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
third quarter and nine months ended September 30, 2006.
Total revenue for the quarter was approximately $2.8 million, down 9% or
$290,000 from approximately $3.1 million in the third quarter of 2005.
Revenues were down 4% for both the Commercial lighting and Pool and Spa
lighting divisions driven by lower sales of fiber optic products.
International revenue saw a 25% decrease as compared to the same period
in 2005. However, LED sales were up 70% or $188,000 in Commercial
lighting for the quarter compared to the same period in 2005 and Pool
and Spa LED sales were up $55,000 or 9% as sales of our new SaVi™
brand lighting products continue to gain market acceptance.
Overall, revenue from fiber optic sales in the third quarter decreased
by 24%, or approximately $367,000 offset in part by a $99,000 or 7%
increase in revenue from sales of our LED lighting systems. Fiber optic
sales decreased mainly due to the timing of project releases in the
Commercial market and lower demand for fiber optics in the Pool and Spa
market for the quarter. International sales continued to see
significantly lower revenues in both fiber optics and LED products in
three major territories for the Company; the United Kingdom, the Middle
East and China as the Company transitions to new distributors in these
markets. This revenue decline was slightly offset by higher sales in
Mexico and Europe.
Gross margin for the quarter ended September 30, 2006 was approximately
$1,056,000 or 38% as compared to approximately $1,279,000 or 41% for the
quarter ended September 30, 2005. The decrease in gross margin for the
quarter was mainly due to the 24% decline in revenue from higher gross
margin fiber optic sales compared to the same period in 2005.
Additionally lower revenues for the period did not absorb our fixed cost
of sales at the same rate thus resulting in a lower gross margin in the
third quarter of 2006.
Direct gross margin, which is revenue less material cost, was 58% for
the third quarters of both 2006 and 2005 despite the decrease in revenue
from fiber optic products. Management continues its focus on material
cost reductions especially in the Company’s
LED product lines where a majority of revenue came from in the third
quarter of 2006.
Operating expenses in the third quarter of 2006 were approximately $1.4
million compared to $1.2 million in the same quarter of 2005. The
increase in operating expenses was primarily due to increased legal and
professional fees and commission expense offset by lower wages and
benefits and lower R&D expenses as new products were completed compared
to the same period in 2005.
As a result of the increased operating expenses and lower revenue, Super
Vision reported a net loss for the three months ended September 30, 2006
of approximately $383,000, or $0.15 per basic and diluted common share,
as compared to net income of approximately $21,000, or $0.01 per basic
and diluted common share, for the quarter ended September 30, 2005.
“Although our LED business in the U.S.
continues to grow and we are seeing significant traction from our new
SaVi products, the softness in our fiber optic business, especially in
the international market, could not be offset in the period. We believe
that the major cost reduction efforts we implemented in July and August,
including a 19% reduction in overall workforce will begin to fully
impact our financial results in the 4th quarter
and we are acutely focused on increasing our revenue while reducing our
inventory and controllable expenses,” stated
Mike Bauer, President and CEO of Super Vision. “Overall,
we are flat year over year in both our Commercial and Pool and Spa
divisions and down in our international business, where the decrease in
sales is tied to three specific markets, two of which are markets where
we changed distributors. However, our LED sales are up 21% year over
year in the commercial market and our new SaVi products are beginning to
gain momentum. We feel we are making progress in expanding the breadth
of our product line to capitalize on the growing demand for LED lighting
systems,” continued Bauer.
Total revenues for the nine months ended September 30, 2006 were
approximately $8,617,000 as compared to approximately $9,180,000 for the
nine months ended September 30, 2005, a decrease of 6%. Year to date
revenue in both the Commercial lighting and Pool and Spa lighting
division was virtually flat with 2005, while sales through the
international channel were down 23%, or approximately $543,000, for the
nine month period, driving the overall decrease as compared to the same
period in 2005. Commercial lighting sales, which were down 18% at the
end of the first quarter of 2006, were behind by approximately $17,000
or 1% for the first nine months of 2006 compared to the same period in
2005. A 21% increase in the sale of LED lighting products and systems
offset decreased sales in fiber optic lighting for the nine month
period. Pool and Spa sales were also flat for the nine months ended
September 30, 2006 over the same period in 2005, with sales of new
products and market share gains offsetting a softer overall market
related to the downturn in residential construction in the U.S.
Gross margin for the first nine months of 2006 was 42%. Excluding the
benefit of a $240,000 legal settlement in the second quarter of 2005,
gross margin for the nine months ended September 30, 2005 was 41%. The
slight increase in comparative gross margin for the nine months ended
September 30, 2006 over the comparative period in 2005, excluding the
one time legal settlement, resulted primarily from lower material costs
and the capitalization of labor, overhead and freight on higher
inventory balances at September 30, 2006 brought about by higher
purchases during the second quarter compared to the prior period. Direct
gross margin, which is revenue less material cost, increased to 59% for
the nine month period, compared to 57% in the same period of 2005 as
material cost reductions continue to be a major focus for the Company.
Operating expenses in the first nine months of 2006 were approximately
$4.3 million compared to $3.8 million in the same period of 2005. The
increase in operating expenses was primarily due to increased legal and
professional expenses and increased marketing expenses related to the
launch of new products.
“Despite our top line softness primarily
driven by lower international sales, we have had success in our efforts
to reduce our direct cost of sales and improve our direct gross margins
across the board,” stated Dan Regalado, the
Company’s Executive Vice President and CFO. “This
is critical to our business as our LED product lines, which have
traditionally lower gross margin, continue to grow as a percentage of
our revenue. Direct gross margin on our LED products sold in the first
nine months of 2006 improved by 3 full points to 50% compared to 47% in
the same period in 2005 as direct gross margins from our fiber optic
products were maintained at 67% for both comparable periods. Along with
the various cost reduction efforts we have undertaken in the third
quarter, we will continue to focus on improving our direct gross
margins, driving more initiatives to streamline our production and
product assembly and lowering costs,”
concluded Mr. Regalado.
The net loss for the nine months ended September 30, 2006 was
approximately $724,000, or $0.28 per basic and diluted common share, as
compared to net income of approximately $27,000, or $0.01 per basic and
diluted common share, for the nine months ended September 30, 2005. Net
income for the nine months ended September 30, 2005 included a
non-recurring $240,000 legal settlement. Excluding this item, the nine
months ended September 30, 2005 would have reported a net loss of
approximately $213,000. Other factors with regards to the net loss in
2006 include reduced revenues, increased selling, general and
administrative expenses and lower gross margins for the period.
EBITDA for the nine months ended September 30, 2006 was approximately
$42,000 as compared to approximately $721,000 for the nine months ended
September 30, 2005. Excluding the one time benefit of a $240,000 legal
settlement in the first half of 2005, EBITDA for the first nine months
of 2005 would have been approximately $481,000, or 5% of revenue. The
decline in EBITDA was primarily the result of reduced revenues and
increased selling, general and administrative expenses as discussed
above, increased interest expense on the Company’s
line of credit facility and higher depreciation and amortization in the
period compared to 2005.
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 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.
Super Vision International, Inc.
Condensed Statements of Operations –
Unaudited
Three Months
Nine Months
Ended September 30,
Ended September 30,
2006
2005
2006
2005
Revenues
$
2,803,289
$
3,093,166
$
8,617,301
$
9,179,673
Cost of sales
1,747,309
1,814,662
4,969,807
5,181,428
Gross margin
1,055,980
1,278,504
3,647,494
3,998,245
Operating expenses:
Selling, general and administrative
1,277,976
1,064,978
3,880,999
3,425,710
Research and development
120,677
147,184
428,987
406,064
Gain on disposal of property and equipment
--
--
(300)
(6,000)
Total operating expenses
1,398,653
1,212,162
4,309,686
3,825,774
Operating Income (Loss)
(342,673)
66,342
(662,192)
172,471
Non-Operating Income (Expense):
Interest income
11,270
15,529
29,669
38,636
Interest expense
(109,659)
(91,294)
(287,630)
(278,919)
Other income
57,775
30,108
196,434
95,299
Total non-operating income (expense)
(40,614)
(45,657)
(61,527)
(144,984)
Net Income (Loss)
$
(383,287)
$
20,685
$
(723,719)
$
27,486
Net Income (Loss) Per Common Share:
Basic and diluted
$
(0.15)
$
0.01
$
(0.28)
$
0.01
Weighted average shares outstanding:
Basic
2,544,863
2,542,132
2,544,798
2,542,096
Diluted
2,544,863
2,591,871
2,544,798
2,570,423
Selected Consolidated Balance Sheet Data
(Unaudited)
(Audited)
As of
September 30, 2006
December 31, 2005
Cash and Unrestricted Investments
$
179,160
$
1,274,150
Restricted Investments
$
500,000
$
-
Current Assets
$
6,917,177
$
6,311,190
Total Assets
$
9,845,778
$
9,323,808
Current Liabilities
$
3,310,709
$
1,995,530
Total Liabilities
$
5,402,957
$
4,288,386
Total Shareholders Equity
$
4,442,821
$
5,035,422
Reconciliation of Non-GAAP Financial Measure
The following table reconciles GAAP
to non-GAAP financial measures:
(Unaudited) Quarter Ended September 30,
2006
2005
Change
%
Net income (loss)
$ (383,287)
$ 20,685
$ (403,972)
(1,953%)
Plus:
Interest
109,659
91,295
18,364
20%
Depreciation
152,083
130,479
21,604
17%
Amortization
11,743
7,533
4,210
56%
Taxes
-
-
-
-
EBITDA
$ (109,802)
$ 249,992
$ (359,794)
(144%)
% of Revenues
(4%)
8%
(Unaudited) Nine Months Ended September 30,
2006
2005
Change
%
Net income (loss)
$ (723,719)
$ 27,486
$ (751,205)
(2,733%)
Plus:
Interest
287,630
278,919
8,711
3%
Depreciation
440,727
385,549
55,178
14%
Amortization
37,695
28,935
8,760
30%
Taxes
--
--
EBITDA
$ 42,333
$ 720,899
$ (678,556)
(94%)
% of Revenues
0%
8%
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 third quarter and nine months ended September 30, 2006.
Total revenue for the quarter was approximately $2.8 million, down
9% or $290,000 from approximately $3.1 million in the third quarter of
2005. Revenues were down 4% for both the Commercial lighting and Pool
and Spa lighting divisions driven by lower sales of fiber optic
products. International revenue saw a 25% decrease as compared to the
same period in 2005. However, LED sales were up 70% or $188,000 in
Commercial lighting for the quarter compared to the same period in
2005 and Pool and Spa LED sales were up $55,000 or 9% as sales of our
new SaVi(TM) brand lighting products continue to gain market
acceptance.
Overall, revenue from fiber optic sales in the third quarter
decreased by 24%, or approximately $367,000 offset in part by a
$99,000 or 7% increase in revenue from sales of our LED lighting
systems. Fiber optic sales decreased mainly due to the timing of
project releases in the Commercial market and lower demand for fiber
optics in the Pool and Spa market for the quarter. International sales
continued to see significantly lower revenues in both fiber optics and
LED products in three major territories for the Company; the United
Kingdom, the Middle East and China as the Company transitions to new
distributors in these markets. This revenue decline was slightly
offset by higher sales in Mexico and Europe.
Gross margin for the quarter ended September 30, 2006 was
approximately $1,056,000 or 38% as compared to approximately
$1,279,000 or 41% for the quarter ended September 30, 2005. The
decrease in gross margin for the quarter was mainly due to the 24%
decline in revenue from higher gross margin fiber optic sales compared
to the same period in 2005. Additionally lower revenues for the period
did not absorb our fixed cost of sales at the same rate thus resulting
in a lower gross margin in the third quarter of 2006.
Direct gross margin, which is revenue less material cost, was 58%
for the third quarters of both 2006 and 2005 despite the decrease in
revenue from fiber optic products. Management continues its focus on
material cost reductions especially in the Company's LED product lines
where a majority of revenue came from in the third quarter of 2006.
Operating expenses in the third quarter of 2006 were approximately
$1.4 million compared to $1.2 million in the same quarter of 2005. The
increase in operating expenses was primarily due to increased legal
and professional fees and commission expense offset by lower wages and
benefits and lower R&D expenses as new products were completed
compared to the same period in 2005.
As a result of the increased operating expenses and lower revenue,
Super Vision reported a net loss for the three months ended September
30, 2006 of approximately $383,000, or $0.15 per basic and diluted
common share, as compared to net income of approximately $21,000, or
$0.01 per basic and diluted common share, for the quarter ended
September 30, 2005.
"Although our LED business in the U.S. continues to grow and we
are seeing significant traction from our new SaVi products, the
softness in our fiber optic business, especially in the international
market, could not be offset in the period. We believe that the major
cost reduction efforts we implemented in July and August, including a
19% reduction in overall workforce will begin to fully impact our
financial results in the 4th quarter and we are acutely focused on
increasing our revenue while reducing our inventory and controllable
expenses," stated Mike Bauer, President and CEO of Super Vision.
"Overall, we are flat year over year in both our Commercial and Pool
and Spa divisions and down in our international business, where the
decrease in sales is tied to three specific markets, two of which are
markets where we changed distributors. However, our LED sales are up
21% year over year in the commercial market and our new SaVi products
are beginning to gain momentum. We feel we are making progress in
expanding the breadth of our product line to capitalize on the growing
demand for LED lighting systems," continued Bauer.
Total revenues for the nine months ended September 30, 2006 were
approximately $8,617,000 as compared to approximately $9,180,000 for
the nine months ended September 30, 2005, a decrease of 6%. Year to
date revenue in both the Commercial lighting and Pool and Spa lighting
division was virtually flat with 2005, while sales through the
international channel were down 23%, or approximately $543,000, for
the nine month period, driving the overall decrease as compared to the
same period in 2005. Commercial lighting sales, which were down 18% at
the end of the first quarter of 2006, were behind by approximately
$17,000 or 1% for the first nine months of 2006 compared to the same
period in 2005. A 21% increase in the sale of LED lighting products
and systems offset decreased sales in fiber optic lighting for the
nine month period. Pool and Spa sales were also flat for the nine
months ended September 30, 2006 over the same period in 2005, with
sales of new products and market share gains offsetting a softer
overall market related to the downturn in residential construction in
the U.S.
Gross margin for the first nine months of 2006 was 42%. Excluding
the benefit of a $240,000 legal settlement in the second quarter of
2005, gross margin for the nine months ended September 30, 2005 was
41%. The slight increase in comparative gross margin for the nine
months ended September 30, 2006 over the comparative period in 2005,
excluding the one time legal settlement, resulted primarily from lower
material costs and the capitalization of labor, overhead and freight
on higher inventory balances at September 30, 2006 brought about by
higher purchases during the second quarter compared to the prior
period. Direct gross margin, which is revenue less material cost,
increased to 59% for the nine month period, compared to 57% in the
same period of 2005 as material cost reductions continue to be a major
focus for the Company.
Operating expenses in the first nine months of 2006 were
approximately $4.3 million compared to $3.8 million in the same period
of 2005. The increase in operating expenses was primarily due to
increased legal and professional expenses and increased marketing
expenses related to the launch of new products.
"Despite our top line softness primarily driven by lower
international sales, we have had success in our efforts to reduce our
direct cost of sales and improve our direct gross margins across the
board," stated Dan Regalado, the Company's Executive Vice President
and CFO. "This is critical to our business as our LED product lines,
which have traditionally lower gross margin, continue to grow as a
percentage of our revenue. Direct gross margin on our LED products
sold in the first nine months of 2006 improved by 3 full points to 50%
compared to 47% in the same period in 2005 as direct gross margins
from our fiber optic products were maintained at 67% for both
comparable periods. Along with the various cost reduction efforts we
have undertaken in the third quarter, we will continue to focus on
improving our direct gross margins, driving more initiatives to
streamline our production and product assembly and lowering costs,"
concluded Mr. Regalado.
The net loss for the nine months ended September 30, 2006 was
approximately $724,000, or $0.28 per basic and diluted common share,
as compared to net income of approximately $27,000, or $0.01 per basic
and diluted common share, for the nine months ended September 30,
2005. Net income for the nine months ended September 30, 2005 included
a non-recurring $240,000 legal settlement. Excluding this item, the
nine months ended September 30, 2005 would have reported a net loss of
approximately $213,000. Other factors with regards to the net loss in
2006 include reduced revenues, increased selling, general and
administrative expenses and lower gross margins for the period.
EBITDA for the nine months ended September 30, 2006 was
approximately $42,000 as compared to approximately $721,000 for the
nine months ended September 30, 2005. Excluding the one time benefit
of a $240,000 legal settlement in the first half of 2005, EBITDA for
the first nine months of 2005 would have been approximately $481,000,
or 5% of revenue. The decline in EBITDA was primarily the result of
reduced revenues and increased selling, general and administrative
expenses as discussed above, increased interest expense on the
Company's line of credit facility and higher depreciation and
amortization in the period compared to 2005.
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 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 Nine Months
Ended September 30, Ended September 30,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenues $2,803,289 $3,093,166 $8,617,301 $9,179,673
Cost of sales 1,747,309 1,814,662 4,969,807 5,181,428
---------- ---------- ---------- ----------
Gross margin 1,055,980 1,278,504 3,647,494 3,998,245
Operating expenses:
Selling, general and
administrative 1,277,976 1,064,978 3,880,999 3,425,710
Research and
development 120,677 147,184 428,987 406,064
Gain on disposal of
property and equipment -- -- (300) (6,000)
---------- ---------- ---------- ----------
Total operating
expenses 1,398,653 1,212,162 4,309,686 3,825,774
---------- ---------- ---------- ----------
Operating Income (Loss) (342,673) 66,342 (662,192) 172,471
Non-Operating Income
(Expense):
Interest income 11,270 15,529 29,669 38,636
Interest expense (109,659) (91,294) (287,630) (278,919)
Other income 57,775 30,108 196,434 95,299
---------- ---------- ---------- ----------
Total non-operating
income (expense) (40,614) (45,657) (61,527) (144,984)
---------- ---------- ---------- ----------
Net Income (Loss) $ (383,287)$ 20,685 $ (723,719)$ 27,486
========== ========== ========== ==========
Net Income (Loss) Per
Common Share:
Basic and diluted $ (0.15)$ 0.01 $ (0.28)$ 0.01
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic 2,544,863 2,542,132 2,544,798 2,542,096
========== ========== ========== ==========
Diluted 2,544,863 2,591,871 2,544,798 2,570,423
========== ========== ========== ==========
*T
-0-
*T
Selected Consolidated Balance Sheet Data
(Unaudited) (Audited)
As of
--------------------------
September 30, December 31,
2006 2005
------------- ------------
Cash and Unrestricted Investments $ 179,160 $ 1,274,150
Restricted Investments $ 500,000 $ -
Current Assets $ 6,917,177 $ 6,311,190
Total Assets $ 9,845,778 $ 9,323,808
Current Liabilities $ 3,310,709 $ 1,995,530
Total Liabilities $ 5,402,957 $ 4,288,386
Total Shareholders Equity $ 4,442,821 $ 5,035,422
*T
-0-
*T
Reconciliation of Non-GAAP Financial Measure
The following table reconciles GAAP to non-GAAP financial measures:
----------------------------------------------------------------------
(Unaudited) Quarter Ended September 30,
----------------------------------------
2006 2005 Change %
----------------------------------------
Net income (loss) $(383,287) $20,685 $(403,972) (1,953%)
Plus:
Interest 109,659 91,295 18,364 20%
Depreciation 152,083 130,479 21,604 17%
Amortization 11,743 7,533 4,210 56%
Taxes - - - -
========================================
EBITDA $(109,802) $249,992 $(359,794) (144%)
========================================
% of Revenues (4%) 8%
====================
*T
-0-
*T
(Unaudited) Nine Months Ended September 30,
-------------------------------------------
2006 2005 Change %
-------------------------------------------
Net income (loss) $(723,719) $27,486 $(751,205) (2,733%)
Plus:
Interest 287,630 278,919 8,711 3%
Depreciation 440,727 385,549 55,178 14%
Amortization 37,695 28,935 8,760 30%
Taxes -- --
-------------------------------------------
EBITDA $42,333 $720,899 $(678,556) (94%)
===========================================
% of Revenues 0% 8%
======================
*T