 31,
----------------------------------------
2006 2005 Change %
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Net Loss $(396,421) $(145,310) $(251,111) (173%)
Plus:
Interest 87,312 94,386 (7,074) (7%)
Depreciation 142,017 126,650 15,367 12%
Amortization 13,046 10,611 2,435 23%
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EBITDA $(154,046) $ 86,337 $(240,383) (278%)
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% of Revenues (6%) 3%
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