The spectacle lens manufacturing industry has traditionally provided semi-finished lenses to wholesale laboratories that serve independent eye doctors or retailers, and wholesale or captive laboratories that serve specialty retailers and mass merchants.

Over the past several years, the industry has experienced significant consolidation and has witnessed the emergence of large, growing specialty retailers, often integrated with frame manufacturers and managed vision care organizations, as a primary source of spectacle lenses for the U.S. consumer.

The size of the U.S. retail vision care market, consisting of spectacle frames and lenses, contact lenses, examinations, and over-the-counter reading glasses, was approximately $22.3 billion in 2005.

The retail spectacle lens segment represented 34.0% or $7.6 billion of the U.S. retail vision care market.

The size of the U.S. spectacle lens manufacturing market was approximately $1 billion in 2005.

The U.S. lens manufacturing industry grew annually at a compounded rate of approximately 5.2% between 2001 and 2005, led by 20.2% compounded annual growth in polycarbonate lenses, 13.8% compounded annual growth in photochromic lenses and 8.2% compounded annual growth in progressive lenses.

The Company focuses primarily on polycarbonate products - photochromic, polarized and progressive lines, that operate in the highest growth segments of the lens market.

The Company currently supports over 15,000 SKUs that differ from one another in prescription type, material, correction, design, treatments, size and shape.

The Company manufactures its products from either polycarbonate or glass and it outsources the manufacturing of the plastic products that it distributes.

The Company’s lenses are sold under established industry brand names as well as private labels.

The Company manufactures new products as well as complex polycarbonate products at its manufacturing facility located in Ramsey, Minnesota, and standard polycarbonate and glass products in its manufacturing facility in Jakarta, Indonesia.

Cost of products sold was $32.7 million for the six months ended June 30, 2006, compared to $33.2 million for the six months ended June 30, 2005, a decrease of $0.5 million, or 1.4%.

Research and development expenses were $1.1 million for the six months ended June 30, 2006 compared to $0.7 million for the six months ended June 30, 2005, an increase of $0.4 million, or 59.7%.

Selling and marketing expenses were $8.0 million for the six months ended June 30, 2006 compared to $7.3 million for the six months ended June 30, 2005, an increase of $0.7 million, or 9.3%.

Interest expense increased to $3.3 million for the six months ended June 30, 2006 from $2.6 million for the six months ended June 30, 2005.