~~Table~~UNITED ofSTATES SECURITIES ~~Contents~~AND EXCHANGE COMMISSION

~~UNITED~~Washington, ~~STATES SECURITIES~~D.C. ~~AND EXCHANGE COMMISSION~~20549

~~Washington, D.C. 20549~~__________

FORM 10-Q

(Mark One)

~~[X]~~þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~December~~March 31, ~~2004~~2005

~~[ ]~~o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________________ to _____________________ to

Commission File Number: 0-27202

ADVANCED LIGHTING TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Ohio		34-1803229
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
32000 Aurora Road, Solon, Ohio		44139
(Address of principal executive offices)		(Zip Code)

440 / 519-0500


32000 Aurora Road, Solon, Ohio		44139

(Address of principal executive offices)		(Zip Code)

~~(Registrant’s~~440 ~~telephone~~/ ~~number, including area code)~~519-0500

~~Indicate by check mark whether the registrant~~ (~~1) has~~Registrant’s ~~filed~~telephone 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)number, ~~and~~including ~~(2) has~~area ~~been subject to such filing requirements for the past 90 days. Yes [X] No [ ]~~ code)

Indicate by check mark whether the registrant is(1) has anfiled ~~accelerated~~all ~~filer~~reports ~~(as~~required ~~defined~~to inbe ~~Rule~~filed by Section ~~12b-2~~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 ~~[ ]~~þ No ~~[X]~~o

~~There~~Indicate ~~were~~by ~~1,131~~check ~~shares~~mark ofwhether the ~~Registrant’s~~registrant ~~Common~~is ~~Stock,~~an ~~$.001~~accelerated ~~par~~filer ~~value~~(as ~~per~~defined ~~share,~~in ~~outstanding~~Rule 12b-2 as of the ~~December 31,~~Exchange ~~2004~~Act). Yes o No þ

~~INDEX~~Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No o

~~Advanced~~There ~~Lighting~~were ~~Technologies~~1,131 ~~Inc~~shares of the Registrant’s Common Stock, $.001 par value per share, outstanding as of March 31, 2005.

	Page No.
Part I Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets –
Reorganized Company as of December 31 and June 30, 2004		2
Condensed Consolidated Statements of Operations –
Reorganized Company for the Three Months Ended December 31, 2004		4
Reorganized Company for the Six Months Ended December 31, 2004		4
Predecessor Company for the Three Months Ended December 31, 2003		4
Predecessor Company for the Six Months Ended December 31, 2003		4
Condensed Consolidated Statement of Shareholders’ Equity –
Reorganized Company for the Six Months Ended December 31, 2004		5
Condensed Consolidated Statements of Cash Flows –
Reorganized Company for the Six Months Ended December 31, 2004		6
Predecessor Company for the Six Months Ended December 31, 2003		6
Notes to Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3. Quantitative and Qualitative Disclosures about Market Risk		22
Item 4. Controls and Procedures		22
Part II Other Information
Item 1. Legal Proceedings		23
Item 6. Exhibits and Reports on Form 8-K		23
Signatures		25
EX-12 Statement re: Computation of Ratio of Earnings to Fixed Charges
EX-31.1 Rule 13a-14(a)/15d-14(a) Certification
EX-31.2 Rule 13a-14(a)/15d-14(a) Certification
EX-32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
EX-32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

INDEX

1Advanced Lighting Technologies, Inc.


		Page No.
Part I	Financial Information

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets –
	Reorganized Company as of March 31, 2005 and June 30, 2004		2

	Condensed Consolidated Statements of Operations –
	Reorganized Company for the Three Months Ended March 31, 2005		4
	Reorganized Company for the Nine Months Ended March 31, 2005		4
	Reorganized Company for the Three Months Ended March 31, 2004		4
	Predecessor Company for the Six Months Ended December 31, 2003		4

	Condensed Consolidated Statement of Shareholders’ Equity –
	Reorganized Company for the Nine Months Ended March 31, 2005		5

	Condensed Consolidated Statements of Cash Flows –
	Reorganized Company for the Nine Months Ended March 31, 2005		6
	Reorganized Company for the Three Months Ended March 31, 2004		6
	Predecessor Company for the Six Months Ended December 31, 2003		6

	Notes to Condensed Consolidated Financial Statements		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		20

Item 4.	Controls and Procedures		21

Part II	Other Information

Item 6.	Exhibits and Reports on Form 8-K		22

Signatures			23

~~Advanced Lighting Technologies, Inc.~~1 ~~Condensed Consolidated Balance Sheets of Reorganized Company (in thousands, except per share amounts)~~

	(Unaudited)		(Audited)
	December 31,		June 30,
	2004		2004
Assets
Current assets:
Cash and cash equivalents	$	2,296	$	4,701
Trade receivables, less allowances of $900 and $706		29,575		29,787
Inventories:
Finished goods		15,822		16,105
Raw materials and work-in-process		12,393		9,073
		28,215		25,178
Prepaid expenses		2,210		1,552
Total current assets		62,296		61,218
Property, plant and equipment:
Land and buildings		18,638		18,165
Machinery and equipment		29,761		29,100
Furniture and fixtures		2,240		1,880
		50,639		49,145
Less accumulated depreciation		4,319		2,118
		46,320		47,027
Receivables from related parties		3,020		4,282
Investments in affiliates		2,201		2,360
Other assets		5,146		3,849
Intangible assets, net		24,543		24,810
Goodwill		50,561		50,561
	$	194,087	$	194,107

Advanced Lighting Technologies, Inc.
Condensed Consolidated Balance Sheets of Reorganized Company
(in thousands, except per share amounts)

See Notes to Condensed Consolidated Financial Statements, including Basis of Presentation describing the Reorganized Company.


	(Unaudited)		(Audited)
	March 31,		June 30,
	2005		2004
Assets
Current assets:
Cash and cash equivalents	$	2,483	$	4,701
Trade receivables, less allowances of $851 and $706		29,958		29,787
Inventories:
Finished goods		17,310		16,105
Raw materials and work-in-process		13,539		9,073

		30,849		25,178
Prepaid expenses		1,971		1,552

Total current assets		65,261		61,218
Property, plant and equipment:
Land and buildings		19,936		18,165
Machinery and equipment		30,258		29,100
Furniture and fixtures		2,504		1,880

		52,698		49,145
Less accumulated depreciation		5,481		2,118

		47,217		47,027

Receivables from related parties		3,023		4,282
Investments in affiliates		2,255		2,360
Other assets		3,870		3,849
Intangible assets, net		24,457		24,810
Goodwill		50,411		50,561

	$	196,494	$	194,107

2See Notes to Condensed Consolidated Financial Statements, including Basis of Presentation describing the Reorganized Company.

~~Table of Contents~~2

Advanced Lighting Technologies, Inc.
Condensed Consolidated Balance Sheets of Reorganized Company
(in thousands, except per share amounts)

	(Unaudited)		(Audited)
	December 31,		June 30,
	March 31,		June 30,
	2004		2004
	2005		2004
Liabilities and shareholders’ equity
Current liabilities:
Short-term debt and current portion of long-term debt	$	38,~~299~~968	$	4,184
Accounts payable		910,~~341~~496		10,755
Payables to related parties		~~1,358~~899		2,973
Employee-related liabilities		45,~~732~~346		6,197
Accrued income and other taxes		1,~~538~~327		1,414
Other accrued expenses and liabilities		11,449		9,216
Other accrued expenses		7,301		9,216
Total current liabilities		3134,~~717~~337		34,739
Long-term debt		~~125~~124,~~328~~715		126,679
Deferred tax liabilities		~~812~~857		700
Total liabilities		~~157~~159,~~857~~909		162,118
Minority interest		1,~~816~~953		1,477
Preferred stock, $.001 par value, 239 shares authorized; 29 Series A shares issued and outstanding		29,338		29,338
Preferred stock, $.001 par value, 239 shares authorized; 29 shares issued and outstanding		29,338		29,338
Common shareholders’ equity
Common stock, $.001 par value, 80,000 shares authorized; 1 share issued and outstanding		1		1
Paid-in-capital		1,130		1,130
Accumulated other comprehensive income (loss)		~~1,023~~889		(216	)
Retained earnings		23,~~922~~274		259
Total common shareholders’ equity		5,~~076~~294		1,174
	$	~~194~~196,~~087~~494	$	194,107

See Notes to Condensed Consolidated Financial Statements, including
Basis of Presentation describing the Reorganized Company.

~~Table~~Advanced Lighting Technologies, Inc. Condensed Consolidated Statements of ~~Contents~~Operations (Unaudited) (In thousands)

Advanced Lighting Technologies, Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands)


										Predecessor
	Reorganized Company									Company
	Quarter			Nine Months			Quarter			Six Months
	Ended			Ended			Ended			Ended
	March 31,			March 31,			March 31,			December 31,
	2005			2005			2004			2003

Net sales	$	40,272		$	119,972		$	36,944		$	70,510

Costs and expenses:
Cost of sales		24,335			71,278			22,475			43,361
Marketing and selling		6,125			17,967			5,729			11,311
Research and development		1,486			4,598			1,507			3,095
General and administrative		3,886			11,360			4,617			6,208
Amortization of intangible assets		246			735			227			177

Income from operations		4,194			14,034			2,389			6,358

Other income (expense):
Interest expense		(3,453	)		(10,345	)		(3,410	)		(7,459	)
Interest income		104			301			110			188
Income from investments		53			542			—			3
Gain on restructuring		—			—			—			1,184
Write-off of deferred loan costs		—			—			—			(2,251	)
Reorganization expenses		—			—			—			(11,258	)


Income (loss) before income taxes and minority interest		898			4,532			(911	)		(13,235	)
Income tax expense		409			1,041			301			360


Income (loss) before minority interest		489			3,491			(1,212	)		(13,595	)
Minority interest in income of consolidated subsidiary		(137	)		(476	)		(141	)		(251	)

Net income (loss)	$	352		$	3,015		$	(1,353	)	$	(13,846	)

	Reorganized Company						Predecessor Company
	Quarter			Six Months			Quarter			Six Months
	Ended			Ended			Ended			Ended
	December 31,			December 31,			December 31,			December 31,
	2004			2004			2003			2003
Net sales	$	41,122		$	79,700		$	37,678		$	70,510
Costs and expenses:
Cost of sales		24,339			46,943			23,182			43,361
Marketing and selling		5,947			11,842			6,010			11,311
Research and development		1,570			3,112			1,709			3,095
General and administrative		3,603			7,474			3,119			6,208
Amortization of intangible assets		248			489			89			177
Income from operations		5,415			9,840			3,569			6,358
Other income (expense):
Interest expense		(3,469	)		(6,892	)		(4,039	)		(7,459	)
Interest income		104			197			105			188
Income (Loss) from investments		3			489			(13	)		3
Gain on restructuring		—			—			1,184			1,184
Write-off of deferred loan costs		—			—			(2,251	)		(2,251	)
Reorganization expenses		—			—			(5,635	)		(11,258	)
Income (loss) before income taxes and minority interest		2,053			3,634			(7,080	)		(13,235	)
Income tax expense		259			632			272			360
Income (loss) before minority interest		1,794			3,002			(7,352	)		(13,595	)
Minority interest in income of consolidated subsidiary		(188	)		(339	)		(122	)		(251	)
Net income (loss)	$	1,606		$	2,663		$	(7,474	)	$	(13,846	)

See Notes to Condensed Consolidated Financial Statements, including Basis of
Presentation describing the Reorganized Company and Predecessor Company.

~~See Notes to Condensed Consolidated Financial Statements, including Basis of~~4 ~~Presentation describing the Reorganized Company and Predecessor Company.~~

4Advanced Lighting Technologies, Inc. Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) Nine Months Ended March 31, 2005 (in thousands)


									Accumulated
									Other					Common
	Preferred		Common Stock				Paid-In		Comprehensive			Retained		Shareholders’
	Stock		Shares		Par Value		Capital		Income (Loss)			Earnings		Equity		Total

Balance at June 30, 2004	$	29,338		1	$	1	$	1,130	$	(216	)	$	259	$	1,174	$	30,512

Net income - reorganized company		—		—		—		—		—			3,015		3,015		3,015

Foreign currency translation adjustment		—		—		—		—		1,105			—		1,105		1,105


Balance at March 31, 2005	$	29,338		1	$	1	$	1,130	$	889		$	3,274	$	5,294	$	34,632

~~Advanced~~See ~~Lighting~~Notes ~~Technologies,~~to ~~Inc.~~ Condensed Consolidated ~~Statement~~Financial ofStatements, ~~Shareholders’~~including Basis ~~Equity~~of ~~(Unaudited) Six~~Presentation ~~Months~~describing ~~Ended~~the ~~December 31,~~Reorganized ~~2004~~Company. ~~(in thousands)~~

									Accumulated
									Other					Common
	Preferred		Common Stock				Paid-In		Comprehensive			Retained		Shareholders'
	Stock		Shares		Par Value		Capital		Income (Loss)			Earnings		Equity		Total
Balance at June 30, 2004	$	29,338		1	$	1	$	1,130	$	(216	)	$	259	$	1,174	$	30,512
Net income — reorganized company		—		—		—		—		—			2,663		2,663		2,663
Foreign currency translation adjustment		—		—		—		—		1,239			—		1,239		1,239
Balance at December 31, 2004	$	29,338		1	$	1	$	1,130	$	1,023		$	2,922	$	5,076	$	34,414

~~See~~Advanced ~~Notes~~Lighting toTechnologies, Inc. Condensed Consolidated ~~Financial~~ Statements, ~~including Basis~~ of ~~Presentation~~Cash ~~describing~~Flows ~~the~~(Unaudited) (in ~~Reorganized Company.~~thousands)


	Reorganized			Reorganized			Predecessor
	Company			Company			Company
	Nine Months			Three Months			Six Months
	Ended			Ended			Ended
	March 31,			March 31,			December 31,
	2005			2004			2003
Operating activities
Net income (loss)	$	3,015		$	(1,353	)	$	(13,846	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		3,419			1,056			3,412
Amortization		735			227			177
Provision for doubtful accounts		173			177			381
Loss (income) from investments		(542	)		—			(3	)
Gain on restructuring		—			—			(1,184	)
Write-off of deferred loan costs		—			—			2,251
Reorganization expenses in excess of (less than) cash payments of reorganization expenses		(1,842	)		(4,743	)		2,968
Old Senior Note interest accrued but not paid		—			—			4,000
Payment of pre-petition payables		(371	)		(4,214	)		—
Changes in current assets and liabilities and other		(5,940	)		3,147			6,017

Net cash provided by (used in) operating activities		(1,353	)		(5,703	)		4,173

Investing activities
Capital expenditures		(4,135	)		(608	)		(1,799	)
Purchase of business		—			(827	)		—
Investment in affiliate		—			—			(592	)
Proceeds from sale of investment		450			—			—

Net cash used in investing activities		(3,685	)		(1,435	)		(2,391	)

Financing activities
Net borrowings under revolving credit loan		6,372			2,045			—
Net borrowings under debtor in possession facility		—			—			(25,126	)
Proceeds from long-term debt		—			—			11,000
Payments of long-term debt and capital leases		(3,552	)		(1,153	)		(1,522	)
Investment by Saratoga Lighting Holdings, LLC		—			—			18,000
Officer loan repayment		—			—			1,334
Stock purchases by executive management		—			61			—

Net cash provided by financing activities		2,820			953			3,686


Increase (decrease) in cash and cash equivalents		(2,218	)		(6,185	)		5,468
Cash and cash equivalents, beginning of period		4,701			9,635			4,167

Cash and cash equivalents, end of period	$	2,483		$	3,450		$	9,635


Supplemental cash flow information
Interest paid	$	13,601		$	3,418		$	1,200
Income taxes paid (refunds received), net		740			159			159
Capitalized interest		19			42			37

~~Table~~See Notes to Condensed Consolidated Financial Statements, including Basis of Presentation ~~Contents~~describing the Reorganized Company and Predecessor Company.

~~Advanced Lighting Technologies, Inc.~~6 ~~Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands)~~

	Reorganized			Predecessor
	Company			Company
	Six Months			Six Months
	Ended			Ended
	December 31,			December 31,
	2004			2003
Operating activities
Net income (loss)	$	2,663		$	(13,846	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		2,210			3,412
Amortization		489			177
Provision for doubtful accounts		166			381
Loss (income) from investments		(489	)		(3	)
Gain on restructuring		—			(1,184	)
Write-off of deferred loan costs		—			2,251
Reorganization expenses in excess of (less than) cash payments of reorganization expenses		(1,842	)		2,968
Old Senior Note interest accrued but not paid		—			4,000
Changes in current assets and liabilities and other		(1,753	)		6,032
Net cash provided by operating activities		1,444			4,188
Investing activities
Capital expenditures		(2,063	)		(1,799	)
Investment in affiliate		—			(592	)
Proceeds from sale of investment		450			—
Net cash used in investing activities		(1,613	)		(2,391	)
Financing activities
Net borrowings under revolving credit loan		642			—
Net borrowings (payments) under debtor in possession facility		—			(25,141	)
Proceeds from long-term debt		—			11,000
Payments of long-term debt and capital leases		(2,878	)		(1,522	)
Investment by Saratoga Lighting Holdings, LLC		—			18,000
Officer loan repayment		—			1,334
Net cash provided by (used in) financing activities		(2,236	)		3,671
Increase (decrease) in cash and cash equivalents		(2,405	)		5,468
Cash and cash equivalents, beginning of period		4,701			4,167
Cash and cash equivalents, end of period	$	2,296		$	9,635
Supplemental cash flow information
Interest paid	$	7,034		$	1,200
Income taxes paid		188			159
Capitalized interest		13			37

Advanced Lighting Technologies, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2005
(Dollars in thousands)

~~See~~A. ~~Notes to Condensed Consolidated Financial Statements, including Basis of~~Organization ~~Presentation describing the Reorganized Company and Predecessor Company.~~

6Advanced Lighting Technologies, Inc. (the “Company” or “ADLT”) is an innovation-driven designer, manufacturer and marketer focused on metal halide lighting products, including materials, system components, systems and equipment.

~~Table~~B. Basis of ~~Contents~~Presentation

~~Advanced~~The ~~Lighting~~accompanying ~~Technologies~~unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, ~~Inc~~they do not include all the information and disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, the ~~Notes~~financial tostatements ~~Condensed~~include ~~Consolidated~~all ~~Financial~~material ~~Statements~~adjustments ~~(Unaudited)~~necessary for a fair presentation, including ~~December 31~~adjustments of a normal and recurring nature as well as adjustments related to the Company’s emergence from bankruptcy. For further information, ~~2004~~refer to the consolidated financial statements ~~(Dollars~~and notes thereto included in ~~thousands)~~the Company’s Annual Report on Form 10-K for the year ended June 30, 2004.

AThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and related disclosures. ~~Organization~~Actual results could differ from those estimates.

On December 10, 2003, Advanced Lighting Technologies, Inc. and six of its United States subsidiaries, completed their previously announced financial restructuring when their Fourth Amended Chapter 11 Plan of Reorganization (the “~~Company~~Final Plan”) orunder “the U.S. Bankruptcy Code became effective and was substantially consummated. ADLT’s non-U.S. operating subsidiaries and Deposition Sciences, Inc., a U.S. subsidiary, were not a part of the proceedings under the Bankruptcy Code. The Company’s emergence from Chapter 11 bankruptcy proceedings resulted in a new reporting entity and the adoption of fresh start accounting in accordance with Statement of Position No. 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code. Also, as encouraged under SEC Staff Accounting Bulletin No. 54, Push Down Basis of Accounting Required in Certain Limited Circumstances, the Company has reflected an additional adjustment to establish a new basis for its assets and liabilities based on the amount paid by Saratoga Lighting Holdings, LLC (“Saratoga”) isfor its ownership. For financial reporting purposes, the Company used an ~~innovation-driven~~effective date ~~designer~~of December 31, 2003. References in these financial statements to “Predecessor Company” refer ~~manufacturer~~to ~~and~~the ~~marketer~~Company ~~focused~~prior to December 31, 2003. References to “Reorganized Company” refer to the Company on ~~metal~~and ~~halide~~after ~~lighting~~December 31, ~~products~~2003, ~~including~~after ~~materials~~giving effect to the issuance of new securities in exchange for the previously outstanding securities in accordance with the Final Plan, ~~system~~the ~~components~~additional investment in the Company by Saratoga, ~~systems~~and the implementation of fresh start and ~~equipment~~push down accounting.

~~B. Basis of Presentation~~7

~~The~~Advanced ~~accompanying~~Lighting unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. AccordinglyTechnologies, ~~they do not include all the information and disclosures required by generally accepted accounting principles for complete financial statements~~Inc. ~~In the opinion of management, the~~ ~~financial~~Notes ~~statements include all material adjustments necessary for a fair presentation, including adjustments of a normal and recurring nature as well as adjustments related~~ to ~~the~~Condensed ~~Company’s emergence~~Consolidated ~~from~~Financial ~~bankruptcy.~~Statements ~~For further information~~(Unaudited) March 31, ~~refer to the consolidated financial statements~~2005 ~~and~~(Dollars ~~notes thereto included~~ in ~~the Company’s Annual Report on Form 10-K for the year ended June 30,~~thousands) ~~2004.~~

~~The~~B. ~~preparation~~Basis of ~~financial~~Presentation ~~statements in conformity with accounting principles generally accepted~~(continued) ~~in the United States of America requires management to make estimates and assumptions that affect~~ ~~reported amounts and related disclosures. Actual results could differ from those estimates.~~

OnA ~~December 10,~~black ~~2003,~~line ~~Advanced~~has ~~Lighting~~been ~~Technologies,~~drawn ~~Inc.~~between ~~and six of its United States subsidiaries, (collectively,~~ the ~~“Debtors”),~~Reorganized ~~completed~~Company ~~their~~and ~~previously~~Predecessor ~~announced~~Company ~~financial restructuring~~results ~~when their Fourth Amended Chapter 11 Plan~~ of ~~Reorganization (the “Final Plan”) under~~ ~~the~~operations ~~U.S. Bankruptcy Code (the “Bankruptcy Code”) became effective~~ and ~~was~~statements ~~substantially consummated. ADLT’s non-U.S. operating subsidiaries and Deposition Sciences, Inc., a U.S. subsidiary, were not a part~~ of ~~the~~cash ~~proceedings under the Bankruptcy Code~~flows. The ~~Company’s~~results ~~emergence from~~of ~~Chapter 11~~operations ~~bankruptcy proceedings resulted in a new reporting entity~~ and ~~the~~statements ~~adoption~~ of ~~fresh start~~cash ~~accounting in accordance with Statement of Position No. 90-7, Financial Reporting by Entities~~flows infor ~~Reorganization under~~ the ~~Bankruptcy~~Reorganized ~~Code. Also, as encouraged under SEC Staff Accounting Bulletin No. 54, Push Down Basis of Accounting Required in Certain Limited Circumstances, the~~ Company ~~has reflected an additional adjustment to establish a new basis for its assets~~ and ~~liabilities~~ based on the amount paid by Saratoga Lighting Holdings, LLC (“Saratoga”) for its ownership. For financial reporting purposes, the Company used an effective date of December 31, 2003. References in these financial statements to “Predecessor Company” ~~refer~~are tonot ~~the~~considered ~~Company~~comparable ~~prior to December 31, 2003. References to “Reorganized Company” refer to the Company on and after December 31, 2003, after giving effect to the issuance of new securities~~ in ~~exchange~~all ~~for the previously outstanding securities in accordance with the Final Plan, the additional investment in the Company by Saratoga, and the implementation of fresh start and push down accounting~~respects.

7Reporting Periods

~~Table~~The Company’s subsidiaries have fiscal years that end on the Sunday closest to June 30 and fiscal quarters that end on the Sunday closest to the respective calendar quarter end. As a result, the first nine months of ~~Contents~~fiscal 2005 consisted of 40 weeks as compared to the first nine months of fiscal 2004 that consisted of 39 weeks. The three month periods ended March 31, 2005 and 2004 consisted of 13 weeks.

~~Advanced~~Income ~~Lighting Technologies, Inc.~~Taxes ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~December 31, 2004~~ ~~(Dollars in thousands)~~

BActual income tax expense for the interim periods differ from the amounts computed by applying the U.S. ~~Basis~~Federal income tax rate of ~~Presentation~~35% to the income (~~continued~~loss) before income taxes because under FAS No. 109, Accounting for Income Taxes, the tax benefit related to the U.S. loss for these interim periods was required to be reserved in a valuation allowance due to the uncertainty regarding the ultimate realization of the tax benefit of such losses. The income tax expense recognized for the interim periods relates to income taxes on certain foreign subsidiaries’ income. The Company had net operating losses at December 31, 2003 which, in accordance with the principles of fresh-start accounting, were not included in the net deferred tax assets of the Reorganized Company. These net operating losses are available to be utilized, and, to the extent the net operating losses are utilized ($150 in the current quarter), goodwill will be reduced accordingly for the benefit received.

~~A black line has been drawn between the results of operations and statements of cash flows to distinguish between the Reorganized Company and the Predecessor Company~~C. ~~The~~Comprehensive ~~results~~Income ~~of operations~~(Loss) ~~and statements of cash flows for the Reorganized Company and Predecessor Company are not considered~~ ~~comparable in all respects.~~

~~Reporting~~For ~~Periods~~the quarters ended March 31, 2005 and 2004, the Company’s comprehensive income (loss) was $218 and $(1,338), respectively. For the nine months ended March 31, 2005, the Company’s comprehensive income was $4,120. For the six months ended December 31, 2003, the Company’s comprehensive income (loss) was $(12,487). These amounts include the period’s net income (loss) and the Company’s other component of comprehensive income, foreign currency translation adjustments.

~~The Company’s subsidiaries have fiscal years that end on the Sunday closest to June 30 and fiscal~~8 quarters that end on the Sunday closest to the respective calendar quarter end. As a result, the first six months of fiscal 2005 consisted of 27 weeks as compared to the first six months of fiscal 2004 that consisted of 26 weeks. The three month periods ended December 31, 2004 and 2003 contained 13 weeks each.

~~Income~~Advanced ~~Taxes~~Lighting Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) March 31, 2005 (Dollars in thousands)

~~Actual income tax expense for the three month interim periods differ from the amounts computed by applying the U~~D.S. ~~Federal~~Financing ~~income tax rate of 35% to the income (loss) before income taxes because~~Facilities ~~under FAS No. 109, Accounting for Income Taxes, the tax benefit related to the U.S. loss for these~~ ~~interim periods was required to be reserved in a valuation allowance due to the uncertainty~~ ~~regarding the ultimate realization of the tax benefit of such losses. The income tax expense recognized for the interim periods relates to income taxes on certain foreign subsidiaries’ income.~~

CThe Company’s Bank Credit Facility is a $30,000 facility that consists of a term loan requiring monthly principal payments of $183 ($8,250 outstanding at March 31, 2005) with a revolving credit loan, subject to availability, making up the remainder of the facility. ~~Comprehensive~~Availability ~~Income~~of borrowings under the revolving credit loan is determined by the Company’s eligible account receivables and inventories. The amount outstanding under the revolving credit loan was $6,372 at March 31, 2005. Interest rates on the revolving credit loan are based on Libor plus 2.75% or Prime plus .75% (~~Loss~~6.50% at March 31, 2005). Interest rates on the term loan are based on Libor plus 3.50% or Prime plus 1.50% (7.25% at March 31, 2005). The final maturity of the facility is December 10, 2008. The revolving credit loan amount at March 31, 2005 has been classified as a current liability in accordance with the provisions of Emerging Issues Task Force Issue No. 95-22, Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements that include Both a Subjective Acceleration Clause and a Lock-box Arrangement.

~~For~~The ~~the~~Bank ~~quarters~~Credit ~~ended~~Facility ~~December 31,~~includes ~~2004~~affirmative and ~~2003,~~negative ~~the~~covenants ~~Company’s~~customary ~~comprehensive~~for ~~income~~this ~~(loss) was~~type of $2agreement,~~510~~ prohibits cash dividends and ~~$(6,341),~~includes ~~respectively~~financial covenants relating to Minimum Adjusted EBITDA and Capital Expenditures. ~~For~~The principal security for the ~~six~~Bank ~~months~~Credit ~~ended~~Facility ~~December 31,~~is substantially ~~2004~~all ~~and~~of ~~2003,~~the personal property of the Company’s ~~comprehensive~~and ~~income~~each ~~(loss) was~~of ~~$3,902~~its North American and ~~$(12,487),~~United Kingdom ~~respectively~~subsidiaries. ~~These~~The ~~amounts include~~term loan is secured by substantially all of the ~~period~~Company’s ~~net~~machinery ~~income~~and equipment ~~(loss)~~ in North America and the United Kingdom and the Company’s ~~other~~facility ~~component~~in ofUrbana, ~~comprehensive income~~Illinois, ~~foreign~~and ~~currency~~is ~~translation~~cross-collateralized ~~adjustments~~and secured with the revolving credit loan.

8The Company’s long-term debt includes $114,400 of 11% Senior Notes due March 2009. The Notes are redeemable at the Company’s option, in whole or in part, at any time at a redemption price equal to the principal amount of the New Notes plus accrued interest. Interest on the Notes is payable semi-annually on March 31 and September 30. The Indenture for the Notes contains covenants that, among other things, limit the ability of the Company and its Restricted Subsidiaries (as defined therein) to incur indebtedness, pay dividends, prepay subordinated indebtedness, repurchase capital stock, make investments, create liens, engage in transactions with stockholders and affiliates, sell assets and, with respect to the Company, engage in mergers and consolidations. There are no sinking fund requirements.

~~Table of Contents~~9

Advanced Lighting Technologies, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) ~~December~~March 31, ~~2004~~2005 (Dollars in thousands)

DE. ~~Financing~~Saratoga ~~Facilities~~Investment

~~The~~Saratoga ~~Company’s~~received, ~~Bank~~in ~~Credit~~exchange ~~Facility~~for iscancellation aof ~~$30,000~~its ~~facility~~holdings ~~that consists~~ of athe ~~term~~Predecessor ~~loan~~Company’s ~~that requires~~Common ~~monthly~~Stock ~~principal~~and ~~payments~~Old ofPreferred ~~$183 ($8~~Stock,~~800~~ ~~outstanding~~and atan ~~December 31~~$18,000 ~~2004)~~cash ~~with a revolving credit loan~~investment, ~~subject~~new toredeemable ~~availability,~~preferred ~~making~~stock up (the “Series A ~~remainder~~Preferred”) of the ~~facility.~~Reorganized ~~Availability~~Company, ~~of borrowings~~with ~~under~~an ~~the~~initial ~~revolving~~liquidation ~~credit~~preference ~~loan is determined by the Company’s eligible account~~of ~~receivables~~$29,000, and ~~inventories.~~approximately ~~The~~91% ~~amount~~of ~~outstanding under~~ the ~~revolving~~common ~~credit~~stock ~~loan~~of ~~was $642 at December 31, 2004. Interest rates on~~ the ~~revolving~~Reorganized ~~credit~~Company ~~loan are based~~ (on ~~Libor~~a ~~plus~~diluted ~~2.75% or~~basis, ~~Prime~~assuming ~~plus~~issuance ~~.75%~~of ~~(6.00%~~common atstock ~~December 31,~~of ~~2004).~~the ~~Interest~~Reorganized ~~rates~~Company onto ~~the~~its ~~term~~senior ~~loan~~management ~~are~~pursuant ~~based on Libor~~to ~~plus~~the ~~3.50%~~new ormanagement ~~Prime~~incentive ~~plus 1.50% (6.75% at December 31, 2004~~plan). ~~The~~Under ~~final maturity of~~ the ~~Bank~~management ~~Credit Facility~~incentive ~~is December 10~~plan, ~~2008.~~shares ~~The~~equal ~~revolving credit loan amount at December 31, 2004 has been~~to ~~classified~~approximately as9% aof ~~current liability in accordance with~~ the ~~provisions~~common ofstock ~~Emerging Issues Task Force Issue No. 95-22, Balance Sheet Classification~~ of ~~Borrowings~~the ~~Outstanding~~Reorganized ~~under~~Company ~~Revolving~~have ~~Credit Agreements~~been ~~that include Both a Subjective Acceleration Clause and a Lock-box Arrangement~~issued.

The ~~Bank~~Series A ~~Credit~~Preferred ~~Facility~~has ~~includes~~a ~~affirmative~~liquidation ~~and~~preference ~~negative~~of ~~covenants~~$1 ~~customary~~per ~~for~~share, ~~this~~plus ~~type~~dividends at the rate of ~~agreement,~~8% ~~prohibits~~per ~~cash~~annum, ~~dividends~~when and ~~includes~~if ~~financial~~declared. ~~covenants~~The ~~relating~~cumulative toundeclared ~~Minimum~~dividends ~~Adjusted EBITDA~~were ~~and~~$3,125 ~~Capital~~as ~~Expenditures~~of March 31, 2005. The ~~principal~~initial ~~security~~carrying ~~for~~amount of the ~~Bank~~Series A ~~Credit~~Preferred ~~Facility~~was isset at $29,000, the estimated ~~substantially~~fair ~~all~~value ofat the ~~personal~~date ~~property~~of issuance. The Holder of the Series A Preferred may, by notice, require the Company ~~and~~to ~~each~~redeem the outstanding Series A Preferred within 21 days following the occurrence of certain ~~its~~corporate ~~North~~events. ~~American~~The ~~and~~Company ~~United~~may redeem the Series A Preferred in whole, but not in part, ~~Kingdom~~at ~~subsidiaries~~any time. The ~~term~~redemption ~~loan~~price for the Series A Preferred is ~~secured~~equal byto ~~substantially~~the ~~all~~liquidation preference amount for such shares. The Series A Preferred shares are each entitled to one vote on each matter presented to shareholders of the Company’s, ~~machinery~~as ~~and~~well as one vote on each matter required ~~equipment~~to inbe ~~North~~voted ~~America~~upon ~~and~~by the ~~United~~Series A ~~Kingdom~~Preferred ~~and~~as a class. As a consequence, the Series A Preferred represents approximately 96.3% of the voting power of the Company’s ~~facility~~at inMarch 31, ~~Urbana~~2005. As of March 31, ~~Illinois~~2005, ~~and~~ isSaratoga ~~cross-collateralized~~held ~~and~~98.5% ~~secured~~of ~~with~~ the ~~revolving~~voting ~~credit~~power ~~loan~~of the Company.

~~On December~~ 10~~, 2003, in connection with the Company’s emergence from bankruptcy proceedings, the~~ Company’s Old 8% Senior Notes were cancelled and, in exchange for such Old Senior Notes, the Company issued $114,400 of 11% Senior Notes due March 2009 (“New Notes”). The aggregate principal amount of the New Notes is equal to the aggregate principal amount of the Company’s Old Senior Notes, plus interest which would have accrued and been unpaid through December 31, 2003. The New Notes are redeemable at the Company’s option, in whole or in part, at any time at a redemption price equal to the principal amount of the New Notes plus accrued interest. Interest on the New Notes is payable semi-annually on March 31 and September 30.

~~The~~Item ~~Indenture~~2. ~~for~~Management’s ~~the~~Discussion ~~New~~and ~~Notes~~Analysis ~~contains~~of ~~covenants~~Financial ~~that,~~Condition ~~among~~and ~~other~~Results ~~things, limit the ability~~ of ~~the~~ ~~Company~~Operations ~~and its Restricted Subsidiaries~~ (asDollars ~~defined therein) to incur indebtedness, pay dividends, prepay subordinated indebtedness, repurchase capital stock, make investments, create liens, engage~~ in ~~transactions with stockholders and affiliates, sell assets and, with respect to the Company, engage in mergers and consolidations. There are no sinking fund requirements.~~ thousands)

9This report on Form 10-Q may contain forward-looking statements that involve risks and uncertainties. The operation of the Company and its subsidiaries involves risks and uncertainties, including the strength of the recovery of the U.S. economy, trends affecting the Company’s financial condition or results of operations, continued growth of the metal halide lighting market, the Company’s operating and growth strategies, potential acquisitions or joint ventures by the Company, litigation affecting the Company, the timely development and market acceptance of new products, the ability to provide adequate incentives to retain and attract key employees, the impact of competitive products and pricing, and other risks. For this purpose, any statement contained herein that is not a statement of historical fact may be deemed to be a forward-looking statement. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The Company’s actual results may differ materially from those indicated by such forward-looking statements based on the factors outlined above.

~~Table~~The following is management’s discussion and analysis of ~~Contents~~certain significant factors which have affected the results of operations and should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and notes thereto.

~~Advanced Lighting Technologies, Inc.~~General ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~ ~~December 31, 2004~~ ~~(Dollars in thousands)~~

EThe Company is an innovation-driven designer, manufacturer and marketer focused on metal halide lighting products, including materials, system components, systems and equipment. ~~Saratoga~~Metal ~~Investment~~halide lighting is currently used primarily in commercial and industrial applications such as factories and distribution centers, outdoor site and landscape lighting, sports facilities and large retail spaces such as superstores. Systems, components and materials revenue is recognized when products are shipped, and equipment revenue is recognized under the percentage of completion method.

~~Saratoga~~Consistent ~~received,~~with inthe ~~exchange~~Company’s strategy for ~~cancellation~~new ofproduct ~~its~~introductions, ~~holdings of~~ the ~~Predecessor~~ Company’s ~~Common~~invests ~~Stock~~substantial resources in research and ~~Old~~development ~~Preferred~~to ~~Stock,~~engineer materials and ansystem ~~$18,000~~components ~~cash~~to ~~investment,~~be included ~~new~~in ~~redeemable~~customers’ ~~preferred~~specialized ~~stock~~systems. (Such expenditures have enabled the Company to develop ~~“Series A~~new ~~Preferred”)~~applications offor ~~the~~metal ~~Reorganized~~halide ~~Company~~lighting, ~~with~~improve anthe ~~initial~~quality ~~liquidation~~of ~~preference~~its ~~of $29~~materials,~~000,~~ and ~~approximately~~introduce ~~91%~~new specialized ofproducts, such as the ~~common~~Uni-Form® ~~stock~~pulse start products. Uni-Form® pulse start products are a new generation of ~~the~~metal ~~Reorganized~~halide ~~Company~~components ~~(on~~and systems which permit (a) increased ~~diluted~~light ~~basis,~~output ~~assuming~~with ~~issuance~~lower ofpower ~~common~~utilization, ~~stock~~(b) faster ofstarting, ~~the~~(c) a ~~Reorganized~~quicker ~~Company~~restart toof ~~its~~lamps ~~senior~~which ~~management~~have ~~pursuant to~~been ~~the~~recently ~~new~~turned ~~management~~off, ~~incentive~~and ~~plan~~(d). better ~~Under~~color ~~the~~uniformity. ~~management~~The ~~incentive~~Company ~~plan,~~expects ~~shares~~to ~~equal~~continue to make ~~approximately~~substantial 9%expenditures ofon ~~the~~research ~~common~~and ~~stock~~development ofto enhance its position as the ~~Reorganized~~leading innovator ~~Company~~in ~~have~~the ~~been~~metal ~~issued~~halide lighting industry.

~~The Series A Preferred has a liquidation preference of $1 per share, plus dividends at the rate of~~11 8% per annum, when and if declared. The cumulative undeclared dividends were $2,489 as of December 31, 2004. The initial carrying amount of the Series A Preferred was set at $29,000, the estimated fair value at the date of issuance. The Holder of the Series A Preferred may, by notice, require the Company to redeem the outstanding Series A Preferred within 21 days following the occurrence of certain corporate events. The Company may redeem the Series A Preferred in whole, but not in part, at any time. The redemption price for the Series A Preferred is equal to the liquidation preference amount for such shares. The Series A Preferred shares are each entitled to one vote on each matter presented to shareholders of the Company, as well as one vote on each matter required to be voted upon by the Series A Preferred as a class. As a consequence, the Series A Preferred represents approximately 96.3% of the voting power of the Company at December 31, 2004. As of December 31, 2004, Saratoga held 98.5% of the voting power of the Company.

10Results of Operations

~~Table~~Quarter ofEnded ~~Contents~~March 31, 2005 compared to Quarter Ended March 31, 2004

~~Item~~The 2.following ~~Management’s~~table ~~Discussion~~sets ~~and~~forth, ~~Analysis~~as a percentage of ~~Financial~~net ~~Condition~~sales, ~~and~~certain ~~Results~~items in the Company’s Condensed Consolidated Statements of Operations for the three months ended March 31, 2005 and 2004:

(Dollars in thousands)


	Three Months Ended					Three Months Ended
	March 31, 2005					March 31, 2004
Net sales	$	40,272		100.0	%	$	36,944		100.0	%
Costs and expenses:
Cost of sales		24,335		60.4			22,475		60.8
Marketing and selling		6,125		15.2			5,729		15.5
Research and development		1,486		3.7			1,507		4.1
General and administrative		3,886		9.7			4,617		12.5
Amortization of intangible assets		246		0.6			227		0.6

Income from operations		4,194		10.4			2,389		6.5

Other income (expense):
Interest expense		(3,453	)	(8.6	)		(3,410	)	(9.3	)
Interest income		104		0.3			110		0.3
Income from investments		53		0.1			—		—


Income (loss) before income taxes and minority interest		898		2.2			(911	)	(2.5	)
Income tax expense		409		1.0			301		0.8


Income (loss) before minority interest		489		1.2			(1,212	)	(3.3	)
Minority interest in income of consolidated subsidiary		(137	)	(0.3	)		(141	)	(0.4	)


Net income (loss)	$	352		0.9	%	$	(1,353	)	(3.7	%)

~~This~~Factors ~~report on Form 10-Q may contain forward-looking statements~~ that ~~involve~~have ~~risks~~affected ~~and uncertainties. On February 5, 2003,~~ the ~~Company~~results ~~and six~~ of ~~its~~operations ~~United~~for ~~States subsidiaries (~~the ~~“Debtors”),~~ ~~filed~~third ~~voluntary~~quarter ~~petitions for reorganization under Chapter 11~~ of ~~the~~fiscal ~~United~~2005 ~~States~~as ~~Bankruptcy~~compared ~~Code. Effective December 10, 2003, the Debtors emerged from bankruptcy protection pursuant~~ to the ~~Bankruptcy~~third ~~Court’s~~quarter ~~confirmation~~ of the Debtors’ Fourth Amended Chapter 11 Plan of Reorganization (the “Plan”). The operation of the Company and its subsidiaries following emergence from bankruptcy court protection involves risks and uncertainties, including the strength of the recovery of the U.S. economy, trends affecting the Company’s financial condition or results of operations, continued growth of the metal halide lighting market, the Company’s operating strategy and growth strategy, potential acquisitions or joint ventures by the Company, litigation affecting the Company, the timely development and market acceptance of new products, the ability to provide adequate incentives to retain and attract key employees, the impact of competitive products and pricing, and other risks which are detailed in the Company’s Form 10-K for the fiscal ~~year ended June 30,~~ 2004. For this purpose, any statement contained herein that is not a statement of historical fact may be deemed to be a forward-looking statement. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are ~~intended~~discussed ~~to identify forward-looking statements~~below. ~~The Company’s actual results may differ materially from those~~ ~~indicated by such forward-looking statements based on the factors outlined above.~~

~~The~~Net ~~following~~Sales. isNet ~~management’s~~sales ~~discussion~~increased ~~and~~9.0% ~~analysis~~to $40,272 in the third quarter of ~~certain~~fiscal ~~significant~~2005 ~~factors~~from ~~which~~$36,944 ~~have~~in ~~affected~~ the ~~results~~third quarter of ~~operations~~fiscal ~~and~~2004. ~~should~~Third bequarter ~~read~~metal inhalide ~~conjunction~~product sales increased 11% to $32,678 compared with $29,436 in the ~~accompanying~~same period last year. This increase in metal halide product ~~unaudited~~sales ~~Condensed~~is ~~Consolidated~~primarily ~~Financial~~the ~~Statements~~result of an increase in sales of lamps and ~~notes~~power ~~thereto~~supplies. Non-metal halide lighting product sales decreased 4% over the year ago period due primarily to a decrease in non-metal halide material sales.

~~General~~Total lighting product sales inside the U.S. increased 15% in the third quarter of fiscal 2005 as compared to the same period a year ago due primarily to an increase in sales of lamps and power supplies. Total lighting product sales outside the U.S. increased 4% as compared to the year ago period due primarily to increases in lamp sales and an increase in foreign currency exchange rates.

~~The~~Pricing ~~Company~~in isthe ~~an innovation-driven designer, manufacturer and marketer focused on~~ metal halide lighting ~~products,~~business ~~including~~is ~~materials~~competitive, ~~system components, systems~~ and ~~equipment.~~prices ~~Metal~~for ~~halide lighting~~the isCompany’s ~~currently used primarily in commercial and industrial applications such as factories~~products ~~and~~have ~~distribution~~remained ~~centers,~~flat ~~outdoor~~or ~~site~~declined ~~and landscape lighting, sports facilities and large retail spaces such as superstores~~slightly. ~~Systems,~~The ~~components~~introduction ~~and~~of ~~materials~~new ~~revenue is recognized when~~ products ~~are~~ ~~shipped,~~has ~~and~~helped ~~equipment~~to ~~revenue is recognized under~~ stabilize the ~~percentage~~Company’s ofproduct ~~completion method~~pricing.

~~Consistent with the Company’s strategy for new product introductions, the Company invests~~12 substantial resources in research and development to engineer materials and system components to be included in customers’ specialized systems. Such expenditures have enabled the Company to develop new applications for metal halide lighting, improve the quality of its materials, and introduce new specialized products, such as the Uni-Form® pulse start products. Uni-Form® pulse start products are a new generation of metal halide components and systems which permit (a) increased light output with lower power utilization, (b) faster starting, (c) a quicker restart of lamps which have been recently turned off, and (d) better color uniformity. The Company expects to continue to make substantial expenditures on research and development to enhance its position as the leading innovator in the metal halide lighting industry.

11Cost of Sales. Cost of sales increased 8.3% to $24,335 in the third quarter of fiscal 2005 from $22,475 in the third quarter of fiscal 2004. Cost of sales in the third quarter of fiscal 2004 included an additional amount of $1,500 above the Company’s normal manufacturing cost. In accordance with “fresh-start” accounting principles, inventory as of December 31, 2003, was recorded at fair value, which amount approximated $1,500 above manufacturing cost in the Company’s condensed consolidated balance sheet as of December 31, 2003. This additional amount reduced reported gross margin and net profit in the third quarter of fiscal 2004 as the inventory was sold. As a percentage of net sales, cost of sales was 60.4% for the third quarter of fiscal 2005. This compares with cost of sales of 60.8% for fiscal 2004, including the $1,500 described above. The additional $1,500 represented 4.1% of sales in the third quarter of fiscal 2004.

~~Table~~The relatively high percentage of ~~Contents~~cost of sales in the third quarter of fiscal 2005 was due to several factors including a change in the mix of product sales toward lamps and power supplies that typically have a lower margin than material sales. Additionally, the cost of copper and steel used in the production of power supplies has risen significantly from the year ago comparable period. Finally, the Company incurred some additional costs due to its previously announced transition of its North American power supply manufacturing operation to Chennai, India. While this transition will result in higher costs during the last half of fiscal 2005, the Company believes that the lower cost of production in India will benefit the Company in fiscal 2006 and beyond.

~~Results~~Marketing and Selling Expenses. Marketing and selling expenses increased 6.9% to $6,125 in the third quarter of ~~Operations~~fiscal 2005 from $5,729 in the third quarter of fiscal 2004. As a percentage of net sales, marketing and selling expenses decreased to 15.2% in the third quarter of fiscal 2005 from 15.5% in the third quarter of fiscal 2004. This decrease in marketing and selling expenses as a percentage of sales was a result of a more rapid increase in sales than the increase in marketing and selling expenses.

~~The~~Research ~~Company’s~~and ~~emergence~~Development ~~from~~Expenses. ~~Chapter 11~~Research ~~bankruptcy~~and ~~proceedings~~development ~~resulted~~expenses inremained arelatively ~~new~~constant at ~~reporting~~$1,486 ~~entity and~~in ~~adoption~~the third quarter of ~~fresh~~fiscal ~~start~~2005 ~~accounting~~as compared to $1,507 in ~~accordance~~the ~~with~~third ~~Statement~~quarter of ~~Position No~~fiscal 2004. Research and development expenses relate to: (i) ~~90-7,~~expansion ~~Financial Reporting~~of bythe ~~Entities~~product line and continued improvement in ~~Reorganization~~lamp ~~Under~~technology including the ~~Bankruptcy~~line ~~Code.~~of ~~For~~Uni-Form® ~~financial~~pulse ~~reporting~~start lamps (with ~~purposes,~~improved ~~the~~energy ~~Company~~efficiency, ~~used~~quicker anstarting ~~effective~~and ~~date~~restarting ofand ~~December 31,~~a ~~2003.~~more ~~References~~compact toarc ~~“Predecessor~~source, which ~~Company”~~improves ~~refer~~the tolight ~~the~~and ~~Company~~reduces ~~prior~~material tocosts); ~~December~~(ii) ~~31,~~continual ~~2003.~~development ~~References~~of tonew ~~“Reorganized~~materials ~~Company”~~for the ~~refer~~world’s tomajor ~~the~~lighting ~~Company~~manufacturers; on(iii) development and ~~after~~testing ~~December 31,~~of ~~2003.~~electronic Aand electromagnetic ~~black~~power ~~line~~supply ~~has~~systems; ~~been~~and, ~~drawn~~(iv) improvement ~~between~~of ~~the results~~coating processes of ~~operations~~optical thin-films ~~noted~~to ~~below~~broaden tothe ~~distinguish~~applications ~~between~~and ~~the~~development ~~Reorganized~~of ~~Company~~new thin-film materials, and ~~the~~using ~~Predecessor~~coatings ~~Company~~to develop improvements to lighting technologies. The ~~results~~Company ofexpects ~~operations~~to ~~for~~continue ~~the~~to ~~Reorganized~~make substantial ~~Company~~expenditures on research and ~~Predecessor~~development ~~Company are~~to ~~not~~enhance ~~considered~~its ~~comparable~~position as the leading innovator in ~~all~~the ~~respects~~metal halide lighting industry.

~~The~~General ~~following~~and ~~table~~Administrative ~~sets~~Expenses. ~~forth~~General and administrative expenses decreased 15.8% to $3,886 in asthe athird ~~percentage~~quarter of ~~net~~fiscal ~~sales~~2005 as compared to $4,617 ~~certain~~in ~~items~~the third quarter of fiscal 2004. The decrease in general and administrative expenses was primarily due to a decrease in the ~~Company’s~~CEO ~~Condensed~~retention ~~Consolidated~~bonus ~~Statements~~expense of ~~Operations~~$507 ~~for~~(A total of $2,027 is being accrued ratably over the ~~three~~twelve months ended ~~December 31~~fiscal 2005, while $2,027 was accrued over the last six months of fiscal 2004). ~~and~~The ~~2003:~~after-tax amount of the CEO retention bonus, approximately $1,147, is scheduled to be applied against the Company’s receivable from the CEO in July 2005.

	Reorganized Company					Predecessor Company
	Three Months Ended					Three Months Ended
	December 31, 2004					December 31, 2003
Net sales	$	41,122		100.0	%	$	37,678		100.0	%
Costs and expenses:
Cost of sales		24,339		59.2			23,182		61.5
Marketing and selling		5,947		14.5			6,010		16.0
Research and development		1,570		3.8			1,709		4.4
General and administrative		3,603		8.7			3,119		8.8
Amortization of intangible assets		248		0.6			89		0.3
Income from operations		5,415		13.2			3,569		9.0
Other income (expense):
Interest expense		(3,469	)	(8.4	)		(4,039	)	(10.6	)
Interest income		104		0.2			105		0.3
Income from investments		3		—			(13	)	—
Gain on restructuring		—		—			1,184		1.7
Write-off of deferred loan costs		—		—			(2,251	)	(3.2	)
Reorganization expenses		—		—			(5,635	)	(16.0	)
Income (loss) before income taxes and minority interest		2,053		5.0			(7,080	)	(18.8	)
Income tax expense		259		0.6			272		0.5
Income (loss) before minority interest		1,794		4.4			(7,352	)	(19.3	)
Minority interest in income of consolidated subsidiary		(188	)	(0.5	)		(122	)	(0.3	)
Net income (loss)	$	1,606		3.9	%	$	(7,474	)	(19.6	)%

Amortization of Intangible Assets. Amortization expense of $246 in the third quarter of fiscal 2005 was comparable to amortization expense of $227 in the third quarter of fiscal 2004.

~~Factors that have affected the results of operations for the second quarter of fiscal 2005 as~~13 ~~compared to the second quarter of fiscal 2004 are discussed below.~~

12Income from Operations. As a result of the items noted above, the Company realized income from operations in the third quarter of fiscal 2005 of $4,194 as compared to income from operations of $2,389 in the year ago period.

~~Table~~Interest Expense. Interest expense in the third quarter of ~~Contents~~fiscal 2005 of $3,453 was comparable to the interest expense of $3,410 in the third quarter of fiscal 2004. The interest expense in both periods includes interest on the Company’s 11% Senior Notes.

~~Net~~Income ~~Sales.~~(Loss) ~~Net~~from ~~sales~~Investments. ~~increased~~The ~~9.1%~~income tofrom ~~$41,122~~investments in the ~~second~~third quarter of fiscal 2005 ~~from $37,678 in the second quarter~~ of ~~fiscal 2004. Second quarter metal halide product sales increased 12% to~~ $~~31,616~~53 ~~compared~~represents ~~with $28,154 in~~ the ~~same~~equity ~~period~~income ~~last~~from ~~year. This increase in metal halide product sales is primarily~~ the ~~result~~Company’s of40% anownership ~~increase in lamp and material sales. Sales~~ of Aldrich-APL ~~materials increased 5% over the same quarter a year ago. Geographically~~LLC, ~~these materials sales decreased 15%~~a inmanufacturer ~~the U.S.~~ and ~~increase~~distributor ~~17%~~of ~~outside the U.S. Non~~ultra-~~metal~~pure ~~halide~~inorganics ~~lighting~~and ~~product~~metals ~~sales~~for ~~decreased 27%~~high-technology ~~over the year ago period due primarily to a decrease in power supply sales~~applications.

~~Total~~Income ~~lighting~~(Loss) ~~product~~before ~~sales~~Income ~~inside~~Taxes ~~the~~and UMinority Interest.S. ~~increased~~The 5%Company inhad ~~the~~income ~~second~~before ~~quarter of fiscal 2005 as~~income ~~compared~~taxes toand ~~the~~minority ~~same~~interest ~~period~~of a$898 ~~year ago due to a 12% increase~~ in ~~lamp~~the ~~sales~~third ~~offset~~quarter byof afiscal ~~decrease~~2005 ~~in U.S materials and power supplies sales. Total lighting product sales outside the U.S. increased 5%~~ as compared to ~~the~~a ~~year~~loss before ~~ago~~income ~~period~~taxes ~~due to increases in lamp~~ and ~~material~~minority ~~sales~~interest ~~offset~~of by$(911) ~~a decrease~~ in ~~non-metal~~the ~~halide~~third ~~power~~quarter ~~supply~~of ~~sales~~fiscal 2004.

~~Pricing~~Income inTax ~~the~~Expense. ~~metal~~Income ~~halide~~tax ~~lighting~~expense ~~business~~was is$409 ~~competitive,~~for ~~and~~the ~~prices~~third ~~for~~quarter ~~the~~of ~~Company’s~~fiscal ~~products~~2005 as compared ~~have~~to ~~remained~~$301 ~~flat~~in orthe ~~declined~~third ~~slightly~~quarter of fiscal 2004. The ~~introduction~~income oftax ~~new~~expense ~~products~~in ~~has~~both ~~helped~~quarters torelated ~~stabilize~~to certain of the Company’s ~~product~~foreign ~~pricing~~operations.

~~Cost~~At ofJune 30, ~~Sales.~~2004, ~~Cost~~the ofCompany ~~sales~~had ~~increased~~net ~~5.0%~~operating toloss carryforwards of $24130,~~339~~833 inavailable ~~the~~to ~~second~~reduce future ~~quarter~~United ofStates ~~fiscal~~federal ~~2005~~taxable ~~from $23~~income,~~182~~ inwhich ~~the~~expire ~~second~~2008 ~~quarter~~through ~~of fiscal 2004~~2024. AsOn aAugust 15, ~~percentage~~2003, Saratoga ofpurchased ~~net~~the ~~sales,~~preferred ~~cost~~and ofcommon ~~sales decreased~~shares toowned 59by GE.2% inThis ~~the~~transaction ~~second~~caused ~~quarter~~an ownership ofchange ~~fiscal~~greater ~~2005~~than ~~from 61.5~~50% inwhich ~~the~~will ~~second~~limit ~~quarter~~the ofannual ~~fiscal 2004.~~net ~~The~~operating ~~reduction~~loss inthe ~~cost~~Company ofcan use ~~sales~~to asoffset aany ~~percentage~~future oftaxable ~~sales~~income ispursuant ~~due~~ to Section 382 of the ~~transfer~~Internal ofRevenue ~~lamp~~Code. ~~and~~This ~~power~~limitation ~~supply~~is ~~production~~effective towith ~~India,~~the ~~improvements~~fiscal inyear ~~cost~~ended ~~management~~June 30, an2004. ~~improvement~~The inCompany ~~the~~also ~~product mix~~has ~~(more~~a ~~lamp~~capital loss ~~and~~carryforward ~~material~~of ~~sales~~$40,117 ~~and~~available ~~less~~to ~~power~~reduce ~~supply~~future ~~sales),~~capital ~~and~~gains. aThe ~~reduction~~usage inof ~~depreciation~~this ~~expense~~carryforward ofwill ~~$532~~also ~~related~~be ~~primarily~~limited toas ~~the~~a ~~effects~~result of the ~~application~~ownership ofchange. ~~fresh-start~~This ~~accounting~~carryforward expires ~~principles~~in 2007.

~~Marketing~~The ~~and~~Company ~~Selling~~also ~~Expenses.~~had ~~Marketing~~research and ~~selling~~development ~~expenses~~credit ~~decreased~~carryforwards ~~1.0%~~of toapproximately $53,~~947~~818 available inat ~~the second~~June 30, ~~quarter~~2004, ofwhich ~~fiscal~~expire ~~2005~~2008 ~~from~~through $62020. Additionally,~~010~~ in ~~the~~conjunction ~~second~~with ~~quarter~~the Alternative ofMinimum ~~fiscal~~Tax ~~2004.~~(“AMT”) ~~As a percentage of net sales~~rules, ~~marketing~~the ~~and~~Company ~~selling~~had ~~expenses~~available ~~decreased~~AMT tocredit ~~14.5%~~carryforwards infor ~~the~~tax purposes ~~second~~of ~~quarter~~approximately of$98, ~~fiscal~~which ~~2005 from~~may ~~16.0%~~be inused ~~the~~indefinitely ~~second~~to ~~quarter~~reduce ofregular ~~fiscal~~federal ~~2004~~income taxes. ~~This~~The ~~decrease~~usage ~~resulted~~of ~~from~~these ~~the~~credits ~~significant increase~~will inalso ~~sales~~be ~~that~~limited ~~occurred~~as ~~while~~a ~~marketing~~result ~~and~~of ~~sales~~the ~~expenses~~ownership ~~were held relatively constant~~change.

~~Research and Development Expenses. Research and development expenses decreased 8.1% in the second quarter of fiscal 2005 to $1~~Also,~~570~~ ~~from~~at $1June 30,~~709~~ ~~in the second quarter of fiscal~~ 2004. Research and development expenses incurred related to: (i) expansion of the product line and continued improvement in lamp technology including the line of Uni-Form® pulse start lamps (with improved energy efficiency, ~~quicker starting and restarting and a more compact arc source, which improves~~ the ~~light~~Company ~~and~~had ~~reduces~~foreign ~~material~~net ~~costs)~~operating ~~intended~~loss tocarryforwards ~~replace many first generation metal halide lamps in industrial and commercial applications; (ii) continual development of new materials~~ for ~~the world’s~~tax ~~major lighting manufacturers; (iii) development and testing of electronic and~~purposes ~~electromagnetic~~totaling ~~power supply systems; and~~$1,163 ~~(iv) improvement~~that ofexpire ~~coating~~2006 ~~processes of optical thin-films~~ to ~~broaden~~2007 ~~the applications~~ and ~~development of new thin-film materials~~$9,395 ~~and~~that ~~using coatings~~have tono ~~develop~~expiration ~~improvements to lighting technologies~~dates. ~~The Company expects to continue to make~~ ~~substantial expenditures on research and development to enhance its position as the leading~~ ~~innovator in the metal halide lighting industry.~~

~~General~~Nine ~~and~~Months ~~Administrative~~Ended ~~Expenses. General and administrative expenses increased 15.5% to $3~~March 31,~~603 in~~ ~~the second quarter of fiscal~~ 2005 ~~from~~compared ~~$3,119 in the second quarter of fiscal 2004. The increase in general and administrative expenses was due~~ to anNine ~~increase~~Months inEnded ~~bonus expense of $786~~March 31, ~~including~~ ~~$507 for the CEO retention bonus, offset by reductions in corporate overhead costs. The~~2004 ~~after-tax amount of the~~

13The Company’s emergence from Chapter 11 bankruptcy proceedings in December 2003 resulted in a new reporting entity and the adoption of fresh start reporting. Generally accepted accounting principles do not permit combining the results of the Reorganized Company with those of the Predecessor Company in the condensed consolidated financial statements. Accordingly, the Consolidated Statement of Operations does not present results for the nine months ended March 31, 2004. However, in order to provide useful information and to facilitate understanding of the operating results for the nine months ended March 31, 2005 relative to the corresponding fiscal 2004 period, the following discussion combines the reported

~~Table of Contents~~14

~~CEO~~ ~~retention~~operating ~~bonus,~~income ~~approximately~~of ~~$286,~~the isPredecessor Company ~~scheduled~~for tothe besix ~~applied~~months ~~against~~ended December 31, 2003 and of the Reorganized Company~~’s receivable~~ ~~from~~for the ~~CEO~~three months inended ~~July~~March ~~2005~~31, 2004. These amounts are presented by caption in the table below and are captioned “Pro Forma Results.”

~~Amortization~~The primary impacts of ~~Intangible~~fresh ~~Assets.~~start ~~Amortization~~reporting on operating income was that it caused a decline in depreciation expense ~~increased~~due to ~~$248~~the asset write-downs recorded in conjunction with fresh start reporting and an increase in amortization expense due to the ~~second~~fresh ~~quarter~~start adjustment of identifiable ~~fiscal~~intangible ~~2005~~assets. ~~from~~Depreciation expense totaled $893,419 infor the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~March 31, 2005 and $4,468 for the nine months ended March 31, 2004. ~~The~~Amortization ~~increase~~expense was ~~due~~$735 tofor the nine ~~amortization~~months ofended ~~identifiable~~March 31, ~~intangibles~~2005 ~~established~~and in$404 ~~accordance~~for ~~with~~the nine months ended March 31, 2004. Also, cost of sales in the ~~provisions~~third quarter of fiscal 2004 included an additional amount of $1,500 above the Company’s normal manufacturing cost. In accordance with “fresh-start” accounting principles, inventory as of December 31, 2003, was recorded at fair value, which amount approximated $1,500 above manufacturing cost in the Company’s condensed consolidated balance sheet as of December 31, 2003.

~~Income~~The ~~from~~Company’s ~~Operations.~~subsidiaries Ashave afiscal ~~result~~years ofthat end on the ~~items~~Sunday ~~noted~~closest ~~above,~~to ~~the~~June 30 ~~Company~~and fiscal ~~realized~~quarters ~~income~~that ~~from operations~~end inon the ~~second~~Sunday closest to the respective calendar quarter end. The first nine months of fiscal 2005 consisted of ~~$5,415~~40 weeks as compared to ~~income~~the ~~from~~first ~~operations~~nine months of fiscal $32004 that consisted of 39 weeks. As a result,~~569~~ an increase of approximately 2.5% in sales and costs and expenses resulted from the ~~year~~additional ~~ago~~week ~~period~~in the first nine months of fiscal 2005 compared to the first nine months of fiscal 2004.

~~Interest~~The ~~Expense.~~following ~~Interest~~table ~~expense~~sets ~~decreased to $3~~forth,~~469~~ inas ~~the~~a ~~second~~percentage ~~quarter~~ of ~~fiscal~~net ~~2005 from $4~~sales,~~039~~ incertain ~~the~~items ~~second quarter of fiscal 2004. Interest expense~~ in the ~~second quarter of fiscal 2004 included $1,302 of amortization and write-off of deferred loan costs related to the~~ Company’s ~~Debtor-in-Possession~~Condensed ~~Bank~~Consolidated ~~Facility~~Statements ~~and Old Senior Notes. Amortization~~ of ~~deferred~~Operations ~~loan~~for ~~costs totaled $47 in~~ the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~March 31, 2005. ~~The~~and ~~remainder of the difference in interest~~2004: ~~expense is primarily due to the increase in the interest rate on the Company’s New Senior Notes to~~ ~~11% from 8% for the Old Senior Notes.~~

Income (Loss) from Investments. The income from investments in the second quarter of fiscal 2005 of $3 represents the equity income from the Company’s 40% ownership of Aldrich-APL LLC, a manufacturer and distributor of ultra-pure inorganics and metals for high-technology applications. The loss from investments in the second quarter of fiscal 2004 of $(13) represents the equity loss from the Company’s investment in Fiberstars, Inc., a marketer and distributor of fiber optic lighting products. The Final Plan provided that the holders of the Predecessor Company’s Common Stock (other than Saratoga Lighting and the Predecessor Company’s CEO) receive the benefit of certain equity investments held by the Predecessor in Fiberstars. As a result, no further equity income or loss related to this investment has been recorded subsequent to December 31, 2003.


	Reorganized Company				Pro Forma Results
	Nine Months Ended				Nine Months Ended
	March 31, 2005				March 31, 2004
Net sales	$	119,972	100.0	%	$	107,454	100.0	%

Costs and expenses:
Cost of sales		71,278	59.4			65,836	61.3
Marketing and selling		17,967	15.0			17,040	15.8
Research and development		4,598	3.8			4,602	4.3
General and administrative		11,360	9.5			10,825	10.1
Amortization of intangible assets		735	0.6			404	0.4

Income from operations		14,034	11.7			8,747	8.1

~~Gain~~Net ~~on Restructuring~~Sales. ~~The~~Net ~~gain~~sales onincreased ~~restructuring~~11.6% to $119,972 in ~~fiscal~~the ~~2004~~first ~~included~~nine amonths ~~net~~of ~~increase~~fiscal 2005 from $107,454 in the ~~receivable~~ ~~from~~first ~~officer~~nine months of $1fiscal 2004,~~169~~ ~~related~~due in part to the ~~settlement~~additional ~~approved~~week byduring the first ~~bankruptcy~~nine ~~court~~months of fiscal 2005. ~~The gain~~Metal onhalide ~~restructuring~~product ~~also~~sales ~~includes~~for the ~~impact~~first nine months of ~~the~~fiscal 2005 ~~implementation~~increased of16% ~~the~~to ~~Plan~~$94,646 ~~approved~~compared bywith $81,872 in the same period last year. This increase in ~~court~~metal halide product sales was primarily the result of an increase in lamp and amaterial ~~settlement~~sales. Non-metal ~~with~~halide GElighting ~~related~~product tosales ~~amounts~~decreased ~~owed~~17% over the year ago period due primarily to ~~and~~a decrease ~~receivable~~in ~~from~~power GEsupply sales.

~~Write-off~~Total oflighting ~~Deferred~~product ~~Loan~~sales ~~Costs~~inside the U.S. ~~The~~increased ~~write-off~~12% ofin ~~deferred~~the ~~loan~~first ~~costs~~nine months of ~~$2,251~~fiscal ~~represented~~2005 as compared to the ~~write-off~~ ofsame ~~deferred~~period ~~loan~~a ~~costs~~year ~~related~~ago primarily due to an increase in lamp and power supply sales. Total lighting product sales outside the ~~$100,000~~U.S. 8increased 9% ~~Senior~~as ~~Notes~~compared into ~~accordance~~the ~~with~~year ago ~~Emerging~~period ~~Issues~~due ~~Task~~primarily ~~Force~~to ~~Issue~~increases ~~No.~~in ~~(“EITF”)~~lamp ~~96-19,~~and ~~Debtor’s~~material ~~Accounting~~sales ~~for~~and aan ~~Modification~~increase ~~or Exchange~~in offoreign ~~Debt~~currency exchange ~~Instruments~~rates.

~~Reorganization Expenses. Reorganization expenses, totaling $5,635 in the second quarter of fiscal~~15 ~~2004, reflected the cost of consultants, investment bankers and attorneys related to the Company’s efforts to reorganize under Chapter 11 Bankruptcy.~~

~~Income~~Cost ~~(Loss)~~of ~~before~~Sales. ~~Income~~Cost ~~Taxes~~of ~~and~~sales ~~Minority~~increased ~~Interest~~8.3% ~~The~~to ~~Company~~$71,278 ~~had~~in ~~income~~the ~~before~~first ~~income~~nine months of fiscal 2005 ~~taxes~~from ~~and~~$65,836 ~~minority~~in ~~interest~~the first nine months of fiscal 2004, due in part to the additional week during the first nine months of fiscal 2005. As noted above, in accordance with “fresh-start” accounting principles, inventory as of December 31, 2003, was recorded at fair value, which amount approximated $21,~~053~~500 above manufacturing cost in the ~~second~~Company’s condensed consolidated balance sheet as of December 31, 2003. This additional amount reduced reported gross margin and net profit in the third quarter of fiscal ~~2005~~2004 as ~~compared~~the toinventory was sold. As a ~~loss~~percentage of net sales, cost of ~~before~~sales ~~income~~was ~~taxes~~59.4% ~~and~~for ~~minority~~the ~~interest~~first nine months of fiscal 2005. This compares with cost of sales of 61.3% for the first nine months of fiscal 2004, including the $(71,~~080)~~500 described above. The additional $1,500 represented 1.4% of sales in the ~~second~~first ~~quarter~~nine months of fiscal 2004.

~~Income~~Cost ~~Tax~~of ~~Expense.~~sales ~~Income tax~~ expense was ~~$259~~positively ~~for~~impacted by the ~~second~~continuing ~~quarter~~transfer of ~~fiscal~~lamp ~~2005~~and aspower ~~compared~~supply production to ~~$272~~India, improvements in cost management, an improvement in the ~~second~~product ~~quarter~~mix (stronger growth in lamp and material sales than in power supply sales), and a reduction in depreciation expense of ~~fiscal~~$637 ~~2004~~related primarily to the effects of the application of fresh-start accounting principles at December 31, 2003. ~~The~~Cost ~~income~~of ~~tax~~sales expense was negatively impacted by increases in ~~both~~the cost ~~quarters~~of ~~related~~copper and steel used in the production of power supplies as compared to the year ago ~~certain~~period and additional costs due to its previously announced transition of the Company’s ~~foreign~~North American ~~operations~~power supply manufacturing operation to Chennai, India. While this transition will result in higher costs during the last half of fiscal 2005, the Company believes that the lower cost of production in India will benefit the Company in fiscal 2006 and beyond.

14Marketing and Selling Expenses. Marketing and selling expenses increased 5.4% to $17,967 in the first nine months of fiscal 2005 from $17,040 in the first nine months of fiscal 2004. As a percentage of net sales, marketing and selling expenses decreased to 15.0% in the first nine months of fiscal 2005 from 15.8% in the first nine months of fiscal 2004. The decrease as a percentage of sales resulted from the significant increase in sales that occurred while marketing and selling expenses grew at a slower rate.

~~Table~~Research and Development Expenses. Research and development expenses remained consistent at $4,598 in the first nine months of ~~Contents~~fiscal 2005 as compared to $4,602 in the first nine months of fiscal 2004. Research and development expenses incurred related to: (i) expansion of the product line and continued improvement in lamp technology including the line of Uni-Form® pulse start lamps (with improved energy efficiency, quicker starting and restarting and a more compact arc source, which improves the light and reduces material costs) (ii) continual development of new materials for the world’s major lighting manufacturers; (iii) development and testing of electronic and electromagnetic power supply systems; and, (iv) improvement of coating processes of optical thin-films to broaden the applications and development of new thin-film materials, and using coatings to develop improvements to lighting technologies. The Company expects to continue to make substantial expenditures on research and development to enhance its position as the leading innovator in the metal halide lighting industry.

AtGeneral ~~June 30,~~and ~~2004,~~Administrative ~~the~~Expenses. ~~Company~~General ~~had~~and ~~net~~administrative ~~operating~~expenses ~~loss~~increased ~~carryforwards~~4.9% ofto $~~130~~11,~~833 available to reduce~~360 ~~future~~in ~~United~~the ~~States~~first ~~federal~~nine ~~taxable~~months ~~income,~~of ~~which~~fiscal ~~expire~~2005 ~~2008~~as ~~through~~compared ~~2024.~~to ~~On August 15~~$10,825 ~~2003, Saratoga~~in ~~purchased~~ the ~~preferred~~first ~~and~~nine ~~common~~months ~~shares~~of ~~owned by GE~~fiscal 2004. ~~This~~The ~~transaction~~increase ~~caused~~in ~~an ownership~~general ~~change~~and ~~greater~~administrative ~~than~~expenses ~~50%~~was ~~which~~primarily ~~will~~due ~~limit~~to ~~the~~an ~~annual~~increase ~~net~~in ~~operating loss~~ the ~~Company can~~ ~~use~~CEO toretention ~~offset~~bonus ~~any~~expense ~~future~~of ~~taxable~~$507 ~~income~~(A ~~pursuant~~total ~~to Section 382~~ of ~~the~~$2,027 ~~Internal~~is ~~Revenue~~being ~~Code.~~accrued ~~This limitation~~ratably isover ~~effective~~the ~~with~~twelve months ~~the~~ended fiscal ~~year~~2005, ~~ended~~while ~~June 30~~$2,027 ~~2004.~~was ~~The~~accrued ~~Company~~over ~~also~~the ~~has~~last asix ~~capital loss~~months ~~carryforward~~ of ~~$40,117~~fiscal ~~available~~2004). toThe after-tax ~~reduce~~amount ~~future~~of ~~capital~~the ~~gains.~~fiscal ~~The~~2005 ~~usage~~CEO ofretention ~~this carryforward~~bonus, ~~will~~approximately ~~also~~$1,147, beis ~~limited~~scheduled asto abe applied ~~result~~against of the ~~ownership~~Company’s ~~change.~~receivable ~~This~~from ~~carryforward~~the ~~expires~~ CEO in ~~2007~~July 2005.

~~The Company also had research and development credit carryforwards of approximately $3,818~~16 available at June 30, 2004, which expire 2008 through 2020. Additionally, in conjunction with the Alternative Minimum Tax (“AMT”) rules, the Company had available AMT credit carryforwards for tax purposes of approximately $98, which may be used indefinitely to reduce regular federal income taxes. The usage of these credits will also be limited as a result of the ownership change.

~~Also,~~Amortization atof ~~June 30,~~Intangible ~~2004,~~Assets. ~~the~~Amortization ~~Company~~expense ~~had~~increased ~~foreign~~to ~~net~~$735 ~~operating~~in ~~loss~~the ~~carryforwards~~first ~~for~~nine ~~tax purposes~~months ~~totaling~~of fiscal 2005 from $~~1,163~~404 ~~that~~in ~~expire~~the ~~2006~~first nine months of fiscal 2004. The increase was due to ~~2007~~the amortization ~~and~~of $9identifiable intangibles established at December 31,~~395~~ ~~that~~2003 ~~have~~in noaccordance ~~expiration~~with ~~dates~~the provisions of fresh-start accounting.

15Income from Operations. As a result of the items noted above, the Company realized income from operations in the first nine months of fiscal 2005 of $14,034 as compared to pro forma income from operations of $8,747 in the year ago period.

~~Table~~Liquidity ofand ~~Contents~~Capital Resources

The Company’s ~~subsidiaries~~sources ~~have~~of ~~fiscal~~liquidity ~~years~~include ~~that~~cash ~~end~~and oncash ~~the~~equivalents, ~~Sunday~~cash ~~closest~~flow tofrom ~~June 30~~operations and ~~fiscal~~ ~~quarters~~amounts ~~that~~available ~~end~~under onits ~~the~~Bank ~~Sunday~~Credit ~~closest~~Facility. toThe ~~the~~Company ~~respective~~believes ~~calendar~~these ~~quarter~~sources ~~end.~~of ~~The first six~~liquidity ~~months~~are ofsufficient ~~fiscal~~for ~~2005~~at ~~consisted~~least ofthe ~~27 weeks~~next asseveral ~~compared~~years. toAs ~~the~~a ~~first~~result ~~six~~of ~~months~~the exchange of ~~fiscal~~the ~~2004~~$100,000 ~~that~~8% ~~consisted~~Senior ofNotes 26due March ~~weeks.~~2008 Asfor ~~a result~~$114,400 an11% ~~increase~~Senior ofNotes ~~approximately~~due 4%March 2009, inthe ~~sales~~Company ~~and~~has ~~costs and~~extended ~~expenses~~the ~~resulted~~maturity ~~from~~of ~~the~~most ~~additional~~of ~~week~~its indebt ~~the~~until ~~first~~2009. ~~six~~The ~~months~~Company ofbelieves ~~fiscal~~that ~~2005~~its ~~compared~~cash toflow ~~the~~from ~~first~~operations ~~six~~will ~~months~~be ofmore ~~fiscal~~than ~~2004.~~adequate ~~The~~to ~~three~~service ~~month~~the ~~periods~~debt, ~~ended~~prior ~~December 31,~~to ~~2004~~the ~~and~~maturity ~~2003 contained~~of ~~13 weeks~~the ~~each~~11% Senior Notes.

The ~~following~~Bank ~~table~~Credit ~~sets~~Facility ~~forth~~is a $30,000 asfacility that consists of a ~~percentage~~term loan that requires monthly principal payments of ~~net~~$183 ~~sales~~($8,250 ~~certain~~outstanding ~~items~~at inMarch 31, ~~the~~2005) ~~Company’s~~with a revolving credit loan, ~~Condensed~~subject ~~Consolidated~~to ~~Statements~~availability, making up the remainder of ~~Operations~~the ~~for~~facility. The amount outstanding under the revolving ~~six~~credit ~~months~~loan ~~ended~~was ~~December~~$6,372 at March 31, ~~2004~~2005. ~~and~~Interest rates on the revolving credit loan ~~2003:~~are based on Libor plus 2.75% or Prime plus .75% (6.50% at March 31, 2005). Interest rates on the term loan are based on Libor plus 3.50% or Prime plus 1.50% (7.25% at March 31, 2005). The final maturity of the revolving credit facility and the term loan is December 10, 2008.

	Reorganized Company					Predecessor Company
	Six Months Ended					Six Months Ended
	December 31, 2004					December 31, 2003
Net sales	$	79,700		100.0	%	$	70,510		100.0	%
Costs and expenses:
Cost of sales		46,943		58.9			43,361		61.5
Marketing and selling		11,842		14.9			11,311		16.0
Research and development		3,112		3.9			3,095		4.4
General and administrative		7,474		9.4			6,208		8.8
Amortization of intangible assets		489		0.6			177		0.3
Income from operations		9,840		12.3			6,358		9.0
Other income (expense):
Interest expense		(6,892	)	(8.6	)		(7,459	)	(10.6	)
Interest income		197		0.3			188		0.3
Income from investments		489		0.6			3		—
Gain on restructuring		—		—			1,184		1.7
Write-off of deferred loan costs		—		—			(2,251	)	(3.2	)
Reorganization expenses		—		—			(11,258	)	(16.0	)
Income (loss) before income taxes and minority interest		3,634		4.6			(13,235	)	(18.8	)
Income tax expense		632		0.8			360		0.5
Income (loss) before minority interest		3,002		3.8			(13,595	)	(19.3	)
Minority interest in income of consolidated subsidiary		(339	)	(0.5	)		(251	)	(0.3	)
Net income (loss)	$	2,663		3.3	%	$	(13,846	)	(19.6	)%

The Bank Credit Facility contains certain affirmative and negative covenants customary for this type of agreement, prohibits cash dividends, and includes financial covenants related to Minimum Adjusted EBITDA and Capital Expenditures. At March 31, 2005, the Company was in compliance with the terms of the Bank Credit Facility. The principal security for the Bank Credit Facility is substantially all of the personal property of the Company and each of its North American and United Kingdom subsidiaries. The term loan is secured by substantially all of the Company’s machinery and equipment in North America and the United Kingdom as well as the Company’s facility in Urbana, Illinois, and is cross-collateralized and secured with the revolving credit loan.

~~Net~~Cash ~~Sales.~~decreased ~~Net sales increased 13.0% to~~ $792,~~700~~218 induring the ~~first~~nine ~~six~~ months ofended ~~fiscal 2005 from $70~~March 31,~~510~~ ~~in the first six months of fiscal 2004~~2005. ~~Approximately~~Cash ~~one-third~~used ~~of this increase was due to the Company’s subsidiaries having an additional week~~ in ~~the first six months of fiscal 2005 as~~operating ~~compared~~activities tototaled ~~the first six months of fiscal 2004. Metal halide product sales for the first six months of fiscal 2005 increased 18% to~~ $611,~~967 compared with $52~~353,~~435~~ incash ~~the~~used ~~same period last year. This increase~~ in ~~metal~~investing ~~halide~~activities ~~product sales~~totaled ~~is partly due to the additional week in the quarter~~$3,685, ~~but was primarily the result of an increase in lamp~~ and ~~material~~cash ~~sales.~~provided ~~Sales of APL materials increased 9% over the same period a~~by ~~year~~financing ~~ago,~~activities atotaled ~~portion of which was due to the additional week. Geographically~~$2, ~~these materials sales decreased 6% in the U~~820.~~S. and increased 18% outside the U.S. Non-metal halide lighting product sales~~ ~~decreased 23% over the year ago period due primarily to a decrease in power supply sales.~~

16Net Cash Provided by (Used in) Operating Activities. Net cash used in operating activities totaled $1,353 for the nine months ended March 31, 2005. This reflects the $12,584 payment of both semi-annual interest payments related to the Company’s Senior Notes due March 31 and September 30. It also reflects the impact of one-time payments of reorganization expenses totaling $1,842 and pre-petition liabilities of $371 related to the Company’s emergence from Chapter 11 Bankruptcy, which have now been fully paid. Finally, net cash used in operating activities reflects an increase in inventory of $5,671. A portion of the increase in inventory is expected to be a permanent increase due to the longer supply chain which results from the continuing shift of production to India, but a portion also resulted from a temporary increase in safety stocks to minimize the risk of supply disruptions during the repositioning of

~~Table of Contents~~17

~~Total~~manufacturing ~~lighting~~to ~~product sales inside the U~~India.S. ~~increased~~The ~~11%~~Company inexpects that the ~~first~~safety ~~six~~stock ~~months~~inventory oflevels ~~fiscal~~will ~~2005~~be reduced aswhen ~~compared to~~ the ~~same~~transfer ~~period~~of apower ~~year~~supply ~~ago~~production ~~due~~from toNorth ~~the~~America ~~additional week and~~ to aIndia ~~19%~~is ~~increase~~completed. ~~in lamp~~The ~~sales~~Company ~~offset~~does bynot abelieve ~~decrease~~any infurther ~~U.S.~~increase ~~materials~~in ~~sales.~~inventory ~~Total~~levels ~~lighting~~will ~~product~~be ~~sales~~required ~~outside the U.S. increased 9%~~ as ~~compared~~reductions ~~to the year ago period due to the additional week and to increases~~ in ~~lamp~~ ~~and~~safety ~~material~~stock ~~sales~~requirements offset byany ~~non-metal~~future ~~halide~~growth ~~power~~in ~~supply~~inventories ~~sales~~associated with expanding revenues.

~~Pricing~~Net Cash Used in Investing Activities. In the ~~metal~~nine ~~halide~~months ~~lighting~~ended ~~business~~March 31, is2005, ~~competitive~~net cash used in investing activities totaled $3,685, ~~and~~including ~~prices~~$4,135 related to capital expenditures for plant and equipment, the majority of which relates to machinery and equipment. The capital expenditures in fiscal 2005 also include a building purchase of $1,232 in Chennai, India, that will house the Company’s ~~products~~power supply manufacturing operation. The Company will move these operations from its ~~have~~existing ~~remained~~lamp ~~flat~~manufacturing orfacility ~~declined~~resulting ~~slightly~~in additional capacity for the Company’s lamp manufacturing operations. The ~~introduction~~Company’s ofcapital ~~new~~expenditure ~~products~~program ~~has~~is ~~helped~~expected to ~~stabilize~~approximate between $5,000 and $6,000 in fiscal 2005. Future capital expenditures beyond this level will be discretionary, as the Company’s ~~product~~presently ~~pricing~~has sufficient operating capacities to support several years of sales growth at its historical rates.

~~Cost~~Net ofCash ~~Sales.~~Provided ~~Cost~~by ofFinancing ~~sales increased 8~~Activities.3% toIn ~~$46,943 in~~ the ~~first~~nine ~~six~~ months ofended ~~fiscal~~March 31, 2005 ~~from $43~~,~~361~~ innet ~~the~~cash provided ~~first~~by ~~six~~financing ~~months~~activities ofwas ~~fiscal 2004~~$2,820 ~~due~~resulting infrom ~~part~~an toincrease ~~the~~in ~~additional~~borrowings ~~week~~on ~~during~~ the ~~first~~ ~~six~~Company’s ~~months~~revolving ofcredit ~~fiscal~~loan ~~2005. As a percentage~~ of ~~net sales~~$6,372, ~~cost~~net of ~~sales~~$3,552 ~~decreased to 58.9% in the first six months~~ of ~~fiscal~~scheduled ~~2005~~payments ~~from 61.5% in the first six months~~ of ~~fiscal~~long-term ~~2004. The reduction in~~debt ~~cost~~that ofincluded ~~sales as a percentage of sales is due to~~ the ~~transfer~~one-time ofpayment lamp and power supply production to India, improvements in cost management, an improvement in the product mix (more lamp and material sales and less power supply sales), and a reduction in depreciation expense of $1,~~008 related~~402 ~~primarily~~ to ~~the~~Rohm ~~effects~~and ofHaas ~~the~~Company ~~application~~related ofto ~~fresh-start~~a ~~accounting~~promissory ~~principles~~note obligation.

~~Marketing~~The ~~and~~interest-bearing ~~Selling~~obligations ~~Expenses.~~of ~~Marketing~~the ~~and~~Company ~~selling~~totaled ~~expenses increased 4.7% to~~ $11133,~~842~~683 inas ~~the first six months~~ of ~~fiscal~~March 31, 2005 ~~from $11~~,~~311~~ inand consisted ~~the first six months~~ of: ~~fiscal 2004~~$14,622 ~~due~~outstanding ~~primarily to~~under the ~~additional~~Bank ~~week~~Credit ~~during~~Facility; ~~the~~$114,400 ~~first six months~~ of ~~fiscal~~11% ~~2005.~~Senior AsNotes; mortgages ~~a percentage~~ of ~~net sales~~$4, ~~marketing~~371; and ~~selling~~obligations ~~expenses decreased to 14.9% in the first six months~~ of ~~fiscal~~foreign ~~2005~~subsidiaries ~~from~~and ~~16.0% in~~other ~~the~~debt ~~first six months~~ of ~~fiscal 2004~~$290. ~~The decrease resulted from the significant increase in~~ ~~sales that occurred while marketing and selling expenses were held relatively constant.~~

~~Research~~Critical ~~and~~Accounting ~~Development Expenses. Research and development expenses increased 0.5% in the first~~Policies ~~six months of fiscal 2005 to $3,112 from $3,095 in the first six months of fiscal 2004, due to the~~ ~~additional week during the fiscal 2005 quarter. Research and development expenses incurred related~~ to: (i) expansion of the product line and continued improvement in lamp technology including the line of Uni-Form® pulse start lamps (with improved energy efficiency, quicker starting and restarting and a more compact arc source, which improves the light and reduces material costs) intended to replace many first generation metal halide lamps in industrial and commercial applications; (ii) continual development of new materials for the world’s major lighting manufacturers; (iii) development and testing of electronic and electromagnetic power supply systems; and, (iv) improvement of coating processes of optical thin-films to broaden the applications and development of new thin-film materials, and using coatings to develop improvements to lighting technologies. The Company expects to continue to make substantial expenditures on research and development to enhance its position as the leading innovator in the metal halide lighting industry.

~~General~~The discussion and ~~Administrative~~analysis ~~Expenses.~~of ~~General~~our financial condition and ~~administrative~~results ~~expenses~~of ~~increased~~operations ~~20.4%~~is tobased $7upon our consolidated financial statements,~~474~~ which have been prepared in accordance with accounting principles generally accepted in the ~~first~~United ~~six~~States ~~months~~of America. The preparation of ~~fiscal~~these ~~2005~~financial statements ~~from~~requires ~~$6,208~~us into ~~the~~make ~~first~~estimates ~~six~~and ~~months~~judgments ofthat ~~fiscal~~effect ~~2004.~~the ~~The~~reported amounts of our ~~increase~~assets, inliabilities, ~~general~~revenues and ~~administrative~~costs and expenses, ~~was~~and ~~due~~related todisclosure of contingent assets and liabilities. On an ~~increase~~on-going inbasis, ~~bonus~~we ~~expense~~evaluate ofour $1estimates,~~571,~~ including $1those related to: valuation of accounts and notes receivable and loan receivable from officer,~~014~~ ~~for~~valuation ~~the~~of investments, ~~CEO~~valuation ~~retention~~of ~~bonus~~long-lived assets, ~~offset~~valuation byof ~~reductions~~inventory invaluation ~~corporate~~reserves, ~~overhead~~revenue recognition, ~~costs.~~and ~~The~~deferred ~~after-~~tax assets. We base our estimates on historical experience and on ~~amount~~various ofother ~~the~~assumptions ~~CEO~~that ~~retention~~we ~~bonus,~~believe ~~approximately~~reasonable ~~$572~~under the circumstances, isthe ~~scheduled~~results toof bewhich form ~~applied~~the ~~against~~basis for making judgments about the carrying value of assets and liabilities that are not ~~Company’s~~readily ~~receivable~~apparent from ~~the~~other ~~CEO~~sources. inActual ~~July 2005~~results may differ from these estimates under different assumptions or conditions.

17We have identified the following policies as critical to our business operations and the understanding of our results of operations. For a detailed discussion on the application of these and other accounting policies, see Note C of the “Notes to Consolidated Financial Statements” in the Annual Report on Form 10-K for the Period Ended June 30, 2004.

~~Table~~Valuation of ~~Contents~~Accounts and Notes Receivable and Loan Receivable from Officer

~~Amortization~~Management ofevaluates ~~Intangible~~and ~~Assets.~~makes ~~Amortization~~estimates ~~expense~~of ~~increased to $489 in~~ the ~~first~~collectibility ~~six months~~ of ~~fiscal 2005 from $177 in~~ the ~~first~~Company’s ~~six~~accounts ~~months~~and ofnotes receivable, ~~fiscal~~including ~~2004.~~unbilled ~~The~~accounts ~~increase~~receivable ~~was~~related ~~due~~ to ~~the amortization~~long-term ofequipment ~~identifiable~~contracts, ~~intangibles established in accordance with the provisions of~~based ~~fresh-start~~on ~~accounting.~~a

~~Income from Operations. As a result of the items noted above, the Company realized income from~~18 ~~operations in the first six months of fiscal 2005 of $9,840 as compared to income from operations of $6,358 in the year ago period.~~

~~Interest~~combination ~~Expense~~of factors. ~~Interest~~Management ~~expense~~analyzes ~~decreased~~historical tobad $6debts,~~892~~ customer credit-worthiness, and current economic trends in evaluating the ~~first~~adequacy ~~six~~of ~~months~~the ofallowance ~~fiscal~~for ~~2005~~doubtful ~~from~~accounts and ~~$7,459~~whether inthere ~~the~~is ~~first~~any ~~six~~impairment ~~months~~in ofits ~~fiscal~~notes ~~2004~~receivable. ~~Interest~~In ~~expense~~circumstances inwhere the ~~first~~Company ~~six~~is aware ~~months~~ of ~~fiscal 2004~~a ~~included~~certain ~~$1,993~~customer’s ofinability ~~amortization~~to ~~and~~meet ~~write-off~~its offinancial ~~deferred~~obligation, ~~loan~~a ~~costs~~specific ~~related~~reserve is recorded to reduce the ~~Company’s Debtor-in-Possession~~receivable ~~Bank~~to ~~Facility~~the ~~and~~amount ~~Old~~the ~~Senior~~Company ~~Notes.~~believes ~~Amortization~~will ofbe ~~deferred~~collected. ~~loan costs~~Material ~~totaled~~changes ~~$87~~ in the ~~first~~allowance ~~six~~for ~~months~~doubtful ofaccounts ~~fiscal~~may ~~2005.~~occur ~~The~~if ~~remainder~~the results of ~~the~~management’s ~~difference~~evaluation change inor ~~interest expense~~if isa ~~primarily~~different ~~due~~method tois ~~the~~used ~~increase~~to inestimate ~~the~~possible ~~interest~~losses. ~~rate~~The onaccounts ~~the~~receivable balance ~~Company’s~~was ~~New~~$29,958, ~~Senior~~net ~~Notes~~of ~~to 11%~~an ~~from~~allowance 8%of ~~for~~$851 ~~the~~as ~~Old~~of ~~Senior~~March 31, ~~Notes~~2005.

~~Income from Investments.~~ The ~~income~~Company ~~from~~also ~~investments~~has ina ~~the~~loan ~~first~~and ~~six~~interest ~~months~~receivable of ~~fiscal 2005 of~~ $~~489~~2,914 ~~represents $169 in equity income~~ from the ~~Company’s~~Chief ~~40%~~Executive ~~ownership~~Officer. The ofloan ~~Aldrich-APL~~documents ~~LLC,~~require ~~a manufacturer~~that ~~and~~the ~~distributor~~after-tax proceeds of ~~ultra-pure~~bonuses ~~inorganics~~payable ~~and~~to ~~metals~~the ~~for~~CEO ~~high-technology~~be ~~applications~~applied ~~and~~against ~~a gain on~~ the ~~sale~~loan ofand ~~an investment of $320~~interest. ~~The~~In ~~income from investments in~~ the ~~first~~second ~~six months~~quarter of fiscal ~~2004~~2005, ofthe $3Company ~~represents~~applied the after-tax ~~equity~~proceeds ~~income~~of ~~from~~ the ~~Company’s~~CEO ~~investment~~retention ~~in Fiberstars, Inc., a marketer~~ and ~~distributor~~performance bonuses of ~~fiber~~$1,314 ~~optic~~to ~~lighting~~the ~~products~~balance outstanding. ~~The~~Management ~~Final~~periodically ~~Plan provided~~evaluates ~~that~~ the ~~holders~~adequacy of the ~~Predecessor~~underlying ~~Company’s~~assets ~~Common~~to ~~Stock~~repay ~~(other than Saratoga Lighting~~this ~~and~~loan. ~~the~~The ~~Predecessor~~ Company’s ~~CEO)~~believes ~~receive~~ the ~~benefit~~loan ofreceivable ~~certain~~amount ~~equity~~will ~~investments~~be ~~held~~realized ~~by the Predecessor~~ in ~~Fiberstars.~~accordance Aswith ~~a result, no further equity income or loss related to this~~the ~~investment~~terms ~~has~~of ~~been~~loan ~~recorded subsequent to December 31, 2003~~documents.

~~Gain~~Inventory onValuation ~~Restructuring. The gain on restructuring in fiscal 2004 included a net increase in the~~Reserves ~~receivable from officer of $1,169 related to the settlement approved by the bankruptcy court. The~~ ~~gain on restructuring also includes the impact of the implementation of the Plan approved by the~~ ~~court and a settlement with GE related to amounts owed to and receivable from GE.~~

~~Write-off~~The Company values its inventory for accounting purposes at the lower of ~~Deferred~~cost ~~Loan~~(first-in, ~~Costs~~first-out method) or market. ~~The~~In ~~write-off~~circumstances ofwhere ~~deferred~~the ~~loan~~Company ~~costs~~is aware of ~~$2,251~~a ~~represented~~problem in the ~~write-off~~ valuation of ~~deferred~~a certain ~~loan~~item, ~~costs~~a ~~related~~specific reserve is recorded to reduce the ~~$100~~item to its net realizable value. For all other inventory,~~000~~ 8%the ~~Senior~~Company ~~Notes~~records ina ~~accordance~~reserve ~~with~~based on a combination of factors, including ~~Emerging~~actual ~~Issues~~usage ~~Task~~in ~~Force~~recent ~~Issue~~history Noand projected usage in the future. ~~(“EITF”)~~If 96expected circumstances should change due to general economic or product obsolescence issues resulting in lower-19than-expected usage, ~~Debtor~~management’s ~~Accounting~~estimate ~~for~~of athe ~~Modification~~net ~~or Exchange~~realizable ofvalue ~~Debt~~could ~~Instruments~~be reduced by a material amount.

~~Reorganization~~Valuation ~~Expenses. Reorganization expenses, totaling $11,258 in the first six months~~ of ~~fiscal~~ ~~2004,~~Long-Lived ~~reflected the cost of consultants, investment bankers and attorneys related to the~~Assets ~~Company’s efforts to reorganize under Chapter 11 Bankruptcy.~~

~~Income~~The ~~(Loss)~~Company’s ~~before~~emergence ~~Income~~from ~~Taxes~~Chapter 11 bankruptcy proceedings resulted in a new reporting entity and ~~Minority~~adoption ~~Interest~~of fresh start reporting in accordance with SOP No. 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code. The Company’s ~~had~~tangible ~~income~~assets ~~before~~were ~~income~~adjusted ~~taxes~~in ~~and~~accordance ~~minority~~with ~~interest~~SOP 90-7 which resulted in a decrease in the Company’s real estate of $311,~~634~~644 and a decrease in ~~the~~personal ~~first~~property ~~six~~(machinery ~~months~~and equipment and furniture and fixtures) of $28,790. ~~fiscal~~The ~~2005~~Company’s asidentifiable ~~compared~~intangible assets were adjusted to a$24,675 ~~loss~~representing ~~before~~customer ~~income~~contracts ~~taxes~~ and ~~minority~~relationships ~~interest~~ of $~~(13~~10,~~235)~~000, intrademarks ~~the~~and ~~first~~tradenames ~~six~~of ~~months~~$8,635, and technology of ~~fiscal 2004~~$6,040.

~~Income~~In ~~Tax~~addition ~~Expense~~to the above, the application of SOP 90-7 and SEC Staff Accounting Bulletin No. 54, Push ~~Income~~Down ~~tax~~Basis ~~expense~~of ~~was~~Accounting ~~$632~~Required ~~for~~in Certain Limited Circumstances, resulted in the elimination ~~first~~of ~~six~~the ~~months~~existing goodwill and the establishment of ~~fiscal~~a ~~2005~~new ~~as compared~~amount toof goodwill of $~~360~~50,561, that represents the “reorganization value in excess of amounts allocable to identifiable assets.” In accordance with the ~~first~~provisions ~~six~~of ~~months~~Statement of Financial Accounting Standards (“FAS”) No. 142, Goodwill and Other Intangible Assets, no amortization of goodwill was recorded in fiscal 2003 or fiscal 2004. ~~The~~Additionally, ~~income~~the ~~tax~~newly-established ~~expense~~goodwill inwill ~~both~~not ~~periods~~be amortized. Rather, the ~~related~~Company towill ~~certain~~evaluate ofthis asset for impairment at least annually and whenever there is an impairment indicator using the ~~Company’s~~fair ~~foreign~~value ~~operations~~guidelines of FAS No. 142.

18The Company evaluates the carrying value of its investment in other long-lived assets for impairment such as property, plant and equipment whenever there is an impairment indicator, generally using an undiscounted cash flow methodology.

~~Table of Contents~~19

~~Liquidity~~Revenue ~~and Capital Resources~~Recognition

The Company’s ~~sources~~has ofentered ~~liquidity~~into ~~include~~certain ~~cash~~contracts ~~and~~with ~~cash~~customers ~~equivalents,~~for ~~cash~~the ~~flow~~construction ~~from~~of ~~operations~~lighting and ~~amounts~~thin-film ~~available~~coating ~~under~~equipment. ~~its~~The ~~Bank~~Company ~~Credit~~also ~~Facility.~~has ~~The~~certain ~~Company~~contracts ~~believes~~related ~~these~~to ~~sources~~the further development and application of ~~liquidity are~~lighting ~~sufficient~~and ~~for~~coating attechnologies ~~least~~for the ~~next~~U.S. ~~several years~~government. AsRevenue is arecognized ~~result~~on ofthese contracts as work on the ~~exchange~~contract ofprogresses using the ~~$100~~percentage of completion method of accounting,~~000~~ 8%which relies on estimates of total expected contract revenues and ~~Senior~~costs. ~~Notes~~Under ~~due~~this ~~March 2008~~method ~~for~~reasonable ~~$114,400~~estimates ~~11%~~of ~~Senior~~the ~~Notes~~costs ~~due~~applicable ~~March 2009,~~to the ~~Company~~various ~~has~~stages ~~extended~~of a contract are made, thus, impacting the ~~maturity~~level of ~~most~~recognized revenue. Since the financial reporting of ~~its~~these ~~debt~~contracts ~~until~~depends ~~2009.~~on ~~The~~estimates, ~~Company~~which ~~believes~~are ~~that~~assessed ~~its~~continually ~~cash~~during ~~flow~~the ~~from~~term of the ~~operations~~contract, ~~will~~recognized berevenues ~~more~~and ~~than~~profit ~~adequate~~are subject to ~~service~~revisions as the ~~debt,~~contract ~~prior~~progresses totoward completion. Revisions in profit estimates are reflected in the ~~maturity~~period ofin which the ~~11%~~facts ~~Senior~~that give ~~Notes~~rise to the revision become known. Should estimates indicate a loss is expected to be incurred under a contract, cost of sales is charged with a provision for such loss.

~~The~~Deferred ~~Bank~~Tax ~~Credit~~Assets Facility is a $30,000 facility that consists of a term loan that requires monthly principal payments of $183 ($8,800 outstanding at December 31, 2004) with a revolving credit loan, subject to availability, making up the remainder of the facility. The amount outstanding under the revolving credit loan was $642 at December 31, 2004. Interest rates on the revolving credit loan are based on Libor plus 2.75% or Prime plus .75% (6.00% at December 31, 2004). Interest rates on the term loan are based on Libor plus 3.50% or Prime plus 1.50% (6.75% at December 31, 2004). The final maturity of the revolving credit facility and ~~the~~Valuation ~~term loan is December 10, 2008.~~Allowance

The ~~Bank~~Company ~~Credit~~had ~~Facility~~approximately ~~contains~~$10,379 ~~certain~~of ~~affirmative~~net ~~and~~deferred ~~negative~~tax ~~covenants~~assets ~~customary~~related ~~for~~principally ~~this~~to certain ~~type~~unused tax credits and loss carryforwards as of ~~agreement~~June 30, ~~prohibits~~2004. ~~cash~~The ~~dividends,~~realization ~~and~~of ~~includes~~these ~~financial~~assets ~~covenants~~is based ~~related~~upon the Company generating future taxable income. Due to ~~Minimum~~the Company’s historical results ~~Adjusted~~it ~~EBITDA~~is uncertain as to when it will realize taxable income that will allow it to utilize its tax credits and ~~Capital~~loss ~~Expenditures~~carryforwards and, accordingly, has recorded a valuation allowance of approximately $10,379. AtAdditionally, ~~December~~on August 3115, ~~2004~~2003, Saratoga purchased the ~~Company~~preferred ~~was~~and common inshares ~~compliance~~owned ~~with the~~by ~~terms~~GE. ofThis transaction caused an ownership change greater than 50% which will limit the ~~Bank~~annual ~~Credit~~net ~~Facility.~~operating ~~The~~loss ~~principal~~and ~~security~~tax ~~for~~credit carryforwards the ~~Bank~~Company ~~Credit~~can ~~Facility~~use isto offset any ~~substantially~~future ~~all~~taxable income pursuant to Section 382 of the ~~personal~~Internal ~~property~~Revenue ofCode. This limitation is effective with the fiscal year ended June 30, 2004. The Company ~~and~~has ~~each~~net operating losses which, in accordance with the principles of ~~its~~fresh ~~North~~start ~~American~~accounting, ~~and~~were ~~United Kingdom~~not ~~subsidiaries~~recorded. ~~The~~These ~~term~~net ~~loan~~operating losses isare ~~secured~~available byto ~~substantially~~be ~~all~~utilized, ofand, to the ~~Company’s~~extent ~~machinery~~the ~~and~~net operating losses are utilized, ~~equipment~~goodwill inwill ~~North~~be ~~America~~reduced ~~and~~accordingly for the ~~United~~benefit ~~Kingdom~~received. asManagement ~~well~~will ascontinue to evaluate the realization of these deferred tax assets that are subject to the Company’s ~~facility~~future operations. inThe ~~Urbana,~~Company’s future operations will be influenced by the general business ~~Illinois~~environment, ~~and~~which is ~~cross-collateralized~~difficult ~~and~~to ~~secured~~predict ~~with~~and beyond the ~~revolving~~control ~~credit~~of ~~loan~~the Company.

~~Cash~~Foreign ~~decreased $2,405 during the six months ended December 31, 2004. Cash provided by operating~~Currency ~~activities totaled $1,444, cash used in investing activities totaled $1,613, and cash used in~~ ~~financing activities totaled $2,236.~~

~~Net~~Approximately ~~Cash~~31% ~~Provided~~of bythe ~~Operating~~Company’s ~~Activities.~~net ~~Net~~sales ~~cash~~in ~~provided~~fiscal by2004 ~~operating~~were ~~activities~~denominated ~~totaled $1,444~~in ~~for~~currencies ~~the~~other than ~~six~~U.S. ~~months~~dollars, ~~ended~~principally ~~December 31~~pounds sterling, ~~2004.~~Australian ~~This~~dollars, ~~cash~~Canadian ~~provided~~dollars, byEuros ~~operating~~and Japanese ~~activities~~yen. ~~also reflects~~A ~~the~~significant ~~impact~~weakening of ~~one-time~~such ~~payments~~currencies ofversus ~~reorganization~~the ~~expenses~~U.S. ~~totaling~~dollar ~~$1,842~~could ~~related~~have ~~to the~~a ~~Company’s~~material ~~emergence~~adverse ~~from~~effect ~~Chapter 11~~on ~~Bankruptcy~~the Company.

Net Cash Used in Investing Activities. In the six months ended December 31, 2004, net cash used in investing activities totaled $1,613, including $2,063 related to capital expenditures for plant and equipment, primarily machinery and equipment. The Company’s capital expenditure program is expected to approximate between $5,000 and $6,000 in fiscal 2005. Future capital expenditures beyond this level will be discretionary, as the Company presently has sufficient operating capacities to support several years of sales growth at its historical rates.

Net Cash Used in Financing Activities. In the six months ended December 31, 2004, net cash used in financing activities was $2,236 resulting from an increase in borrowings on the Company’s revolving credit loan of $642, net of $2,878 of scheduled payments of long-term debt that included the one-time payment of $1,402 to Rohm and Haas Company related to a promissory note obligation (see Part II, Item 1. “Legal Proceedings”).

The interest-bearing obligations of the Company totaled $128,627 as of December 31, 2004, and consisted of: $9,442 outstanding under the Bank Credit Facility; $114,400 of 11% Senior Notes; mortgages of $4,400; and obligations of foreign subsidiaries and other debt of $385.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that effect the reported amounts of our assets, liabilities, revenues and costs and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to: valuation of accounts and notes receivable and loan receivable from officer, valuation of investments, valuation of long-lived assets, valuation of inventory valuation reserves, revenue recognition, and deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We have identified the following policies as critical to our business operations and the understanding of our results of operations. For a detailed discussion on the application of these and other accounting policies, see Note C of the “Notes to Consolidated Financial Statements” in the Annual Report on Form 10-K for the Period Ended June 30, 2004.

Valuation of Accounts and Notes Receivable and Loan Receivable from Officer

Management evaluates and makes estimates of the collectibility of the Company’s accounts and notes receivable, including unbilled accounts receivable related to long-term equipment contracts, based on a combination of factors. Management analyzes historical bad debts, customer credit-worthiness, and current economic trends in evaluating the adequacy of the allowance for doubtful accounts and whether there is any impairment in its notes receivable. In circumstances where the Company is aware of a certain customer’s inability to meet its financial obligation, a specific reserve is recorded to reduce the receivable to the amount the Company believes will be collected. Material changes in the allowance for doubtful accounts may occur if the results of management’s evaluation change or if a different method is used to estimate possible losses. The accounts receivable balance was $29,575, net of an allowance of $900, as of December 31, 2004.

The Company also has a loan and interest receivable of $2,871 from the Chief Executive Officer. The loan documents require that the after-tax proceeds of bonuses payable to the CEO be applied against the loan and interest. In the second quarter of fiscal 2005, the Company applied the after-tax proceeds of the CEO retention and performance bonuses of $1,314 to the balance outstanding. Management periodically evaluates the adequacy of the underlying assets to repay this loan. The Company believes the loan receivable amount will be realized in accordance with the terms of loan documents.

Inventory Valuation Reserves

The Company values its inventory for accounting purposes at the lower of cost (first-in, first-out method) or market. In circumstances where the Company is aware of a problem in the valuation of a certain item, a specific reserve is recorded to reduce the item to its net realizable value. For all other inventory, the Company records a reserve based on a combination of factors, including actual usage in recent history and projected usage in the future. If expected circumstances should change due to general economic or product obsolescence issues resulting in lower-than-expected usage, management’s estimate of the net realizable value could be reduced by a material amount.

Valuation of Long-Lived Assets

The Company’s emergence from Chapter 11 bankruptcy proceedings resulted in a new reporting entity and adoption of fresh start reporting in accordance with SOP No. 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code. The Company’s tangible assets were adjusted in accordance with SOP 90-7 which resulted in a decrease in the Company’s real estate of $11,644 and a decrease in personal property (machinery and equipment and furniture and fixtures) of $28,790. The Company’s identifiable intangible assets were adjusted to $24,675 representing customer contracts and relationships of $10,000, trademarks and tradenames of $8,635, and technology of $6,040.

In addition to the above, the application of SOP 90-7 and SEC Staff Accounting Bulletin No. 54, Push Down Basis of Accounting Required in Certain Limited Circumstances, resulted in the elimination of the existing goodwill and the establishment of a new amount of goodwill of $50,561, that represents the “reorganization value in excess of amounts allocable to identifiable assets.” In accordance with the provisions of Statement of Financial Accounting Standards (“FAS”) No. 142, Goodwill and Other Intangible Assets, no amortization of goodwill was recorded in fiscal 2003 or fiscal 2004. Additionally, the newly-established goodwill will not be amortized. Rather, the Company will evaluate this asset for impairment at least annually and whenever there is an impairment indicator using the fair value guidelines of FAS No. 142.

The Company evaluates the carrying value of its investment in other long-lived assets for impairment such as property, plant and equipment whenever there is an impairment indicator, generally using an undiscounted cash flow methodology.

Revenue Recognition

The Company has entered into certain contracts with customers for the construction of lighting and thin-film coating equipment. The Company also has certain contracts related to the further development and application of lighting and coating technologies for the U.S. government. Revenue is recognized on these contracts as work on the contract progresses using the percentage of completion method of accounting, which relies on estimates of total expected contract revenues and costs. Under this method reasonable estimates of the costs applicable to the various stages of a contract are made, thus, impacting the level of recognized revenue. Since the financial reporting of these contracts depends on estimates, which are assessed continually during the term of the contract, recognized revenues and profit are subject to revisions as the contract progresses toward completion. Revisions in profit estimates are reflected in the period in which the facts that give rise to the revision become known. Should estimates indicate a loss is expected to be incurred under a contract, cost of sales is charged with a provision for such loss.

Deferred Tax Assets and Valuation Allowance

The Company had approximately $10,379 of net deferred tax assets related principally to certain unused tax credits and loss carryforwards as of June 30, 2004. The realization of these assets is based upon the Company generating future taxable income. Due to the Company’s historical results it is uncertain as to when it will realize taxable income that will allow it to utilize its tax credits and loss carryforwards and, accordingly, has recorded a valuation allowance of approximately $10,379. Additionally, on August 15, 2003, Saratoga purchased the preferred and common shares owned by GE. This transaction caused an ownership change greater than 50% which will limit the annual net operating loss and tax credit carryforwards the Company can use to offset any future taxable income pursuant to Section 382 of the Internal Revenue Code. This limitation is effective with the fiscal year ended June 30, 2004. The Company has net operating losses which, in accordance with the principles of fresh start accounting, were not recorded. These net operating losses are available to be utilized, and, to the extent the net operating losses are utilized, goodwill will be reduced accordingly for the benefit received. Management will continue to evaluate the realization of these deferred tax assets that are subject to the Company’s future operations. The Company’s future operations will be influenced by the general business environment, which is difficult to predict and beyond the control of the Company.

Foreign Currency

Approximately 31% of the Company’s net sales in fiscal 2004 were denominated in currencies other than U.S. dollars, principally pounds sterling, Australian dollars, Canadian dollars, Euros and Japanese yen. A significant weakening of such currencies versus the U.S. dollar could have a material adverse effect on the Company.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

During the ~~six~~nine months ended ~~December~~March 31, ~~2004~~2005, there have been no material changes in the reported market risks presented in the Company’s Annual Report on Form 10-K for the year ended June 30, 2004.

Item 4. Controls and Procedures

The Company evaluated the design and operation of its disclosure controls and procedures as of ~~December~~March 31, ~~2004~~2005, to determine whether they are effective in ensuring that the disclosure of ~~required~~ required information is timely made in accordance with the Exchange Act and the rules and forms of ~~the~~ the Securities and Exchange Commission. This evaluation was made under the supervision and with the participation of management, including the Company’s principal executive officer and chief accounting officer. The principal executive officer and chief accounting officer have concluded, based on their review, that the Company’s disclosure controls and procedures, as defined at Exchange Act Rules 13a-14(c) and 15d-14(c), are effective to ensure that information required to be disclosed by the Company in reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. No significant changes were made to the Company’s internal controls or other factors that could significantly affect these controls subsequent to the date of their evaluation.

2221

~~Table~~Part ofII. ~~Contents~~Other Information

~~Part~~Except as noted below, the items in Part II are inapplicable or, if applicable, would be answered in the negative. ~~Other~~These ~~Information~~items have been omitted and no other reference is made thereto.

Except as noted below, the items in Part II are inapplicable or, if applicable, would be answered in the negative. These items have been omitted and no other reference is made thereto.

Item 1. Legal Proceedings

On February 5, 2003, Advanced Lighting Technologies, Inc. (the “Company” or “ADLT”) and six of its United States subsidiaries, (collectively, the “Debtors”), filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the “Bankruptcy Court”). The cases were jointly administered, under the caption In re Venture Lighting International, Inc. et al (Case No. O3-05255). As previously reported, the Company emerged from reorganization in fiscal year 2004, however, the Bankruptcy Court retained jurisdiction over a disputed creditor claim by Rohm and Haas Company of approximately $2.1 million. The claim related to the payment of the purchase price for Rohm and Haas Company’s interest in Unison Fiber Optic Lighting Systems, LLC. The Company purchased the Rohm and Haas interest in Unison for cash, a promissory note and certain other consideration in February 2000. The Company contested Rohm and Haas Company’s claim to the unpaid portions of the consideration and sought repayment of a portion of the approximately $1.3 million consideration the Company had previously paid. These claims were settled pursuant to an agreement approved by the Bankruptcy Court on December 15, 2004. Pursuant to the terms of the settlement, the Company paid Rohm and Haas $1.4 million in full and final settlement of all claims.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits


Exhibit			Incorporated
Number		Title	by Reference
2.1	Venture Lighting International, Inc. et al. Fourth Amended Chapter 11 Plan of Reorganization confirmed December 8, 2003 effective December 10, 2003		(1	)

3.1	Third Amended and Restated Articles of Incorporation filed November 12, 2004		(2	)

3.2	Amended and Restated Code of Regulations		(2	)

4.1	Reference is made to Exhibit 2.1

12	Statement Re: Computation of Ratio of Earnings to Fixed Charges

31.1	Rule 13a-14(a)/15d-14(a) Certification

31.2	Rule 13a-14(a)/15d-14(a) Certification

32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Incorporated by reference to Exhibit of same number in Company’s Current Report on Form 8-K dated December 8, 2003, filed December 23, 2003.

(2)	Incorporated by reference to Exhibit of same number in Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2004, filed November 12, 2004.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended March 31, 2005.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	ADVANCED LIGHTING TECHNOLOGIES, INC.
Date: May 16, 2005	By:	/s/ Wayne R. Hellman
		Wayne R. Hellman
		Chief Executive Officer


Date: May 16, 2005	By:	/s/ Christopher F. Zerull
		Christopher F. Zerull
		Vice President and Chief Accounting Officer

~~Table~~EXHIBIT ~~of Contents~~INDEX

(1)	Incorporated by reference to Exhibit of same number in Company’s Current Report on Form 8-K dated December 8, 2003, filed December 23, 2003.
Exhibit				Incorporated
(2)	Incorporated by reference to Exhibit of same number in Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2004, filed November 12, 2004.
Number			Title	by Reference
(b)	Reports on Form 8-K
2.1		Venture Lighting International, Inc. et al. Fourth Amended Chapter 11 Plan of Reorganization confirmed December 8, 2003 effective December 10, 2003		(1	)
	No reports on Form 8-K were filed during the quarter ended December 31, 2004.
3.1		Third Amended and Restated Articles of Incorporation filed November 12, 2004		(2	)
3.2		Amended and Restated Code of Regulations		(2	)
4.1		Reference is made to Exhibit 2.1
12		Statement Re: Computation of Ratio of Earnings to Fixed Charges
31.1		Rule 13a-14(a)/15d-14(a) Certification
31.2		Rule 13a-14(a)/15d-14(a) Certification
32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

24 (1) Incorporated by reference to Exhibit of same number in Company’s Current Report on Form 8-K dated December 8, 2003, filed December 23, 2003.

~~Table~~(2) Incorporated by reference to Exhibit of ~~Contents~~same number in Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2004, filed November 12, 2004.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ADVANCED LIGHTING TECHNOLOGIES, INC.
Date: January 21, 2005	By:	/s/ Wayne R. Hellman
		Wayne R. Hellman
		Chief Executive Officer
Date: January 21, 2005	By:	/s/ Christopher F. Zerull
		Christopher F. Zerull
		Vice President and Chief Accounting Officer

EXHIBIT INDEX

Exhibit		Incorporated
Number	Title	by Reference
2.1	Venture Lighting International, Inc. et al. Fourth Amended Chapter 11 Plan of Reorganization confirmed December 8, 2003 effective December 10, 2003		(1	)
3.1	Third Amended and Restated Articles of Incorporation filed November 12, 2004		(2	)
3.2	Amended and Restated Code of Regulations		(2	)
4.1	Reference is made to Exhibit 2.1
12	Statement Re: Computation of Ratio of Earnings to Fixed Charges
31.1	Rule 13a-14(a)/15d-14(a) Certification
31.2	Rule 13a-14(a)/15d-14(a) Certification
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Incorporated by reference to Exhibit of same number in Company’s Current Report on Form 8-K dated December 8, 2003, filed December 23, 2003.

(2) Incorporated by reference to Exhibit of same number in Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2004, filed November 12, 2004.

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