SUPVA Super Vision International (MM)

Super Vision International, Inc. (NASDAQ:SUPVA), a world leader in the design and manufacture of LED lighting systems and fiber optic lighting products for applications in the commercial, architectural, signage, swimming pool and retail lighting markets today announced financial results for the third quarter ended September 30, 2005. Revenues for the quarter were up $102,000 or 3.5% to approximately $3,093,000 compared to $2,991,000 in the third quarter of 2004. Commercial lighting sales were up 32% or $241,000 in the quarter and its respective higher gross margin drove the quarter's gross margin improvement. A strengthened sales agency base, balanced double digit growth in sales of both LED and fiber-optic products and sales of the new SaVi brand of architectural LED products introduced in the 1st quarter all contributed to the increase. International sales increased 4% or $32,000 for the quarter driven by new SaVi orders in Latin America and LED sign lighting product demand in Europe and other parts of the world. Sales in the Pool & Spa division were down $173,000 or 12% compared to the third quarter of 2004, mainly due to the smoothing out of orders from existing OEM accounts and the timing of shipment of new OEM products. However, fiber optic sales for pools were up 12% in the quarter as the company continues to gain competitive market share in this segment resulting from service and quality improvement initiatives. Total revenues for the nine months ended September 30, 2005 were approximately $9,180,000 as compared to approximately $8,870,000 for the nine months ended September 30, 2004, an increase of approximately $310,000 or 3.5%. "We are very pleased to see our efforts over the last year starting to pay off in the growth of our Commercial lighting business. Quotation activity remains strong across all three business segments and our new SaVi product line is being very well received. With the planned introduction of three major new products scheduled for the 4th quarter, the grand opening for our new LED and Fiber Optic Training Center, and a strong backlog of new OEM projects in the pipeline, we are making significant progress towards increasing our growth rate and taking Super Vision to the next level," stated Mike Bauer, Vice President of Sales and Marketing. Mr. Bauer has been promoted to President/CEO effective January 1, 2006. Gross margin for the third quarter of 2005 was 39%, compared to 37% in the same quarter a year ago. The increase in gross margin in the third quarter was attributable to continued material cost reduction efforts and higher commercial lighting sales as a percentage of revenue. Dan Regalado, the Company's Chief Financial & Operating Officer stated, "We are pleased to see the company maintaining its margin improvement quarter to quarter. Our focus on gross margin is driving us to profitability and will be a major focus for the balance of the year and 2006." Gross margin for the nine months ended September 30, 2005 was approximately $3,847,000 or 42% as compared to approximately $3,423,000 or 39% for the nine months ended September 30, 2004. Mr. Regalado has been promoted to Executive Vice President/CFO effective January 1, 2006. The operating loss for the quarter ended September 30, 2005 was approximately $2,000 compared to an operating loss of $8,000 in the same quarter of 2004. Excluding the one time severance charge, operating income was $68,000 for the quarter. For the nine months ended September 30, 2005, operating income was approximately $22,000 compared to $19,000 in the same period in 2004. Excluding the one time severance charge, operating income for the quarter was $92,000. Net loss for the quarter ended September 30, 2005 was $47,636 or $0.02 per basic and diluted common share, compared to a net loss of $62,845 or $0.02 per basic and diluted common share in the third quarter of 2004. Excluding the one time severance charge, net profit for the quarter was $22,364. The net loss for the nine months ended September 30, 2005 was reduced to approximately $123,280 or $0.05 per basic and diluted common share, compared to a net loss of approximately $153,072, or $0.06 per basic and diluted common share, for the nine months ended September 30, 2004. Excluding the one time severance charge, the net loss year-to-date is $53,280. EBITDA, which is Earnings Before Interest, Taxes, Depreciation and Amortization, is a non-GAAP measure which management uses as part of its performance appraisal in reviewing the Company's ongoing operational business trends related to its financial condition and results of operations. For the quarter ended September 30, 2005, EBITDA was approximately $182,000 compared to approximately $198,000 in the quarter ending September 30, 2004. Year-to-date EBITDA was approximately $570,000 compared to approximately $617,000 in the same period of 2004. Excluding the one time severance charge, EBITDA for the quarter ended September 30, 2005 was approximately $252,000 and approximately $640,000 for the nine months ending September 30, 2005. Super Vision's fiber optic lighting and LED lighting systems are used in the architectural, lighting, landscape, sign and swimming pool industries. Super Vision's SideGlow(R) cable is manufactured as a replacement for neon and Super Vision's EndGlow(R) cable is manufactured for conventional down-lighting and underwater/hazardous area lighting. For more information, please visit the Super Vision web site at www.svision.com. This press release contains 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(TM) filings under the Securities Exchange Act of 1934 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 Consolidated Statements of Operations - unaudited Three Months Nine Months Ended September 30, Ended September 30, 2005 2004 2005 2004 ---------- ---------- ----------- ---------- Revenues $3,093,166 $2,991,329 $ 9,179,673 $8,870,065 Cost of sales 1,882,983 1,875,883 5,332,194 5,447,036 ---------- ---------- ----------- ---------- Gross margin 1,210,183 1,115,446 3,847,479 3,423,029 Operating expenses: Selling, general and administrative 1,064,978 1,014,171 3,425,710 3,041,177 Research and development 147,184 108,869 406,064 340,935 (Gain) Loss on disposal of fixed assets -- -- (6,000) 21,451 ---------- ---------- ----------- ---------- Total operating expenses 1,212,162 1,123,040 3,825,774 3,403,563 ---------- ---------- ----------- ---------- Operating Income (Loss) (1,979) (7,594) 21,705 19,466 Non-Operating Income (Expense): Interest income 15,529 7,612 38,636 20,054 Interest expense (91,294) (97,147) (278,919) (295,108) Other income 30,108 34,284 95,299 102,516 ---------- ---------- ----------- ---------- Total non-operating expense (45,657) (55,251) (144,984) (172,538) ---------- ---------- ----------- ---------- Net Income (Loss) $ (47,636)$ (62,845) $ (123,280)$ (153,072) ========== ========== =========== ========== Net Income (Loss) Per Common Share: Basic and diluted $ (0.02)$ (0.02) $ (0.05)$ (0.06) ========== ========== =========== ========== Weighted average shares outstanding: Basic 2,542,132 2,542,078 2,542,096 2,541,441 ========== ========== =========== ========== Diluted 2,592,428 2,542,078 2,,542,096 2,541,441 ========== ========== =========== ========== Selected Consolidated Balance Sheet Data Unaudited Audited As of September 30, December 31, 2005 2004 Cash and Investments $1,855,317 $1,926,042 Current Assets $6,408,294 $6,313,826 Total Assets $9,359,391 $9,463,793 Current Liabilities $1,972,108 $1,794,366 Total Liabilities $4,324,376 $4,313,034 Total Shareholders Equity $5,035,015 $5,150,759 Reconciliation of Non-GAAP Financial Measure The following table reconciles GAAP to non-GAAP financial measures: (Unaudited) Three Months Ended September 30, ---------------------------------------------------- 2005 2004 Change % ---------------------------------------------------- Net Income (Loss) $(47,636) $(62,845) $15,209 24% Plus: Interest 91,294 97,147 (5,853) -6% Depreciation 130,479 142,806 (12,327) -9% Amortization 7,533 20,644 (13,111) -64% Taxes -- -- -- -- ---------------------------------------------------- EBITDA $181,670 $197,752 $16,082 -8% ==================================================== % of Revenues 6% 7% ============================ (Unaudited) Six Months Ended June 30, ---------------------------------------------------- 2004 2003 Change % ---------------------------------------------------- Net Income (Loss) $(123,280) $(153,072) $29,792 19% Plus: Interest 278,919 295,108 (16,189) -5% Depreciation 385,549 430,291 (44,742) -10% Amortization 28,935 44,702 ( 15,767) -35% Taxes -- -- -- -- ---------------------------------------------------- EBITDA $570,123 $617,029 $(46,906) -8% ==================================================== % of Revenues 6% 7% ============================ *T