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 quarter ended June 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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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, Including Area Code)
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 12, 1998:
Class A Common Stock, $.001
par value 1,770,049 shares
Class B Common Stock, $.001
par value 483,264 shares
Traditional Small Business Disclosure Format
Yes X No
--- ---
SUPER VISION INTERNATIONAL, INC.
SUPER VISION INTERNATIONAL, INC.
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Condensed Financial Statements:
Condensed Balance Sheets as of June 30, 1998 and December 31, 1997 1
Condensed Statements of Operations for the Six Months Ended June 30,
1998 and 1997 2
Condensed Statement of Stockholders' Equity 3
Condensed Statements of Cash Flows for the Six Months Ended June 30,
1998 and 1997 4
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
SUPER VISION INTERNATIONAL, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 1,458,899 $ 2,478,145
Investments 104,651 102,121
Trade accounts receivable, less allowance for
doubtful accounts of $81,511 and $156,517 1,522,694 1,501,340
Inventory 2,514,688 2,142,754
Advances to employees 11,844 14,313
Deferred income taxes 175,185 119,185
Other assets 240,856 98,812
------------ ------------
Total current assets 6,028,817 6,456,670
Property & Equipment 6,056,694 5,873,909
Accumulated depreciation and amortization (777,534) (526,436)
------------ ------------
Net property & equipment 5,279,160 5,347,473
Deposits on Equipment 3,900 -
Deferred Income Taxes 36,714 39,631
Other Assets 205,917 183,034
------------ ------------
$ 11,554,508 $ 12,026,808
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable $ 627,763 $ 935,943
Accrued compensation and benefits - 45,225
Deposits 19,191 97,839
Accrued warranty 3,000 -
------------ ------------
Total current liabilities 649,954 1,079,007
Obligation Under Capital Lease 3,176,436 3,148,359
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 authorized, 1,770,049 issued and
outstanding 1,770 1,770
Class B common stock, $.001 par value, 3,389,134 shares
authorized, 483,264 issued and outstanding 483 483
Additional paid-in capital 8,225,179 8,201,040
Retained earnings (deficit) (499,314) (403,851)
------------ ------------
Total stockholders' equity 7,728,118 7,799,442
------------ ------------
$ 11,554,508 $ 12,026,808
============ ============
See accompanying notes to condensed financial statements.
1
SUPER VISION INTERNATIONAL, INC.
CONDENSED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
Revenues $ 2,595,096 $ 2,541,851 $ 4,913,980 $ 4,745,722
Cost and Expenses:
Cost of sales 1,658,852 1,524,263 3,029,222 2,844,615
Selling, general and administrative 932,145 634,029 1,716,855 1,300,438
Research and development 73,798 83,176 151,879 131,995
----------- ----------- ----------- -----------
Total costs and expenses 2,664,795 2,241,468 4,897,956 4,277,048
----------- ----------- ----------- -----------
Operating Income (Loss) (69,699) 300,383 16,024 468,674
----------- ----------- ----------- -----------
Non-Operating Income (Expense):
Interest income 24,683 37,456 57,319 75,772
Interest expense (110,012) - (218,987) -
Loss on disposal of assets - - (2,902) -
----------- ----------- ----------- -----------
Total non-operating income (expense) (85,329) 37,456 (164,570) 75,772
----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes (155,028) 337,839 (148,546) 544,446
Income Tax Expense (Benefit) (56,000) 109,894 (53,083) 167,838
----------- ----------- ----------- -----------
Net Income (Loss) $ (99,028) $ 227,945 $ (95,463) $ 376,608
=========== =========== =========== ===========
Income (Loss) Per Common Share:
Basic $ (0.04) $ 0.11 $ (0.04) $ 0.18
=========== =========== =========== ===========
Diluted $ (0.04) $ 0.10 $ (0.04) $ 0.17
=========== =========== =========== ===========
See accompanying notes to condensed financial statements.
2
SUPER VISION INTERNATIONAL, INC.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY - UNAUDITED
COMMON STOCK
----------------------------------------------------------
CLASS A CLASS B ADDITIONAL RETAINED
--------------------------- --------------------------- PAID-IN EARNINGS
SHARES AMOUNT SHARES AMOUNT CAPITAL (DEFICIT)
----------- ----------- ----------- ------------ ------------- ------------
Balance, December 31, 1997 1,770,049 $ 1,770 483,264 $ 483 $ 8,201,040 $ (403,851)
Issue common stock warrants - - - - 24,139 -
Net loss for the six
months ended June 30, 1998 - - - - - (95,463)
----------- ----------- ----------- ----------- -------------- -------------
Balance, June 30, 1998 1,770,049 $ 1,770 483,264 $ 483 $ 8,225,179 $ (499,314)
=========== ========== =========== =========== ============== =============
See accompanying notes to condensed financial statements.
3
SUPER VISION INTERNATIONAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS - UNAUDITED
SIX MONTHS
ENDED JUNE 30,
1998 1997
----------- -----------
Cash Flows from Operating Activities:
Net income (loss) $ (95,463) $ 376,608
----------- -----------
Adjustments to reconcile net income (loss) to net cash used
in operating activities:
Depreciation 259,640 109,182
Accretion of capital lease obligation 28,077 -
Deferred income tax (53,083) -
Issuance cost 24,139 -
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable, net (21,354) (432,629)
Inventory (371,934) (176,656)
Other assets (139,636) 48,559
Increase (decrease) in:
Accounts payable (308,180) (297,212)
Accrued compensation and benefits (42,225) -
Accrued and other liabilities - (128,188)
Deposits (78,648) 11,610
----------- -----------
Total adjustments (703,204) (865,334)
----------- -----------
Net cash used in operating activities (798,667) (488,726)
----------- -----------
Cash Flows from Investing Activities:
Purchase of investments (104,651) -
Proceeds from investments 102,121 -
Purchase of property, plant and equipment (187,372) (54,074)
Acquisition of patents and trademarks (26,777) (12,411)
Deposits on equipment (3,900) (386,999)
----------- -----------
Net cash used in investing activities (220,579) (453,484)
----------- -----------
Cash Flows from Financing Activities:
Issuance costs - (15,000)
Proceeds from exercise of employee stock options - 22,331
----------- -----------
Net cash provided by financing activities - 7,331
----------- -----------
Net Decrease in Cash and Cash Equivalents (1,019,246) (934,879)
Cash and Cash Equivalents, beginning of period 2,478,145 3,327,965
----------- -----------
Cash and Cash Equivalents, end of period $ 1,458,899 $ 2,393,086
=========== ===========
See accompanying notes to condensed financial statements.
4
SUPER VISION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
For the Six Months Periods Ended June 30, 1998 and 1997
1. BASIS OF PRESENTATION:
In the opinion of the Company, the accompanying unaudited 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 Form 10-KSB dated April 13, 1998, filed with the Securities
and Exchange Commission.
As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 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 loss or shareholders' equity for 1998 or 1997.
2. STOCK OPTION PLAN:
The Company has a stock option plan that provides for the grant of
incentive stock options and nonqualified stock options for 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 of the stock option plan for
the six-month period ended June 30, 1998:
OPTIONS NUMBER OPTION
AVAILABLE FOR OF PRICE
FUTURE GRANT SHARES PER SHARE
------------- ------ -------------
Balance, January 1, 1998 22,702 272,095 $5.00 - $9.25
Options authorized 100,000
Options granted (14,600) 14,600 $3.69 - $9.25
Options exercised - -
Options cancelled 13,100 (13,100) $5.00 - $9.13
-------- --------
Balance, June 30, 1998 121,202 273,595
======== ========
Options granted vest ratably over a three-year period or vest based on
achievement of performance criteria. As of June 30, 1998, 165,702 options were
vested and exercisable.
5
SUPER VISION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
For the Six Months Periods Ended June 30, 1998 and 1997
3. INCOME TAXES:
The components of the net deferred tax asset recognized in the
accompanying balance sheet at June 30, 1998 are as follows:
Deferred tax liability $ (133,834)
Deferred tax asset 429,362
Valuation allowance (83,629)
------------
$ 211,899
============
The types of temporary differences between the tax basis of assets and
liabilities and their financial statement reporting amounts are
attributable principally to depreciation methods, deferred gains, and
different accounting methods used.
As of June 30, 1998, the Company had approximately $813,000 in net
operating loss carryforwards for federal and state income tax purposes,
which expire in 2012.
4. INVENTORY:
Inventory at June 30, 1998 and December 31, 1997 consisted of the
following components:
JUNE 30, DECEMBER 31,
1998 1997
----------- -----------
Raw materials $ 1,960,497 $ 1,635,278
Work in progress 3,000 -
Finished goods 603,236 559,521
----------- -----------
2,566,733 2,194,799
Less: Reserve for excess inventory (52,045) (52,045)
----------- -----------
$ 2,514,688 $ 2,142,754
=========== ===========
6
SUPER VISION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
For the Six Months Periods Ended June 30, 1998 and 1997
5. 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, and became effective June 15, 1997, extending through June 15,
2012.
Assets recorded under capital lease and included in Property, Plant and
Equipment are as follows:
Office/Warehouse building $ 3,081,000
Less accumulated amortization (204,556)
-----------
$ 2,876,444
===========
Future minimum annual lease payments for the five years subsequent to
June 30, 1998 and in the aggregate are as follows:
1999 $ 384,975
2000 570,150
2001 581,520
2002 605,750
2003 610,596
2004 and thereafter 6,407,679
-----------
Minimum lease payments 9,160,670
Less amount representing interest and executory costs (5,984,234)
-----------
Present value of net minimum lease payments under capital lease $ 3,176,436
===========
Deposits paid under this lease agreement totaled $58,167 at June 30,
1998.
7
SUPER VISION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
For the Six Months Periods Ended June 30, 1998 and 1997
6. EARNINGS (LOSS) PER SHARE:
In 1997, the FASB issued SFAS No. 128, Earnings per Share. This
statement replaced the calculation of primary and fully diluted
earnings per share with basic and diluted earnings per share. Unlike
primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities.
Diluted earnings per share are very similar to the previously reported
fully diluted earnings per share. All earnings per share amounts for
all periods have been presented, and where appropriate, restated to
conform to the Statement 128 requirements. The following table sets
forth the computation of basic and diluted earnings per share:
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
Numerator:
Net income (loss) (numerator for basic
and diluted earnings per share) $ (99,028) $ 227,945 $ (95,463) $ 376,608
----------- ----------- ----------- -----------
Denominator:
Denominator for basic earnings per
share - weighted average shares 2,227,183 2,138,736 2,227,183 2,138,410
Effect of dilutive securities:
Options - 24,749 - 29,169
Warrants - 47,878 - 111,436
----------- ----------- ----------- -----------
Dilutive potential shares - 72,627 - 140,605
Denominator for diluted earnings per
share - adjusted weighted average shares 2,227,244 2,211,363 2,229,702 2,279,015
Basic earnings (loss) per share $ (0.04) $ 0.11 $ (0.04) $ 0.18
=========== =========== =========== ===========
Diluted earnings (loss) per share $ (0.04) $ 0.10 $ (0.04) $ 0.17
=========== =========== =========== ===========
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.
8
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
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, 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 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(TM) cable and light sources, point of purchase fiber optic signs and
displays and sales of fiber optic landscape and task lighting systems. Total
revenues for the three months ("1998 quarter") and six months ended June 30,
1998 ("1998 six months") were approximately $2,596,000 and $4,914,000,
respectively, as compared to approximately $2,542,000 and $4,746,00 for the
three months ("1997 quarter") and six months ended June 30, 1997 ("1997 six
months"). This represented increases of 2% and 4%, respectively. The increase in
revenues is primarily attributable to domestic sales of the Company's
architectural lighting products. The Company's improved lighting systems have
been well received in the architectural lighting community, and the Company has
expanded marketing and sales efforts in this area. Modest revenue growth was
also seen in the Company's pool and spa division, although sales of the
Company's pool and spa products were below forecast. Sales in the pool and spa
industry have been weakened by continued wet weather conditions in the Western
United States. Management believes the delay in the building season in the
Western United States may result in an extended construction season in this
region in the remainder of 1998. The Company further noted that export sales
were well below historical levels. Exports to the Pacific Rim were 80% below
forecast for the 1998 six months. Management believes this is due to Asian
regional economic difficulties and the strength of the U.S. dollar which has
made the Company's products more expensive relative to other conventional
lighting products. The Company is concentrating international marketing efforts
in the European and South American regions at this time. Revenues during the
1997 six months included approximately $830,000 of revenue recognized under a
long-term contract completed in May 1997 for what the Company believes to be the
world's largest custom fiber optic display. Management believes the overall
market available to fiber optic lighting products continues to increase as the
commercial, sign and pool and spa industries become aware of the benefits and
applications of fiber optics in these market segments.
Cost of sales were approximately $1,659,000, or 64% of revenues, during the 1998
quarter and $3,029,000, or 62% of revenues, for the 1998 six months as compared
to approximately $1,524,000, or 60% of revenues, for the 1997 quarter and
$2,845,000, or 60% or revenues, for the 1997 six months. The gross margin was
36% and 38%, respectively, for the 1998 quarter and 1998 six months as compared
to 40% for the both 1997 quarter and 1997 six months. Gross margins for the 1998
quarter and six months were adversely affected by a sales mix that favored light
sources as opposed to lighting systems and fiber products. Management
anticipates that the sales mix will normalize over the course of the full year.
Management further noted that the lower than anticipated sales volume increased
fixed overhead costs per unit produced. The increase in overall fixed overhead
costs resulted from the Company's relocation in August 1997 from its previous
facilities totaling 27,000 square feet to its new facility of 70,000 square
feet. Fixed overhead costs include rent, utilities, insurance and other costs of
facility maintenance and operation. Management believes that the increased costs
associated with the new facility are necessary for the Company to effectively
compete in the long term in the market and to service the potential increased
sales volumes which Management believes may result from continued marketing and
sales efforts.
Selling, general and administrative expenses were approximately $932,000 and
$1,717,000 during the 1998 quarter and 1998 six months, respectively, as
compared to approximately $634,000 and $1,300,000 for the 1997 quarter and 1997
six months, respectively. This represented increases of 47% and 32%,
respectively. During the 1998 quarter, the Company attended eight major trade
shows compared to three in the 1997 quarter. Advertising expenditures for trade
publication placements were significantly increased to support these trade
events.
9
Literature expenses and educational training seminars were also increased as the
Company received greatly increased inquiries for product catalogs and requests
for applications training, which Management believes is a result of the trade
advertising and show attendance. Management believes this increased exposure may
result in future revenue growth for the Company. The Company has developed
several new products specifically for its target markets and expenses were
incurred during the 1998 six months to introduce these products. Additionally,
the Company had increased personnel levels during late 1997 in the areas of
Sales, Marketing, and Customer Service in order to more effectively penetrate
and service the selected markets for the Company's products. While Management
believes these marketing and sales expenses are critical to potential future
revenue growth, Management is implementing more cost effective methods of
developing and delivering these materials and training services including
utilization of electronic catalogs and internet based systems.
Research and development costs were approximately $74,000 and $152,000,
respectively, during the 1998 quarter and 1998 six months as compared to
approximately $83,000 and $132,000, respectively, during the 1997 quarter and
1997 six months. This represented a decrease of 11% for the 1998 quarter and an
increase of 15% for the 1998 six months. During the 1998 quarter, the Company
undertook several joint product development efforts with key vendors and
technology partners to attempt to reduce fixed research and development costs.
Management believes that these relationships may allow the Company to accelerate
product development while reducing development costs and cycle times. During the
1998 six months, the Company increased personnel levels in the area of research
and development in order to further shorten development time of several new
light sources and to accelerate a cost reduction and re-engineering program in
several core product categories to reduce manufacturing costs of these product
lines. Further increases in costs were incurred in the development of products
designed to unique customer specifications under rapid development cycles, which
the Company is now marketing to specific niche target markets. Management
believes the increased expenditures for engineering and research and development
are necessary to ensure that the Company continues to expand its product
offerings to the market and to maintain a leadership position in fiber optic
lighting technology.
Interest income is derived from the short-term investments of liquid cash
balances in low risk commercial paper and money market funds. Net interest
income for the 1998 quarter and 1998 six months was approximately $25,000 and
$57,000, respectively, as compared to approximately $37,000 and $76,000,
respectively, for the 1997 quarter and 1997 six months. The decrease is
attributable to lower average cash balances available for investment during the
1998 six months. The Company utilized cash during the 1998 six months to expand
inventory in advance of the traditional summer building season in the pool and
spa and architectural lighting markets.
Interest expense increased from approximately $0 for the 1997 quarter and 1997
six months to approximately $110,000 and $219,000 for the 1998 quarter and 1998
six months. The increase is attributable to the accounting treatment for the
lease on the Company's new facility as a capital lease under Statement of
Financial Accounting Standards No. 13, Accounting for Leases.
Provision for income taxes included a tax benefit of approximately $56,000 and
$53,000, respectively, for the 1998 quarter and 1998 six months compared to
income tax expense of $110,000 and $168,000, respectively, for the 1997 quarter
and 1997 six months. The tax benefit as a percentage of the loss before taxes
was 36% for the 1998 quarter and the 1998 six months. The provision for income
taxes as a percentage of pre-tax income was 35% and 31%, respectively, for the
1997 quarter and 1997 six months.
The net loss for the 1998 quarter and 1998 six months was approximately
$(99,000) and $(95,000), respectively, or $(.04) per diluted common share, as
compared to net income of approximately $228,000, or $.10 per diluted common
share, in the 1997 quarter and $377,000, or $.17 per diluted common share for
the 1997 six months. The decrease is primarily due to sales volume that was
below projected levels in the areas of pool and spas and export markets.
Liquidity and Capital Resources
At June 30, 1998, the Company had working capital of approximately $5,379,000.
Cash and investments decreased by approximately $1,019,000 during the 1998 six
months. Inventory increased by approximately $372,000 during the 1998 six
months. Inventory was expanded in order to ensure availability of finished
goods, primarily in the pool and spa and architectural product lines in advance
of the summer construction season. Other assets increased by approximately
$140,000. The increase was primarily due to payment of deposits on booth space
at trade shows. Deposits on orders decreased by approximately $79,000. In the
past, the Company had required deposits on orders prior to order acceptance. As
the Company's customer
10
mix has evolved, the Company has modified its credit terms to industry standards
for qualified customers. Accounts payable decreased by approximately $308,000 as
extended credit term purchases from major vendors became due. Net equipment and
furniture decreased by approximately $68,000. Acquisitions of fixed assets and
computer equipment were exceeded by depreciation on existing assets. Management
believes capital expenditures for fixed plant will remain at these levels, with
the exception of tooling investments that Company plans to make in core product
lines to increase the unit profitability of these products.
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 B 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.
11
PART II
Item 4. Submission of Matters to a Vote of Security Holders
On May 8, 1998 the Company held an Annual Meeting of Stockholders (the
"1998 Annual Meeting"). At the 1998 Annual Meeting: (i) all five
director nominees were elected; (ii) the amendment to the Company's
1994 Stock Option Plan increasing from 250,000 to 450,000 the number of
shares of Class A Common Stock reserved for issuance was approved and
ratified; (iii) the amendment to Article Four of the Company's
Certificate of Incorporation to allow for certain limited transfers of
the Class B Common Stock without causing an automatic conversion was
adjourned to a later meeting; and (iv) the appointment of Ernst &
Young, LLP, as the independent auditors of the Company was approved and
ratified.
1. The following directors were elected for a one year term at
the 1997 Annual Meeting by the votes indicated:
For Withheld
--------- --------
Brett M. Kingstone 2,577,388 800
Edgar Protiva 2,577,888 300
Eric Protiva 2,577,888 300
Brian McCann 2,577,888 300
Anthony Castor 2,577,888 300
2. The amendment to the Company's 1994 Stock Option Plan
increasing the number of shares of Class A Common Stock
authorized to be issued under such Plan from 250,000 to
450,000 was approved and ratified by a vote of 2,495,493 for;
80,967 against and 1,728 abstaining.
3. The amendment to Article Four of the Company's Certificate of
incorporation to allow for certain limited transfers of the
Class B Common Stock without causing an automatic conversion
was adjourned until May 22, 1998. Due to insufficient
response, there were not enough votes to have a quorum. The
meeting was further adjourned due to lack of votes until June
1, 1998. At the 1998 Annual Meeting held on June 1, 1998, the
proposal for the amendment to Article Four of the Company's
Certificate of Incorporation to allow for certain limited
transfers of the Class B Common Stock without causing an
automatic conversion was approved and ratified by a vote of
3,181,979 for; 187,757 against and 3,863 abstaining.
4. The appointment of Ernst & Young, LLP as independent auditors
of the Company for the ensuing fiscal year was approved and
ratified by a vote of 2,577,188 for; 0 against and 1,000
abstaining.
12
Item 6. Exhibits and Reports on Form 8-K
(a) 27 Financial data schedule (for SEC use only)
(b) The Company did not file any current reports on Form 8-K
during the six months ending on June 30, 1998.
13
In accordance with the requirements 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 12, 1998
---------------------------------------------------------
Brett M. Kingstone, Chief Executive Officer
(Principal Executive Officer)
By: /s/ John P. Stanney Date: August 12, 1998
---------------------------------------------------------
John P. Stanney, President and Chief Financial Officer
(Principal Financial and Accounting Officer)
14