UNITED STATES

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, 2004

 

¨ 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 Incorporation or Organization)   (I.R.S. Employer Identification No.)

 

8210 PRESIDENTS DR., ORLANDO, FLORIDA 32809

(Address of Principal Executive Offices) (Zip Code)

 

(407) 857-9900

(Issuer’s Telephone Number, Including Area Code)

 

Securities registered under Section 12 (b) of the Exchange Act: None.

 

Securities registered under Section 12(g) of the Exchange Act:

 

CLASS A COMMON STOCK, $.001 PAR VALUE

(Title of Class)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 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 13, 2004:


Class A Common Stock, $.001 par value    2,058,814 [D1]shares
Class B Common Stock, $.001 par value    483,264 shares

 

Transitional Small Business Disclosure Format

Yes ¨    No x

 



Super Vision International, Inc.

Index to Form 10-QSB

 

          Page

PART I.

  

FINANCIAL INFORMATION

    
    

Item 1. Condensed Consolidated Financial Statements

    
    

Condensed Consolidated Balance Sheets as of June 30, 2004 (unaudited) and December 31, 2003

   1
    

Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2004 and 2003 (unaudited)

   2
    

Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2004 and 2003 (unaudited)

   3
    

Notes to Condensed Consolidated Financial Statements (unaudited)

   4
    

Item 2. Management’s Discussion and Analysis of Financial Condition and Results Of Operations

   9
    

Item 3. Controls and Procedures

   18

PART II

  

OTHER INFORMATION

    
    

Item 1. Legal Proceedings

   18
    

Item 4. Submission of Matters to a vote of Security Holders

   18
    

Item 6. Exhibits and Reports on Form 8-K

   19

SIGNATURES

        20

EXHIBITS

         

 


Super Vision International, Inc.

Condensed Consolidated Balance Sheets

 

    

June 30,

2004


    December 31,
2003


 
     Unaudited        
ASSETS                 

Current Assets:

                

Cash and cash equivalents

   $ 1,222,548     $ 1,507,360  

Investments

     891,566       873,099  

Trade accounts receivable, less allowance for doubtful accounts of $185,595 and $127,830

     1,588,964       1,342,997  

Inventories, less reserve of $199,793 and $130,885

     2,386,630       2,194,452  

Prepaid expense

     171,110       100,099  

Other assets

     67,276       8,719  
    


 


Total current assets

     6,328,094       6,026,726  

Property and Equipment

     7,408,965       7,378,636  

Accumulated depreciation and amortization

     (4,290,347 )     (4,068,719 )
    


 


Net property and equipment

     3,118,618       3,309,917  

Goodwill

     17,781       17,781  

Patents and trademarks, less amortization of $74,611 and $65,469

     136,636       130,773  

Other assets

     134,006       137,451  
    


 


     $ 9,735,135     $ 9,622,648  
    


 


LIABILITIES AND STOCKHOLDERS’ EQUITY                 

Current Liabilities:

                

Accounts payable

   $ 1,479,390     $ 1,214,206  

Accrued compensation and benefits

     70,315       79,510  

Deposits

     15,955       14,805  

Current portion of obligation under capital lease with related party

     160,611       142,780  
    


 


Total current liabilities

     1,726,271       1,451,301  

Obligation under capital lease with related party, less current portion

     2,620,392       2,709,571  
    


 


Stockholders’ Equity:

                

Preferred stock, $.001 par value, 5,000,000 shares authorized, none issued

     —         —    

Class A common stock, $.001 par value, 6,610,866 shares authorized, 2,058,814 and 2,057,314 issued and outstanding

     2,059       2,058  

Class B common stock, $.001 par value, 3,389,134 shares authorized, 483,264 issued and outstanding. Each share of Class B common stock is entitled to five votes per share.

     483       483  

Additional paid-in-capital

     10,564,358       10,556,883  

Accumulated deficit

     (5,167,066 )     (5,076,838 )

Accumulated other comprehensive loss

     (11,362 )     (20,810 )
    


 


Total stockholders’ equity

     5,388,472       5,461,776  
    


 


     $ 9,735,135     $ 9,622,648  
    


 


 

See accompanying notes to unaudited condensed consolidated financial statements.

 

1


Super Vision International, Inc.

Condensed Consolidated Statements of Operations – Unaudited

 

     Three Months
Ended June 30,


    Six Months
Ended June 30,


 
     2004

    2003

    2004

    2003

 

Revenues

   $ 2,770,577     $ 2,595,990     $ 5,878,735     $ 4,986,479  

Cost of sales

     1,724,240       1,388,140       3,571,153       3,003,899  
    


 


 


 


Gross margin

     1,046,337       1,207,850       2,307,582       1,982,580  

Operating expenses:

                                

Selling, general and administrative

     1,014,903       1,030,616       2,027,006       2,079,385  

Research and development

     109,558       95,590       232,066       216,297  
    


 


 


 


Total operating expenses

     1,124,461       1,126,206       2,259,072       2,295,682  
    


 


 


 


Operating Income (Loss)

     (78,124 )     81,644       48,510       (313,102 )

Non-Operating Income (Expense):

                                

Interest income

     6,309       7,740       12,442       15,014  

Interest expense

     (98,105 )     (102,396 )     (197,961 )     (205,736 )

Gain (Loss) on disposal of fixed assets

     —         10,346       (21,451 )     10,346  

Other income

     34,116       119,139       68,232       167,058  
    


 


 


 


Total non-operating expense

     (57,680 )     34,829       (138,738 )     (13,318 )
    


 


 


 


Net Income (Loss)

   $ (135,804 )   $ 116,473     $ (90,228 )   $ (326,420 )
    


 


 


 


Net Income (Loss) Per Common Share:

                                

Basic and diluted

   $ (0.05 )   $ 0.05     $ (0.04 )   $ (0.13 )
    


 


 


 


Weighted average shares outstanding:

                                

Basic

     2,541,649       2,540,453       2,541,117       2,540,349  
    


 


 


 


Diluted

     2,541,649       2,545,188       2,541,117       2,540,349  
    


 


 


 


 

See accompanying notes to unaudited condensed consolidated financial statements.

 

2


Super Vision International, Inc.

Condensed Consolidated Statements of Cash Flows – unaudited

 

     Six Months
Ended June 30,


 
     2004

    2003

 

Cash Flows from Operating Activities:

                

Net loss

   $ (90,228 )   $ (326,420 )

Adjustments to reconcile net loss to net cash used in operating activities:

                

Depreciation

     287,485       323,704  

Amortization of intangible assets and other assets

     24,058       18,901  

Bond premium amortization

     —         1,021  

Loss (Gain) on disposal of fixed assets

     21,451       (10,346 )

Changes in operating assets and liabilities:

                

(Increase) decrease in:

                

Trade accounts receivable, net

     (245,967 )     295,859  

Inventories

     (192,178 )     640,644  

Prepaid expense

     (71,012 )     36,746  

Other assets

     (70,028 )     3,391  

Increase (decrease) in:

                

Accounts payable

     265,184       (1,002,541 )

Accrued compensation and benefits

     (9,195 )     (5,857 )

Deposits

     1,150       (37,088 )
    


 


Total adjustments

     10,948       264,434  
    


 


Net cash used in operating activities

     (79,280 )     (61,986 )
    


 


Cash Flows from Investing Activities:

                

Purchase of property and equipment

     (117,637 )     (49,738 )

Purchase of investments

     (9,018 )     (12,836 )

Proceeds from sale of investments

     —         546,295  

Proceeds from disposal of fixed assets

     —         13,060  

Acquisition of patents and trademarks

     (15,005 )     (1,340 )
    


 


Net cash (used in) provided by investing activities

     (141,660 )     495,441  
    


 


Cash Flows from Financing Activities:

                

Payments on capital lease obligation

     (71,348 )     (51,873 )

Proceeds from exercise of employee stock options

     7,476       748  
    


 


Net cash used in financing activities

     (63,872 )     (51,125 )
    


 


Net (Decrease) Increase in Cash and Cash Equivalents

     (284,812 )     382,330  

Cash and Cash Equivalents, beginning of period

     1,507,360       363,234  
    


 


Cash and Cash Equivalents, end of period

   $ 1,222,548     $ 745,564  
    


 


 

See accompanying notes to unaudited condensed consolidated financial statements.

 

3


Super Vision International, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

 

The accompanying condensed consolidated financial statements are unaudited, but in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the Company’s financial position, results of operations, and cash flows as of and for the dates and periods presented. The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.

 

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2003 filed with the Securities and Exchange Commission. The results of operations for the six month period ended June 30, 2004 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2004 or for any future period.

 

1. Summary of Significant Accounting Policies

 

Our accounting policies are as set forth in the notes to consolidated financial statements referred to above.

 

Basis of Consolidation – The consolidated financial statements include the accounts of Super Vision International, Inc. and its wholly owned subsidiary Oasis Waterfalls, LLC (collectively, the “Company”). All significant inter-company balances and transactions have been eliminated. Effective May 31, 2003, Oasis Waterfalls LLC was merged with and into Super Vision International, Inc.

 

Investments – Marketable equity securities and debt securities are classified either as available-for-sale or held to maturity. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of stockholder’s equity. The amortized costs of debt securities in this category are adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in investment income. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in investment income. The costs of securities sold are based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in investment income. The Company accounts for investments in debt securities as held-to-maturity and records the investments at amortized cost when the Company has the positive intent and ability to hold those securities to maturity. The Company had no debt securities at June 30, 2004.

 

The amortized cost, unrealized gains, and fair values of the Company’s investments held at June 30, 2004 are summarized as follows:

 

     Amortized
Costs


   Gross
Unrealized
Gains


   Estimated
Fair Value


Available-for-sale securities:

                    

Fixed Income Funds

   $ 821,230    $ 9,271    $ 830,501

Money Market Funds

     60,888      177      61,065
    

  

  

     $ 882,118    $ 9,448    $ 891,566
    

  

  

 

Stock-based compensation – The Company accounts for its stock-based employee compensation plans under the accounting provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and has furnished the pro forma disclosures required under SFAS No. 123, Accounting for Stock-Based Compensation, and SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure.

 

The Company applies the disclosure-only provisions of SFAS No. 123, but applies Accounting Principles Board Opinion No. 25 and related interpretations in accounting for its stock-based employee compensation plans. Accordingly, no compensation expense has been recognized for stock options granted under the plans since they were granted at or above market price. If the Company had elected to recognize compensation expense for stock options based on the fair value at grant date, consistent with the method prescribed by SFAS No. 123, net income (loss) and income (loss) per share would have been adjusted to the pro forma amounts shown below:

 

4


Super Vision International, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

 

1. Summary of Significant Accounting Policies (continued):

 

Stock-based compensation – cont’d:

 

     Three Months Ended
June 30


    Six Months Ended
June 30,


 
     2004

    2003

    2004

    2003

 

Net income (loss), as reported

   $ (135,804 )   $ 116,473     $ (90,228 )   $ (326,420 )

Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards

     (14,239 )     (25,199 )     (138,099 )     (51,980 )
    


 


 


 


Pro forma net income (loss)

   $ (150,043 )   $ 91,274     $ (228,327 )   $ (378,400 )
    


 


 


 


Income (Loss) per share:

                                

Basic – as reported

   $ (0.05 )   $ 0.05     $ (0.04 )   $ (0.13 )
    


 


 


 


Basic – pro forma

   $ (0.06 )   $ 0.04     $ (0.09 )   $ (0.15 )
    


 


 


 


Diluted – as reported

   $ (0.05 )   $ 0.05     $ (0.04 )   $ (0.13 )
    


 


 


 


Diluted – pro forma

   $ (0.06 )   $ 0.04     $ (0.09 )   $ (0.15 )
    


 


 


 


 

These pro forma amounts were determined using the Black-Scholes Valuation model with the following key assumptions: (a) an average discount rate of 3% and 6.17% for 2004 and 2003; (b) a volatility factor of 42.8% and 43% for 2004 and 2003, respectively; and (c) an average expected option life of 7 years for 2004 and 2003.

 

New accounting pronouncements – The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2004. The Company has carefully considered the new pronouncements that altered generally accepted accounting principles, and other than disclosed in these notes to the consolidated financial statements, does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term.

 

2. Inventories:

 

Inventories consist of the following:

 

     June 30,
2004


    December 31,
2003


 

Raw materials

   $ 1,783,980     $ 1,594,494  

Work in process

     4,248       895  

Finished goods

     798,195       729,948  
    


 


       2,586,423       2,325,337  

Less: Reserve for obsolescence

     (199,793 )     (130,885 )
    


 


Net inventories

   $ 2,386,630     $ 2,194,452  
    


 


 

5


Super Vision International, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

 

3. Capital Lease Obligation with Related Party:

 

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 this capital lease included in property and equipment are as follows:

 

    

June 30,

2004


    December 31,
2003


 

Office/Warehouse building

   $ 3,081,000     $ 3,081,000  

Less accumulated amortization

     (1,437,800 )     (1,335,100 )
    


 


     $ 1,643,200     $ 1,745,900  
    


 


 

Future minimum annual lease payments for the remainder of 2004 and years subsequent thereto in the aggregate are as follows:

 

2004

   $ 320,303  

2005

     659,821  

2006

     673,176  

2007

     692,811  

2008

     706,836  

2009 and thereafter

     2,558,420  
    


Minimum lease payments

     5,611,367  

Less amount representing interest and executory costs

     (2,830,364 )
    


Present value of net minimum lease payments under capital lease

   $ 2,781,003  
    


 

Deposits included in other assets paid under this lease agreement totaled $59,167 at June 30, 2004.

 

4. Stock Option Plan:

 

The Company adopted a stock option plan in 1994 (the “1994 Plan”) that provided for the grant of incentive stock options and nonqualified stock options, and reserved 450,000 shares of the Company’s Class A Common Stock for future issuance under the plan. The option price must be at least 100% of market value at the date of the grant and the options have a maximum term of 10 years.

 

The following table summarizes activity of the 1994 Plan for the six months ended June 30, 2004:

 

     Number of
Shares Under
Option


    Option Price
Per Share


Balance, January 1, 2004

   272,817     $ 2.00 - $9.00

Options exercised

   (1,500 )   $ 5.00

Options cancelled

   (11,900 )   $ 2.50 - $6.00
    

     

Balance, June 30, 2004

   259,417     $ 2.00 - $9.00
    

     

 

Options granted typically vest ratably over a three-year period or vest based on achievement of performance criteria. As of June 30, 2004, options to purchase 235,852 shares of Class A common stock were vested and exercisable under this plan. The Board of Directors has determined that no new options will be granted under the 1994 Plan.

 

On September 18, 2003, the Company adopted a new stock option plan (the “2003 Plan”) that provides for the grant of incentive stock options and nonqualified stock options, and reserved 450,000 additional shares of the Company’s Class A Common Stock for future issuance under the plan. The option price of incentive stock options must be at least 100% of the market value at the date of the grant and incentive stock options have a maximum term of 10 years.

 

6


Super Vision International, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

 

4. Stock Option Plan – Cont’d:

 

The following table summarizes activity of the 2003 Plan for the six months ended June 30, 2004:

 

     Number of
Shares Under
Option


    Option Price
Per Share


Balance, January 1, 2004

   82,100     $ 3.45 - $4.05

Options granted

   17,400     $ 4.20 - $6.06

Options Cancelled

   (3,000 )   $ 3.87 - $4.05
    

 

Balance, June 30, 2004

   96,500     $ 3.45 - $6.06
    

 

 

Options granted typically vest ratably over a three-year period or vest based on achievement of performance criteria. As of June 30, 2004, options to purchase 38,500 shares of Class A common stock were vested and exercisable under this plan.

 

5. Earnings (Loss) per Share:

 

The following is a reconciliation of basic net earnings (loss) per share to diluted net earnings (loss) per share:

 

     For the Three Months Ended
June 30,


    For the Six Months Ended
June 30,


 
     2004

    2003

    2004

    2003

 

Numerator:

                                

Net income (loss) (numerator for basic and diluted loss per share)

   $ (135,804 )   $ 116,473     $ (90,228 )   $ (326,420 )

Denominator:

                                

Denominator for basic loss per share -weighted average shares

     2,541,649       2,540,453       2,541,117       2,540,349  

Effect of dilutive securities:

                                

“In-the-money” shares under warrants and stock option agreements

     —         17,353       —         —    

Less: shares assumed repurchased under treasury stock method

     —         (12,618 )     —         —    
    


 


 


 


Weighted average shares outstanding-diluted

   $ 2,541,649     $ 2,545,188     $ 2,541,117     $ 2,540,349  
    


 


 


 


Basic earnings (loss) per share

   $ (0.05 )   $ 0.05     $ (0.04 )   $ (0.13 )
    


 


 


 


Diluted earnings (loss) per share

   $ (0.05 )   $ 0.05     $ (0.04 )   $ (0.13 )
    


 


 


 


 

Employee stock options and certain outstanding warrants are not included in the computation of earnings (loss) per share for the three and six months ended June 30, 2004 and 2003 because the related shares are contingently issuable or to do so would have been anti-dilutive. At June 30, 2004 and 2003, the Company had 610,975 and 684,579 potentially dilutive common shares, respectively.

 

7


Super Vision International, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

 

6. Contingencies:

 

In the ordinary course of business the Company has various pending legal proceedings generally involving contractual matters, infringement actions, product liability claims and other matters. There has been no material change in the Company’s pending legal proceedings from the descriptions contained in Part I, Item 3 of the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2003 and Footnote 11 to the Company’s Consolidated Financial Statements contained therein, as supplemented by the descriptions contained in Part II, Item I of the Company’s Quarterly Report on Form 10-QSB for the quarter ended March 30, 2004 and Footnote 6 to the Company’s Condensed Consolidated Financial Statements contained therein.

 

8


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis provides information that management believes is useful in understanding our operating results, cash flows and financial condition. The discussion should be read in conjunction with, and is qualified in its entirety by reference to, the unaudited Condensed Consolidated Financial Statements and Notes thereto appearing elsewhere in this report and in the audited Consolidated Financial Statements and related Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2003.

 

Except for the historical information contained here, the discussions in this report contain 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”, “should”, “expect”, “plan”, “believe”, “estimate”, “anticipate”, “continue”, “predict”, “forecast”, “intend”, “potential”, 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 and LED lighting technology. Additional information concerning these or other factors which could cause actual results to differ materially from those contained or projected in, or even implied by, such forward-looking statements is contained in this report and also from time to time in the Company’s other Securities and Exchange Commission filings. Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2003. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking information will prove to be accurate. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The Company is under no duty to update any of the forward-looking statements after the date of this report on Form 10-QSB to conform its prior statements to actual results.

 

Overview

 

The Company designs, manufactures, markets and sells LED and fiber optic lighting products for applications in the signage, swimming pool, architectural, and retail industries. The Company derives its revenues primarily from sales of SIDE-GLOW® and END-GLOW® fiber optic lighting cables, and fiber optic lighting sources, accessories, endpoint signs and displays and LED lighting products and systems. The Company also designs, manufactures, markets and sells fiber optically lit waterfalls and water features. The Company markets and distributes products both in the domestic and international markets primarily through a network of independent sales representatives and distributors.

 

Sales of fiber optic lighting products and systems accounted for 58% and 74% of the Company’s revenue during the quarters ended June 30, 2004 and 2003, respectively, while sales of LED lighting products and systems accounted for 37% and 21% of the Company’s revenue for the quarters ended June 30, 2004 and 2003, respectively. Sales of waterfall products accounted for 5% of the Company’s revenue during the quarters ended June 30, 2004. Although we anticipate that our market share for LED applications will continue to increase, we believe that sales of our fiber optic applications will remain strong in certain markets such as international, pools and certain architectural and specialized applications such as display case lighting. The Company is in the process of broadening market applications for both product lines through the development of products designed to capture market segments that have not been serviced by either fiber optic or LED lighting. The Company believes that this may result in a strong source of additional revenue in the future.

 

Management focuses on key indicators in order to measure the Company’s performance. In the short-term (1-3 years), management is working towards achieving and maintaining positive trends in the following areas:

 

  Operating cash flow

 

9


  Gross margin in dollars and percentage of gross sales

 

  Operating expenses

 

  Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

 

  Liquidity

 

  Key balance sheet ratios (Accounts Receivable (AR)/Accounts Payable (AP)/Inventory turnover)

 

  Profitability

 

  Shareholder Value

 

  Developing new LED and fiber optic lighting products

 

In the long term (over 3 years), management is striving to generate consistent and predictable net sales growth while incrementally enhancing net cash flow from operations.

 

Three months ended June 30, 2004 vs. 2003

 

Results of Operations

 

     (Unaudited) Quarter Ended June 30,

 
     2004

    2003

    Change

    % Change

 

Revenues

   $ 2,770,577     $ 2,595,990     $ 174,587     7 %

Cost of Sales

     1,724,240       1,388,140       336,100     24 %
    


 


 


 

Gross Margin

   $ 1,046,337     $ 1,207,850     $ (161,513 )   -13 %
    


 


 


 

Gross Margin %

     38 %     47 %              
    


 


             

 

Revenues for the three months ended June 30, 2004 were approximately $2,771,000 as compared to approximately $2,596,000 for the three months ended June 30, 2003, an increase of approximately $175,000 or 7%. Revenue growth in the period was seen primarily in the pool & spa market, $376,000, and the international market, $105,000. The increase in revenue in the pool and spa market was primarily due to original equipment manufacturer (OEM) sales to a major spa manufacturer while the increase in revenue in the international market was mainly due to sales in Europe, the Middle East and Asia where the Company had little or no prior market presence. These increases were offset by decreases in the national accounts market, architectural market, and sign market of approximately $111,000, $160,000 and $30,000, respectively. The decreases in revenue in the architectural and sign markets were primarily due to price discounts offered during the period. The Company anticipates that this trend will continue due to competitive pressure mainly in the fiber optic business in an effort to maintain market share in this product line. The decrease in revenue in the national accounts market was a result of an initiative to absorb most of these accounts into architectural division to further streamline operations. Although sales of fiber optic lighting products and systems continues to be the Company’s primary source of revenue, the revenue share from sales of LED lighting products and systems continue to increase in the current period.

 

Gross margin for the quarter ended June 30, 2004 was approximately $1,046,000 or 38% as compared to approximately $1,208,000 or 47% for the quarter ended June 30, 2003. Gross margin is dependent, in part, on product mix, as well as the mix of customers, which fluctuates from time to time. The decrease in gross margin percent primarily resulted from the drop in sales of fiber optic products which are normally sold at higher gross margins and the increase in lower gross margin generating LED products. Price discounts offered on both product lines during the period as a result of market competition contributed further to the reduced gross margins.

 

Management expects to see improvement in its gross margin in the remainder of 2004 and beyond through improving new product cost management, improving product quality, continuing

 

10


manufacturing process improvements and introducing new LED product applications that the Company expects to introduce to the market at higher gross margins as part of its plans to maximize market share. Management recognizes the continued market pressure to offer fiber optic products in both international and domestic markets at reduced prices. The Company anticipates that increased volume will help compensate for the lost gross margin dollars as a result of increased revenue and reduced product costing across the board due to increased demand for these products. Specific initiatives which management is implementing include, but are not limited to, the following:

 

1. Product Quality:

 

a. Continuing improvement of product quality through a more specific checklist-driven ongoing inspection of products from our offshore manufacturing partners.

 

b. Continuing product quality review by the Company and focused follow through and closure of quality issues, as well as documented, preventive procedures to mitigate possible recurrences.

 

c. Clearly defined accountability for manufacturing personnel and supervisors regarding quality control within the Company.

 

2. Product Pricing and Sourcing:

 

a. Continuing drive for more favorable product costing and sourcing through value-added re-engineering and manufacturing efficiencies.

 

b. Proper product specifications during the early stages of product development leading to objective product costing and leveraged pricing negotiations prior to production.

 

3. Inventory Management

 

a. Focusing on the Company’s need to maintain proper inventory levels to ensure competitive lead times versus the risk of inventory obsolescence due to changing technology and customer requirements.

 

b. Focusing on reducing inventory levels and implementing improved inventory planning to avoid excessive shipping charges.

 

4. Lean Manufacturing and Cross Functional Training

 

a. Review and assessment of existing manufacturing processes by an independent outside consultant aimed at identifying key weaknesses or breakdowns in the processes as well as potential duplications or absence of controls.

 

b. Documentation of processes in manufacturing and implementation of periodic evaluation of existing procedures to ensure adherence and consistency.

 

c. Cross functional training among production personnel to ensure fluid flow of work during peak production times.

 

Operating Income (Loss)

 

     (Unaudited) Quarter Ended June 30,

 
     2004

    2003

   Change

    % Change

 

Gross Margin

   $ 1,046,337     $ 1,207,850    $ (161,513 )   -13 %
    


 

  


 

Less operating expenses:

                             

Selling, general & administrative

     1,014,903       1,030,616      (15,713 )   -2 %

Research & development

     109,558       95,590      13,968     15 %
    


 

  


 

Total operating expenses

     1,124,461       1,126,206      (1,745 )   -0.2 %
    


 

  


 

Operating income (loss)

     (78,124 )     81,644      (159,768 )   -196 %
    


 

  


 

 

Selling, general and administrative expenses were approximately $1,015,000 during the three months ended June 30, 2004 as compared to approximately $1,031,000 for the same period in 2003, a

 

11


decrease of approximately $16,000 or 2%. The decrease was attributed to decreases in insurance expenses of $23,000, labor & fringe of $37,000, advertising and promotional expenses of $12,000 and royalty expense of $12,000 offset by the increases in repairs and maintenance of $33,000, legal expense of $30,000 and travel, commission and other selling expenses of $5,000. Management has made a concerted effort to decrease certain discretionary charges such as advertising and promotional expenses and insurance expenses and will continue to manage these charges in the future. Labor & fringe costs decreased due to changes in the organizational structure resulting in decreased head count. Royalty expense decreased as a result of lower revenue generated from sales of certain fiber optic lighting products and systems in the pool and spa market. The increase in repairs and maintenance expense was related to the timing of periodic maintenance on equipment used during production processes, and other building equipment such as the air conditioning units, elevator and other office equipment such as computers and printers. The increase in legal expense was primarily related to legal services received in the lawsuit the Company filed (case number 6:02-CV-270-ORL-19JGG) in the United States District Court for the Middle District of Florida against Color Kinetics Incorporated. The Company currently expects that selling, general and administrative expenses will continue to decrease as management continues to focus on long-term initiatives to lower expenses and implement process improvements in both selling and administrative functions.

 

Research and development costs were approximately $110,000 during the three months ended June 30, 2004 as compared to approximately $96,000 during the same period in 2003. Management expects to increase research and development expenses in the future due to more aggressive product development initiatives to compete with the ever changing market for LED and fiber optic lighting technology. Management believes that the Company’s long-term success will depend, in large measure, on its new product design and development efforts and thus expects to see further increases in R&D expenses in the future as a result of anticipated new product development and other related R&D activities.

 

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a non-GAAP measure which management uses as part of its performance appraisal in reviewing the Company’s current ongoing operations and business trends related to its financial condition and results of operations. It is also used to measure the Company’s cash-based performance.

 

The $272,948 reduction in EBITDA for the three months ending June 30, 2004, down from $389,023 for the same period in 2003, was primarily due to the reduction in gross margin as a result of price discounts offered during the period.

 

The following table reconciles GAAP to non-GAAP financial measures:

 

     (Unaudited) Quarter Ended June 30,

 
     2004

    2003

    Change

    %

 

Net Income (Loss)

   $ (135,804 )   $ 116,473     $ (252,277 )   -217 %

Plus:

                              

Interest

     98,105       102,396       (4,291 )   -4 %

Depreciation

     145,469       160,942       (15,473 )   -10 %

Amortization

     8,305       9,212       (907 )   -10 %
    


 


 


 

EBITDA

     116,075       389,023       (272,948 )   -70 %
    


 


 


 

% of Revenues

     4 %     15 %              
    


 


             

 

12


Interest expense of approximately $98,000 for the quarter ended June 30, 2004, as compared to approximately $102,000 for the same period in 2003, relates to the capital lease for the Company’s facility in Orlando, Florida.

 

Other income was approximately $34,000 for the three months ended June 30, 2004 compared to approximately $119,000 for the same period in 2003. The decline was mainly due to one-time recovery of inventory related to the absence of non-recurring activity related to inventory claimed from a court ordered release of all fiber optic lighting products held in warehouses of certain defendants named in a lawsuit filed by the Company on November 18, 1999 (case number CI-99-9392) valued at approximately $48,000 and write-off of old credit balances in accounts receivable accounts of approximately $37,000. Both of these transactions transpired in the second quarter of 2003. The source of other income for the period was primarily rental income from subleasing excess warehouse capacity.

 

The Company has provided a full valuation allowance against income tax benefits resulting from losses incurred and accumulated on operations and as a result there was no provision for income tax during the three months ended June 30, 2004 and 2003, respectively.

 

Net loss for the three months ended June 30, 2004 was approximately $136,000 or $0.05 per basic and diluted common share, as compared to a net income of approximately $116,000, or $0.05 per basic and diluted common share, for the quarter ended June 30, 2003. The loss for the period was primarily due to the decline in the Company’s gross margin.

 

Six months ended June 30, 2004 vs. 2003

 

Results of Operations

 

     (Unaudited) Six Months Ended June 30,

 
     2004

    2003

    Change

   % Change

 

Revenues

   $ 5,878,735     $ 4,986,479     $ 892,256    18 %

Cost of Sales

     3,571,153       3,003,899       567,254    19 %
    


 


 

  

Gross Margin

   $ 2,307,582     $ 1,982,580     $ 325,002    16 %
    


 


 

  

Gross Margin %

     39 %     40 %          -1 %
    


 


        

 

Total revenues for the six months ended June 30, 2004 were approximately $5,879,000 as compared to approximately $4,986,000 for the six months ended June 30, 2003 an increase of approximately $893,000 or 18%. Revenue growth in the period was seen primarily in the pool & spa market, $914,000, and the international market, $339,000. Increase in revenue in the pool and spa market was primarily due to original equipment manufacturer (OEM) sales to a major spa manufacturer while the increase in revenue in the international market was mainly due to sales in Europe, the Middle East and Asia. The increases in revenue for the period were offset by decreases in national accounts of $185,000, architectural lighting of $154,000 and sign market of $22,000. The decreases in revenue in the architectural and sign markets were primarily due to price discounts offered during the period. The Company anticipates that this trend will continue due to competitive pressure mainly in the fiber optic business in an effort to maintain market share in this product line. The decrease in revenue in the national accounts market was a result of an initiative to absorb most of these accounts into architectural division to further streamline operations. Although sales of fiber optic lighting products and

 

13


systems continues to be the Company’s primary source of revenue, the revenue share from sales of LED lighting products and systems continued to increase in the current period.

 

Gross margin for the six months ended June 30, 2004 was approximately $2,308,000 or 39% as compared to approximately $1,983,000 or 40% for the six months ended June 30, 2003. Gross margin is dependent, in part, on product mix, as well as the mix of customers, which fluctuates from time to time. The decrease in gross margin as a percent of sales primarily resulted from the drop in sales of fiber optic products which are normally sold at a higher gross margin and the increase in sales of LED products which are normally sold at a lower gross margin. Gross margin was further affected by sales of both product lines at discounted prices during the period.

 

Operating Income (Loss)

 

     (Unaudited) Six Months Ended June 30,

 
     2004

   2003

    Change

    % Change

 

Gross Margin

   $ 2,307,582    $ 1,982,580     $ 325,002     16 %
    

  


 


 

Less operating expenses:

                             

Selling, general & administrative

     2,027,006      2,079,385       (52,379 )   -3 %

Research & development

     232,066      216,297       15,769     7 %
    

  


 


 

Total operating expenses

     2,259,072      2,295,682       (36,610 )   -2 %
    

  


 


 

Operating income (loss)

     48,510      (313,102 )     361,612     115 %
    

  


 


 

 

Selling, general and administrative expenses were approximately $2,027,000 for the six months ended June 30, 2004 as compared to approximately $2,079,000 for the same period in 2003, a decrease of approximately $52,000 or 3%. The main contributors to the decrease was the decline in labor & fringe costs of $76,000, advertising and promotional expenses of $55,000, travel expenses of $32,000, insurance costs of $25,000, office expense of $18,000 and royalty expense of $18,000. Apart from the decrease in royalty expense, all other decreases were a result of management’s continued focus to control discretionary expenses. Royalty expense decreased as a result of lower revenue generated from sales of certain fiber optic lighting products and systems in the pool and spa market. These decreases were offset by increases in commission expense of $68,000, bad debt expense of $50,000, repairs and maintenance of $33,000 and legal expense of $19,000. Commission expense increased as a result of the increase revenues from the sale of LED lighting products and systems during the period. Bad debt expense increased as a result of potentially uncollectable accounts abroad relating to increased sales activity in that region. The increase in repairs and maintenance expense was related to the timing of periodic maintenance on equipment used during production processes, and other building equipment such as the air conditioning units, the elevator and other office equipment such as computers and printers. The increase in legal expense was primarily related to legal services received in the lawsuit the Company filed (case number 6:02-CV-270-ORL-19JGG) in the United States District Court for the Middle District of Florida against Color Kinetics Incorporated. The Company currently expects that selling, general and administrative expenses will continue to decrease as management focuses on long-term measures to lower expenses and implement operational improvements in both selling and administrative functions.

 

Research and development costs were approximately $232,000 for the six months ended June 30, 2004 as compared to approximately $216,000 for the same period in 2003. The increase in research and development expense was related to increases in consulting fees, product certification expenses, and office expenses of approximately $14,000, $9,000 and $5,000, respectively. The increases were offset by decreases in labor & fringe costs of $8,000 and direct material costs of $4,000. Management

 

14


believes that the Company’s success will depend, in large measure, on its new product design and development efforts and thus expects to see further increases in R&D expenses in the near future as a result of anticipated new product development and other related R&D activities.

 

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a non-GAAP measure which management uses as part of its performance appraisal in reviewing the Company’s current ongoing operations and business trends related to its financial condition and results of operations. It is also used to measure the Company’s cash-based performance. The primary contributors to the $197,355 increase in EBITDA for the six months ended June 30, 2004 compared to the same period in the prior year were increased revenue and gross margin dollars as a result of marketing efforts in international markets, specifically Europe, the Middle East and Asia, combined with OEM sales to a major spa manufacturer in the pool and spa market.

 

The following table reconciles GAAP to non-GAAP financial measures:

 

     (Unaudited) Six Months Ended June 30,

 
     2004

    2003

    Change

    %

 

Net Loss

   $ (90,228 )   $ (326,420 )   $ 236,192     -72 %

Plus:

                              

Interest

     197,961       205,736       (7,775 )   -4 %

Depreciation

     287,485       323,704       (36,219 )   -11 %

Amortization

     24,058       18,901       5,157     27 %
    


 


 


 

EBITDA

     419,276       221,921       197,355     89 %
    


 


 


 

% of Revenues

     7 %     4 %              
    


 


             

 

Interest expense of approximately $198,000 for the six months ended June 30, 2004, as compared to approximately $206,000 for the same period last year, relates to the capital lease for the Company’s facility in Orlando, Florida.

 

Other income was approximately $68,000 for the six months ended June 30, 2004 compared to approximately $167,000 for the same period in 2003. The source of other income for the six months ended June 30, 2004 was primarily rental income from subleasing excess warehouse capacity. Income from subleasing activities declined $27,000 during the period. In addition, the decline was due to the absence of one-time recovery of inventory related to the absence of non-recurring activity related to inventory claimed from a court ordered release of all fiber optic lighting products held in warehouses of certain defendants named in a lawsuit filed by the Company on November 18, 1999 (case number CI-99-9392) valued at approximately $48,000 and write-off of old credit balances in accounts receivable accounts of approximately $24,000. Both of these transactions transpired during 2003.

 

The Company has provided a full valuation allowance against income tax benefits resulting from losses incurred on operations and as a result there was no provision for income tax for the six months ended June 30, 2004 and 2003.

 

The net loss for the six months ended June 30, 2004 was approximately $90,000, or $0.04 per basic and diluted common share, as compared to a net loss of approximately $326,000, or $0.13 per basic and diluted common share, for the six months ended June 30, 2003.

 

Liquidity and Capital Resources

 

At June 30, 2004 the Company had working capital of approximately of $4,602,000, a decrease of approximately 1% compared to working capital of approximately $4,575,000 at December 31, 2003.

 

15


During the six months ended June 30, 2004, the Company financed its operations primarily from working capital and cash on hand.

 

Cash Flows from Operating Activities

 

    

(Unaudited)
June 30,

2004


  

December 31,

2003


   Change

    % Change

 

Selected Balance Sheet Items

                      

Cash and investments

   2,114,114    2,380,459    (266,345 )   -11 %

Trade accounts receivable, net

   1,588,964    1,342,997    245,967     18 %

Inventories, net

   2,386,630    2,194,452    192,178     9 %

Accounts payable

   1,479,390    1,214,206    265,184     22 %

 

Net cash used in operations amounted to approximately $79,000 for the six months ended June 30, 2004 as compared to approximately $62,000 for the six months ended June 30, 2003. The most significant use of cash was generated by increases in inventories and accounts receivable of approximately $192,000 and $246,000, respectively. The increase in inventory was primarily due to new LED lighting system products developed by the Company for the OEM spa market. Control measures have been implemented to maintain inventory at levels designed to balance competitive lead-time versus the risk of inventory obsolescence due to changing technology and customer requirements. Management implemented cycle-counting and enhanced incoming quality inspection on products received from domestic sources as well as overseas. The increase in accounts receivable was primarily due to increased sales volume in the latter part of the quarter ended June 30, 2004 and the timing of payments from customers. The use of cash was offset by increases in accounts payable of approximately $265,000. The increase in accounts payable was due to timing of payments to suppliers.

 

Cash Flows from Investing Activities

 

Net cash used in investing activities for the six months ended June 30, 2004 amounted to approximately $142,000 and was primarily related to the acquisition of approximately $118,000 in tooling, manufacturing equipment, and computers and the investment of approximately $15,000 in patents and trademarks. The Company also reinvested interest and dividend income of approximately $9,000 in a fixed income mutual fund during the six months ended June 30, 2004.

 

Cash Flows from Financing Activities

 

Net cash used in financing activities for the six months ended June 30, 2004 was approximately $64,000 relating to payments on the capital lease obligation on the Company’s facility of $71,000, offset by proceeds from exercise of employee stock options of $7,000.

 

Contractual Obligations

 

Related Party Capital Lease Obligations

 

On September 27, 1996, we entered into a lease agreement with Max King Realty, an entity controlled by Mr. Kingstone, our President, Chief Executive Officer and Chairman of the Board, for approximately 70,000 square feet of warehouse and office space. We began occupying this facility in August 1997. The lease term expires in June 2012. Rental payments for each of the six months ended June 30, 2004 and 2003 amounted to approximately $321,000 and $308,000, respectively. The lease agreement was approved by all of the disinterested directors of Super Vision, with Mr. Kingstone abstaining from the vote. At the time we entered into the lease agreement, based on then current economic conditions, the real estate market, and our prospects, we believed that the transaction was on terms, when taken

 

16


as a whole, no less favorable to Super Vision than could generally be obtained from unaffiliated third parties.

 

Future minimum annual lease payments for the remainder of 2004 and years subsequent thereto in the aggregate are as follows:

 

2004

   $ 320,303  

2005

     659,821  

2006

     673,176  

2007

     692,811  

2008

     706,836  

2009 and thereafter

     2,558,420  
    


Minimum lease payments

     5,611,367  

Less amount representing interest and executory costs

     (2,830,364 )
    


Present value of net minimum lease payments under capital lease

   $ 2,781,003  
    


 

Related Party Funding for Collection Activities

 

On November 18, 1999, the Company filed a lawsuit (case number CI-99-9392) (the “Lawsuit”) in the Circuit Court of the 9th Judicial Circuit in and for Orange County Florida against various defendants (the “Wu Defendants”). The Company is also pursuing litigation against certain parties related to the Wu Defendants (the “Related Litigation”). In June 2003, the Court issued an order of final judgment against all parties in the Lawsuit. Pursuant to the final judgment, the Company was awarded $38,405,978.17 and further awarded an additional amount for legal fees and costs of $834,297.40. As of the date of entry of the final judgment, these amounts will accrue interest at a rate of six percent per year. The Company believes that the monetary judgment awarded in the Lawsuit, and any amounts that may be awarded in the Related Litigation, will be very difficult and costly to collect, if collectable at all. The Company may not be successful in collecting any amounts awarded in the Lawsuit or that may be awarded in the Related Litigation. The Board of Directors of the Company has elected not to use Company funds to pursue collection activities in the Lawsuit or Related Litigation (the “Collection Activities”). The Company has reached an agreement with Mr. Kingstone regarding funding for Collection Activities. Mr. Kingstone has the option of providing personal funds (“Kingstone Funds”), or arranging for funds from third parties (“Third Party Funds”), to pursue Collection Activities. As of June 30, 2004, Mr. Kingstone has provided $350,000 in a form of Letter of Credit, and has arranged for $350,000 of Third Party Funds, to further the Collection Activities. Both Kingstone Funds and Third Party Funds were subsequently returned after being held for bonding in connection with collection activities. Mr. Kingstone has also notified the Company that he has available, on a standby basis, up to an additional $3,000,000 of bonding capacity to pursue further Collection Activities. In consideration for providing Kingstone Funds and/or Third Party Funds for Collection Activities, the Company has agreed to pay Mr. Kingstone 25% of amounts actually received by the Company from all Collection Activities less all costs and expenses incurred from time to time by the Company in connection with the Lawsuit, the Related Litigation and the Collection Activities, which have not been recovered by the Company

 

Purchase Obligations

 

We are not a party to any significant long-term service or supply contracts with respect to our processes. We refrain from entering into any long-term purchase commitments in the ordinary course of business.

 

17


Critical Accounting Policies

 

We use certain accounting policies and procedures to manage changes that occur in our business environment that may affect accounting estimates made in preparation of our financial statements. These estimates relate primarily to our allowance for doubtful accounts receivable and provision for inventory obsolescence. Our strategy for managing doubtful accounts includes stringent, centralized credit policies and collection procedures for all customer accounts. We use a credit risk rating system in order to measure the quality of individual credit transactions. We strive to identify potential problem receivables early, take appropriate collection actions, and maintain adequate reserve levels. Our strategy for providing for inventory obsolescence includes the evaluation of existing inventory usage and realizable value. Typically, no provision is recorded for inventory that is currently used and sold within six months of purchase We believe that our allowance for doubtful accounts and provision for inventory obsolescence was adequate at June 30, 2004 and December 31, 2003.

 

Item 3. Controls and Procedures

 

We carried out an evaluation under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective for recording, processing, summarizing and reporting the information we are required to disclose in the reports we file under the Securities Exchange Act of 1934, within the time periods specified in the SEC’s rules, regulations and forms. Our management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature can provide only reasonable assurance regarding management’s control objectives.

 

There have been no significant changes in our internal control over financial reporting during our last quarter, identified in connection with the evaluation referred to above, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II

 

Item 1. Legal Proceedings

 

In the ordinary course of business the Company has various pending legal proceedings generally involving contractual matters, infringement actions, product liability claims and other matters. There has been no material change in the Company’s pending legal proceedings from the descriptions contained in Part I, Item 3 of the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2003 and Footnote 11 to the Company’s Consolidated Financial Statements contained therein, as supplemented by the descriptions contained in Part II, Item 1 of the Company’s Quarterly Report on Form 10-QSB for the quarter ended March 30, 2004 and Footnote 6 to the Company’s Condensed Consolidated Financial Statements contained therein.

 

Item 4. Submission of Matters to a Vote of Security Holders.

 

On May 13, 2004, the Company held its Annual Meeting of Stockholders. At the meeting, the stockholders elected as directors Brett M. Kingstone with 3,923,393 votes cast for and zero votes

 

18


withheld), Edgar Protiva with 3,923,393 votes cast for and zero votes withheld), Fritz Zeck with 3,923,393 votes cast for and zero votes withheld), Brian McCann with 3,923,393 votes cast for and zero votes withheld), Anthony Nicolosi with 3,923,393 votes cast for and zero votes withheld), and David Feldman with 3,923,393 votes cast for and zero votes withheld,

 

The stockholders also (i) ratified the appointment of Gallogly, Fernandez & Riley LLP as the independent auditors for the Company for the year ending December 31, 2004 with 3,925,243 votes cast for, zero against, zero abstaining

 

Item 6. Exhibits and Reports on Form 8-K

 

(a)    Exhibits.     
    

Exhibit Number


  

Document Description


           31.1    Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
           31.2    Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
           32.1    Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b)    Reports on Form 8-K    The Company did not file any reports on Form 8-K during the three months ended June 30, 2004.

 

19


SIGNATURES

 

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 16, 2004
   

Brett M. Kingstone, Chief Executive Officer

(Principal Executive Officer)

           
By:   /s/    DANILO REGALADO               Date: August 16, 2004
   

Danilo Regalado, Chief Financial Officer

(Principal Financial and Accounting Officer)

           

 

20