<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                        
                               FORM 10-K/A No. 1


(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the fiscal year ended NOVEMBER 30, 1997.

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from _________ to _________


Commission File Number: 0-5848

                                   SLI, Inc.
                    (Formerly Chicago Miniature Lamp, Inc.)
             (Exact Name of Registrant as Specified in Its Charter)


        OKLAHOMA                                           73-1412000
(State of Incorporation)                       (IRS Employer Identification No.)


                500 CHAPMAN STREET, CANTON, MASSACHUSETTS, 02021
               (Address of Principal Executive Offices, Zip Code)


                                 (781) 828-2948
              (Registrant's Telephone Number, Including Area Code)


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

                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                                (Title of Class)


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

<PAGE>   2

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

         The Company is a leading, vertically integrated designer, manufacturer
and seller of lighting systems, which are comprised of lamps, fixtures, and
ballasts. Through its 13 acquisitions completed since 1992, the Company has
grown from a specialized manufacturer of neon lamps and miniature lighting
assemblies into a full range supplier of lamps (incandescent, fluorescent,
compact fluorescent, HID, halogen, miniature incandescent, neon, LED's and
special lamps), a near full range supplier of fixtures and fiber optic lighting
systems and a full range supplier of magnetic and electronic ballasts. The
Company believes that it is one of the six largest global lighting companies and
one of only three major international producers to offer an integrated package
of lamps, fixtures and ballasts. The Company serves a diverse, international
customer base, has 25 manufacturing plants in 13 countries and operates
throughout the world.

         The Company was established in 1985, and completed its initial public
offering ("IPO") in June 1995 and a subsequent offering of Common Stock in
October 1996. An important part of the Company's initial development has been
its geographic and product range expansion through acquisitions. Since its IPO
and prior to The 1997 Acquisitions, the Company completed the following
acquisitions:

         -        Fredon, a tool, die and mold maker;
         -        Badalex, an engineering and design builder of automated
                  lamp-making equipment;
         -        CML Fiberoptics, an established producer of high tech
                  fiber optic products and manufacturer of glass and plastic
                  fibers;
         -        CML Europe, a U.K. manufacturer of halogen and specialty 
                  lamps;
         -        Alba, a German manufacturer of miniature and subminiature
                  lamps and value added assemblies.

         Such acquisitions, together with pre-IPO 1995 acquisition of CML
Canada, a manufacturer and supplier of miniature lighting assemblies and bulb
sockets, are hereinafter referred to as "Prior Acquisitions."

         In January 1997, the Company acquired Bruckner which engineers, designs
and manufactures automated miniature lamp-making equipment and Power Lighting
Products, a manufacturer of magnetic and electronic ballasts for the linear and
compact fluorescent, sign, and HID lighting markets. In September 1997, the
Company acquired 100% of the outstanding stock of SLI, a privately held company
based in Geneva, Switzerland, for $161.5 million in cash, its largest
acquisition to date. SLI is one of the world's premier full-line lighting
companies, manufacturing and marketing six well respected lamp, fixture, and
specialized lighting brands throughout the world, except for North America.

         Both the Prior Acquisitions and The 1997 Acquisitions were funded with
a combination of the proceeds from the Company's Common Stock offerings, bank
borrowings and cash flow from operations.

         The Company's acquisition strategy has a significant impact on year to
year comparisons of revenues and earnings. The fiscal year ended November 30,
1997 includes operating results for eleven months of Bruckner, ten months of
Power Lighting Products and three months of SLI. The operating results for the
fiscal year ended December 1, 1996 includes the full year results of Badalex,
CML Europe, CML Fiberoptics, and seven months of Alba. The operating results for
the fiscal year ended December 3, 1995 includes eight months of CML Canada and
three months of Fredon.



                                       2
<PAGE>   3
         The following discussion and analysis of the results of operations for
the twelve months ended November 30, 1997 should be read in conjunction with the
Consolidated Financial Statements of the Company with accompanying notes. Except
for historical matters contained herein, the matters discussed herein are
forward-looking statements and are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements reflect assumptions and involve risks and uncertainties which may
affect Chicago Miniature Lamp, Inc.'s business and prospects and cause actual
results to differ materially from these forward-looking statements and should be
read in conjunction with the "Risk Factors" section of this Report on Form 10-K.

RESULTS OF OPERATIONS

         The following table presents, for the periods indicated, certain items
in the Company's Consolidated Statements of Income expressed as a percentage of
net sales:

<TABLE>
<CAPTION>
                                                Year         Year        Year
                                               Ended        Ended       Ended
                                               -----        -----       -----
                                              12/3/95      12/1/96     11/30/97
                                              -------      -------     --------
<S>                                           <C>          <C>         <C>
Net sales...............................       100.0%       100.0%       100.0%
Cost of products sold...................        64.0         64.9         70.3
                                               -----        -----        -----
       Gross margin.....................        36.0         35.1         29.7
Selling, general and
       administrative expenses..........        14.7         15.4         19.8
Restructuring costs ....................                                   1.6
                                               -----        -----        -----
       Operating Income.................        21.3         19.7          8.3
Interest expense, net...................         1.4           .3           .4
Other (income) expense..................        (0.1)        (1.3)         (.7)
                                               -----        -----        -----
Income before provision
       for income taxes.................        20.0         20.7          8.6
Provision for income
       taxes............................         5.2          6.4          2.3
                                               -----        -----        -----
       Net income.......................        14.8%        14.3%         6.3%
                                               =====        =====        =====
</TABLE>



                                       3
<PAGE>   4

Year ended November 30, 1997 compared to year ended December 1, 1996
 
         Net sales.  Net sales increased from $94.2 million for the year ended
December 1, 1996 to $330.0 million for Fiscal 1997. This increase was primarily
attributable to the impact of the PLP and SLI, B.V. acquisitions and to a lesser
extent, growth from existing operations. Net sales of PLP totaled $70.5 million
from January 31, 1997 (the effective date of acquisition) to November 30, 1997
and net sales of SLI, B.V. totaled $149.2 million from September 1, 1997 (the
effective date of acquisition) to November 30, 1997. The Company's strategy of
integrating acquisitions can affect sales comparisons as existing capacity is
utilized for internal purposes.
 
         Gross margin.  Gross margin increased from $33.0 million for the year
ended December 1, 1996 to $98.0 million for Fiscal 1997, due primarily to the
increase in sales volume attributable to the PLP and SLI, B.V. acquisitions. PLP
contributed $15.0 million to the total gross margin from the date of acquisition
and the gross margin of SLI, B.V. was $47.7 million for the period from the date
of acquisition to November 30, 1997. Gross margin, as a percentage of net sales,
decreased from 35.1% for the year ended December 1, 1996 to 29.7% for Fiscal
1997, due primarily to the impact of the lower gross margin of the ballast
business of PLP, which business has traditionally had lower gross margins than
the Company's other products. This gross margin percentage is expected to
improve as restructuring plans developed at the time of acquisition are
implemented.

         Selling, general and administrative expenses.  Selling, general and
administrative expenses increased from $14.6 million for the year ended December
1, 1996 to $65.5 million for Fiscal 1997. This increase was largely due to the
impact of the PLP and SLI, B.V. acquisitions. As a percentage of net sales,
selling, general and administrative expenses increased from 15.4% for the year
ended December 1, 1996 to 19.8% for Fiscal 1997, primarily as a result of the
impact of the PLP and SLI, B.V. acquisitions. The Company's strategy is to
decrease selling, general and administrative expenses attributable to the
acquired companies through restructuring plans which are currently being
implemented.

         In fiscal 1997, and in connection with the acquisition of SLI B.V., the
Company developed and approved restructuring plans for existing operations,
which resulted in charges of approximately $5.1 million. The restructuring
included the plant closure, personnel termination, and asset liquidation of the
lamp-making operation of CML Europe, which became redundant due to the SLI B.V.
acquisition. The facility's land and building was sold, and the equipment was
sold or scrapped. Employee severance cost at the Company's Badalex (U.K.)
machinery making operation resulted from the downsizing due to the duplication
of functions after the SLI B.V. acquisition. Additionally, the Company's leased
Illinois warehouse and distribution location was closed and personnel were
terminated. Also, the Company's Oklahoma manufacturing operation was considered
redundant in light of the SLI B.V. acquisition and the lamp making equipment was
disposed. Substantially, this entire restructuring plan has been completed. The
cash, for the remaining restructuring, will be expended prior to the end of
1998. The Company expects to realize approximately $3.0 million in cost savings
over the next two-year period as a result of reduced employee expense of $2.9
million and reduced depreciation expense of $60,000.

         The Company believes that these restructuring plans are a necessary
action based on the exiting of these activities and are required to maintain a
competitive position. See Note 8 of "Notes to the Company's Consolidated
Financial Statements".

         Interest expense, net.  Interest expense, net, increased from $301,000
for the year ended December 1, 1996 to $1,156,000 for Fiscal 1997, primarily as
a result of the bank financing in connection with the acquisition of SLI, B.V.
Interest income of approximately $4.1 million was generated in Fiscal 1997,
primarily from the investment of $98.3 million in proceeds from the Company's
public offering completed in October 1996. A portion of these proceeds was used
during the year for the PLP and SLI, B.V. acquisitions ($65.0 million), the
repurchase of Common Stock ($8.7 million) and for other capital expenditures.



                                       4
<PAGE>   5
         Other income.  Other income increased from $1.3 million in the year
ended December 1, 1996 to $2.3 million in Fiscal 1997. This increase included a
$985,000 gain from the sale by CML Fiberoptics to Schott Corporation ("Schott")
of a 49% interest in a newly-created entity, Schott-CML Fiberoptics, LLC. See
"Business -- Joint Venture." The remainder of the increase and substantially all
of the remaining balance of other income for Fiscal 1997 was the result of
recording the effects of foreign exchange transactions.

         Income before income taxes.  As a result of the above factors, income
before provision for income taxes increased from $19.5 million for the year
ended December 1, 1996 to $28.5 million for Fiscal 1997. As a percentage of net
sales, income before provision for income taxes decreased from 20.7% for the
year ended December 1, 1996, to 8.6% for Fiscal 1997.

         Income taxes.  For Fiscal 1997, the Company recorded a tax provision of
$7.6 million on pre-tax income of $28.5 million, for an effective rate of 26.6%,
compared to a tax provision of $6.0 million on pre-tax income of $19.5 million,
for an effective rate of 31.0%, for the year ended December 1, 1996. The lower
effective tax rate in Fiscal 1997 was due to the impact of income in countries
with effective tax rates lower than those in the U.S. and realization of tax
attributes, including net operating loss carry forwards, attributable to the
acquisition of SLI, B.V. An effective tax rate lower than the U.S. statutory
effective tax rate is expected to continue for several years due to the
significant international operations of the Company. See Note 5 of Notes to the
Company's Consolidated Financial Statements.

Year ended December 1, 1996 compared to year ended December 3, 1995

         Net sales.  Net sales increased from $57.4 million for the year ended
December 3, 1995 to $94.2 million for the year ended December 1, 1996. This
increase in sales was primarily attributable to the impact of the Prior
Acquisitions, growth in market share and continued customer development. The
Prior Acquisitions accounted for $29.8 million of the increase in net sales. A
number of the Company's Prior Acquisitions were not included in the operations
of the Company for the year ended December 3, 1995.
 
         Gross margin.  Gross margin increased from $20.7 million for the year
ended December 3, 1995 to $33.0 million for the year ended December 1, 1996, due
primarily to the increase in sales volume resulting from the Prior Acquisitions.
Gross margin, as a percentage of net sales, decreased from 36.0% for the year
ended December 3, 1995 to 35.5% for the year ended December 1, 1996, due to a
change in product mix and the impact of lower margins at the companies acquired
in the Prior Acquisitions.
 
         Selling, general and administrative expenses.  Selling, general and
administrative expenses increased from $8.5 million for the year ended December
3, 1995 to $14.6 million for the year ended December 1, 1996. This increase was
largely due to the impact of the Prior Acquisitions. As a percentage of net
sales, selling, general and administrative expenses increased from 14.7% for the
year ended December 3, 1995 to 15.4% for the year ended December 1, 1996,
primarily as a result of the impact of the Prior Acquisitions.
 
         Interest expense, net.  Interest expense, net, decreased from $803,000
for the year ended December 3, 1995 to $301,000 for the year ended December 1,
1996, primarily as a result of the reduction of outstanding debt in June 1995
from the application of a portion of the net proceeds from the Company's initial
public offering and cash flow from operations. This reduction in debt was offset
by new debt incurred to finance certain acquisitions. Interest income of
approximately $600,000 was generated from the investment of the proceeds from
the public offering completed in October 1996.
 
         Other income.  Other income increased from $47,000 for the year ended
December 3, 1995 to $1,294,000 for the year ended December 1, 1996.
Substantially all of this increase in income resulted from recording the effects
of foreign exchange transactions. The Company made yen-denominated borrowings at
favorable interest rates, which debt was marked to market at the existing
exchange rates as of the reporting dates, and resulted in an unrealized gain of
$440,000 in the year ended December 1, 1996.
 
         Income before income taxes.  As a result of the above factors, income
before provision for income taxes increased from $11.5 million for the year
ended December 3, 1995 to $19.5 million for the year ended December 1, 1996. As
a percentage of net sales, income before provision for income taxes increased
from 20.0% for the year ended December 3, 1995 to 20.7% for the year ended
December 1, 1996.
 
         Income taxes.  For the year ended December 1, 1996, the Company
recorded a tax provision of $6.0 million on pre-tax income of $19.5 million, for
an effective rate of 31%, compared to a tax provision of $3.0 million on pre-tax
income of $11.5 million, for an effective rate of 26%, for the year ended
December 3, 1995. The higher tax rate for the year ended December 1, 1996 was
due to the increase in pre-tax income generated in countries with tax rates
higher than those for the U.S.



                                       5
<PAGE>   6
LIQUIDITY AND CAPITAL RESOURCES
 
         The Company's major uses of cash have historically been for
acquisitions, working capital to support sales growth and ongoing capital
expenditures. Sources of cash have typically included operating cash flow, bank
borrowings and proceeds from the sale of Common Stock. In October 1996, the
Company completed a public offering pursuant to which the Company issued and
sold 5,287,125 shares of its Common Stock and received net proceeds of
approximately $98.3 million. The Company used the net proceeds from such
offering to reduce debt, and to expand its manufacturing infrastructure
primarily through acquisitions and capital expenditures.
 
         As of November 30, 1997, the Company's cash on hand was $73.4 million.
For Fiscal 1997, net cash provided by operating activities was $31.7 million
compared to net cash provided by operating activities of $400,000 for fiscal
1996. The increase was a result of increased net income ($8 million) and an
increase in accounts payable and long-term liabilities primarily for SLI, B.V.
since the date of acquisition ($24 million).
 
         The accounts payable increase related to the timing of purchases and
payments. For Fiscal 1997, cash used in investing activities totaled $189.3
million. The investing activities included primarily (i) the Bruckner and PLP
acquisitions in connection with which the Company paid an aggregate amount of
approximately $25.0 million and (ii) the SLI, B.V. acquisition in connection
with which the Company paid approximately $161.5 million. Net cash provided by
financing activities in Fiscal 1997 aggregated $121.9 million, which included
$132.4 million in borrowings under the Company's credit facilities net of, among
other things, repurchases of Common Stock totaling $8.7 million.
 
         In connection with the acquisition of SLI, B.V., the Company entered
into a new bank financing agreement. The agreement provides for a $250.0 million
revolving credit facility, which includes (i) a $50.0 million foreign currency
facility and (ii) a $15.0 million letter of credit facility. These credit
facilities mature on August 30, 2002. The Company used $40.0 million of internal
cash on hand and borrowed approximately $121.5 million under the revolving
credit facility to finance the acquisition of SLI, B.V. Additionally, the
Company borrowed approximately $61.9 million under the revolving credit facility
to refinance indebtedness of the Company and certain of its subsidiaries and to
pay various expenses incurred in connection with the acquisition of SLI, B.V. As
of November 30, 1997, the Company had available borrowings of approximately
$66.6 million under the bank financing agreement. The face amount of letters of
credit issued under the bank financing agreement totaled approximately $3.4
million at such date.

         In connection with the purchase price accounting for the acquisition of
SLI B.V., the Company recorded a provision for reorganization pursuant to an
initial plan put in place at the time of acquisition, amounting to $25.0
million. The reorganization plan includes employee terminations in Europe, Latin
America, Australia and Asia and the closure of leased warehouses and
administrative facilities. The warehouse closures will occur in France, Belgium
and Scandinavia, and the administrative closures will occur in Switzerland,
France, Austria and Benelux. The purchase liabilities include severance costs,
remaining payments on non-cancelable operating leases, costs to return the
facilities to the condition at the outset of the lease, the write-off of the
remaining net book value of leasehold improvements and the cost to relocate
employees. Accrued lease costs are for costs to be incurred subsequent to the
Company vacating the facilities. The costs in connection with this
reorganization plan will be incurred over the next two years and will be paid
from cash provided by operations. The Company expects to realize savings of
approximately $18 million by 1999 as a result of reduced employee expense of
approximately $12 million, reduced lease cost of approximately $5.9 million and
reduced depreciation expense of approximately $100,000.

         The Company believes that this restructuring plan is a necessary
action based on the exiting of these activities and is required to maintain a
competitive position. See Note 8 of "Notes to the Company's Consolidated
Financial Statements".

         The Company conducts business in countries outside of the United States
which exposes the Company to fluctuations in foreign currency exchange rates.
The Company may enter into short-term forward exchange contracts to hedge this
risk; nevertheless, fluctuations in foreign currency exchange rates could have
an adverse effect on the Company's business. The Company does not hold or issue
financial instruments for trading or speculative purposes. The Company has
significant operations in Europe and, to a lesser extent, in Latin America. The
introduction of a single European currency is expected to reduce the currency
risks associated with inter-European transactions. However, risks will remain
with respect to transactions with customers or suppliers outside of the zone
covered by the single European currency. The Company's operations in Latin
America are carried out primarily in Brazil, Costa Rica and Colombia. Although
currently not classified as a hyper-inflationary country, Brazil has been
classified as such in the past.

         The Company believes that cash from operations and borrowings available
under the Company's revolving credit facility will be sufficient to meet the
Company's working capital and capital expenditure needs for the next twelve
months and for the foreseeable future thereafter.

NET OPERATING LOSS CARRY FORWARDS
 
         SLI, B.V. had net operating loss ("NOL") carryforwards for tax purposes
of approximately $136 million at November 30, 1997, of which approximately $37.9
million expire through 2007 and $98.1 million do not expire. Approximately 25%
of these NOL carryforwards relate to operations in France (a portion of which


                                       6
<PAGE>   7
expire through 2002), approximately 25% relate to operations in Belgium (which
do not expire) and the remaining NOL carryforwards relate to operations in
various other tax jurisdictions outside the United States.
 
SEASONALITY
 
         As a result of the acquisition of SLI, B.V., it is expected that the
Company's operations will experience certain seasonal patterns. Generally, SLI,
B.V.'s sales have been highest in the fourth quarter of each year due to
abbreviated daylight hours and increased holiday light usage.
 
IMPACT OF YEAR 2000
 
         The year 2000 issue is the result of computer programs being written
using two digits rather than four digits to define the applicable year. Any of
the Company's computer programs that have time-sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices or engage in similar normal business activities.
 
         Based on a recent assessment, the Company determined that it will be
required to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter. The Company presently believes that with modifications to existing
software and conversions to new software, the year 2000 issue will not pose
significant operational problems for its computer systems. However, if such
modifications and conversions are not made, or are not completed in a timely
manner, the year 2000 issue could have a material impact on the operations of
the Company.
 
         The Company will utilize both internal and external resources to
reprogram or replace and test the software for the year 2000 modifications. The
Company anticipates completing the year 2000 project no later than December 31,
1998, which is prior to any anticipated impact on its operating systems. The
total cost of the year 2000 project is estimated at $3.3 million and is
anticipated to be funded through the Company's operating cash flows.
 
         The costs of the project and the date on which the Company believes it
will complete the year 2000 modifications are based on management's best
estimates, which were derived by utilizing numerous assumptions of future
events, including the continued availability of certain resources, third party
modification plans and other factors. However, there can be no assurance that
these estimates will be achieved and actual results could differ materially from
those anticipated. Specific factors that might cause such material differences
include, but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer codes, and
similar uncertainties.
 
         The Company is communicating with customers, suppliers, financial
institutions and other vendors with which it does business to coordinate year
2000 conversion efforts. The ability of third parties with whom the Company
transacts business to adequately address their year 2000 issues is outside the
Company's control. There can be no assurance that the failure of such third
parties to adequately address their respective year 2000 issues will not have a
material adverse effect on the Company's business, financial condition, cash
flows and results of operations.
 


                                       7
<PAGE>   8


       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

                        Consolidated Financial Statements


                         Years ended November 30, 1997,
                     December 1, 1996, and December 3, 1995




                                    CONTENTS

<TABLE>
<S>                                                                           <C>
Report of Independent Auditors................................................1

Consolidated Financial Statements

Consolidated Balance Sheets...................................................2
Consolidated Statements of Income.............................................4
Consolidated Statements of Stockholders' Equity ..............................5
Consolidated Statements of Cash Flows.........................................6
Notes to Consolidated Financial Statements....................................7
</TABLE>



<PAGE>   9




                         Report of Independent Auditors

The Board of Directors and Shareholders
SLI, Inc. (formerly Chicago Miniature Lamp, Inc.)

We have audited the accompanying consolidated balance sheets of SLI, Inc.
(formerly Chicago Miniature Lamp, Inc.) and subsidiaries as of November 30, 1997
and December 1, 1996, and consolidated statements of income, stockholders'
equity, and cash flows for the years ended November 30, 1997, December 1, 1996,
and December 3, 1995. Our audits also included the financial statement schedule
for the years ended November 30, 1997, December 1, 1996, and December 3, 1995,
listed in the index at Item 14(a). These financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits. We
did not audit the financial statements of Chicago Miniature Lamp (Canada), Inc.,
a wholly owned subsidiary, which statements reflect total assets of $10,469,000
and $9,887,000 as of November 30, 1997 and December 1, 1996, respectively, and
total revenues of $14,605,000 and $13,031,000 for the years ended November 30,
1997 and December 1, 1996 and $7,064,000 for the period from March 30, 1995
(date of acquisition) to December 3, 1995. Those statements were audited by
other auditors whose report has been furnished to us, and our opinion, insofar
as it relates to data included for Chicago Miniature Lamp (Canada), Inc., is
based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of other auditors provides a
reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of SLI, Inc. (formerly Chicago Miniature
Lamp, Inc.) and subsidiaries at November 30, 1997 and December 1, 1996, and the
consolidated results of their operations and their cash flows for the years
ended November 30, 1997, December 1, 1996, and December 3, 1995, in conformity
with generally accepted accounting principles. Also in our opinion, the related
financial statement schedule for the years ended November 30, 1997, December 1,
1996, and December 3, 1995, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.




Chicago, Illinois
January 9, 1998,
except for the 1998 stock split as described in Note 2, as to which the date is,
February 11, 1998


                                                                               1
<PAGE>   10


       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

                           Consolidated Balance Sheets
                             (Dollars in Thousands)


<TABLE>
<CAPTION>
                                                    NOVEMBER 30      DECEMBER 1 
                                                       1997             1996
                                                    ----------------------------
ASSETS
Current assets:
<S>                                                 <C>              <C>     
   Cash and cash equivalents                          $ 73,416         $109,027
   Accounts receivable, less allowances for 
     doubtful accounts of
     $7,889 in 1997 and $524 in 1996                   140,380           18,532
   Receivable from stockholder                               -              594
   Inventories                                         124,086           16,186
   Prepaid expenses and other                           12,120            1,496
                                                     --------------------------
Total current assets                                   350,002          145,835


Property, plant, and equipment, net                    269,650           52,151

Other assets:
   Goodwill, net of accumulated amortization             7,651            6,931
   Other intangible assets, net of 
     accumulated amortization                           12,039            7,030
   Other                                                12,319               55













                                                      -------------------------
Total assets                                          $651,661         $212,002
                                                      =========================
</TABLE>

The accompanying notes are an integral part of these financial statements.



2
<PAGE>   11

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries


                          Consolidated Balance Sheets
                (Dollars in Thousands, Except Share Amounts)


<TABLE>
<CAPTION>
                                                                   NOVEMBER 30           DECEMBER 1 
                                                                       1997                 1996
                                                                   --------------------------------- 
<S>                                                                <C>                   <C>      
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
   Short-term notes payable                                          $  5,432              $ 21,560
   Current portion of long-term debt                                    9,389                 3,614
   Accounts payable                                                   102,104                 6,404
   Accrued expenses                                                   107,616                12,907
   Income taxes payable                                                 7,855                 3,042
                                                                    -------------------------------
Total current liabilities                                             232,396                47,527

Long-term debt, less current portion                                  185,434                 5,607

Other liabilities:
   Deferred income taxes                                                5,532                 6,116
   Other long-term liabilities                                         62,037                 1,542
                                                                    -------------------------------
Total other liabilities                                                67,569                 7,658

Minority interests                                                        211                    46
Commitments                                                                --                    --

Stockholders' equity:
   Preferred stock, $.01 par value - Authorized
     - 5,000,000 shares, none issued and outstanding                       --                    --
   Common stock, $.01 par value - Authorized
     - 100,000,000 shares
     - Issued - 29,301,979 and
     29,185,873 shares in 1997 and
     1996, respectively                                                   293                   292
   Additional paid-in capital                                         126,835               126,005
   Retained earnings                                                   45,218                24,277
   Foreign currency translation adjustment                              2,377                   590
   Less:  Treasury stock at cost, 643,345 shares in 1997               (8,672)                   --
                                                                    -------------------------------
Total stockholders' equity                                            166,051               151,164
                                                                    -------------------------------
Total liabilities and stockholders' equity                           $651,661              $212,002
                                                                    ===============================
</TABLE>

The accompanying notes are an integral part of these financial statements.



                                                                               3

<PAGE>   12

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries


                        Consolidated Statements of Income
                (Dollars in Thousands, Except Per Share Amounts)


<TABLE>
<CAPTION>
                                                                        YEAR ENDED
                                                     ------------------------------------------------------
                                                     NOVEMBER 30          DECEMBER 1           DECEMBER 3 
                                                          1997               1996                 1995
                                                     ------------------------------------------------------

<S>                                                 <C>                  <C>                  <C>         
Net sales                                            $   329,959          $    94,171          $    57,402
Cost of products sold                                    231,933               61,147               36,726
                                                    ------------------------------------------------------
Gross margin                                              98,026               33,024               20,676

Selling, general, and administrative
 expenses                                                 65,549               14,552                8,462
Restructuring costs                                        5,115                   --                   --
                                                    ------------------------------------------------------
Operating income                                          27,362               18,472               12,214

Other (income) expenses:
   Interest expense, net                                   1,156                  301                  803
   Other, net                                             (2,326)              (1,294)                 (47)
                                                    ------------------------------------------------------
Income before income taxes                                28,532               19,465               11,458
Income taxes                                               7,591                6,029                2,993
Net income                                           $    20,941          $    13,436          $     8,465
                                                    ======================================================
Net income per common share, as adjusted for
 1998 stock split described in Note 2                $       .73          $       .55          $       .41
                                                    ======================================================

Weighted-average shares outstanding, as
 adjusted for 1998 stock split described in
 Note 2                                               28,760,505           24,357,099           20,880,169
                                                    ======================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.






4
<PAGE>   13


       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

                 Consolidated Statements of Stockholders' Equity
                             (Dollars in Thousands)


<TABLE>
<CAPTION>
                                             COMMON STOCK
                                     -----------------------------
                                                                                                 FOREIGN
                                                                   ADDITIONAL                    CURRENCY
                                       NUMBER OF                 PAID-IN CAPITAL   RETAINED    TRANSLATION     TREASURY
                                         SHARES      PAR VALUE                     EARNINGS     ADJUSTMENT      STOCK
                                     --------------------------------------------------------------------------------------

<S>                                  <C>             <C>         <C>               <C>         <C>           <C>       
Balance at November 28, 1994            18,743,625       $187     $       110      $  2,376    $       -     $        -
Net income                                       -          -               -         8,465            -              -
Issuance of common stock:
   Initial public offering,
     including over allotment,
     net of offering costs               4,792,500         48          23,636             -            -              -
   Other stock issuance                     21,229          1              59             -            -              -
Translation adjustment (net of
   deferred taxes of $24)                        -          -               -             -           39              -
                                     --------------------------------------------------------------------------------------
Balance at December 3, 1995             23,557,354        236          23,805        10,841           39              -
   Net income                                    -          -               -        13,436            -              -
Issuance of common stock:
   Public offering, including over
     allotment, net of offering          5,287,125         53          98,291             -            -              -
     costs
   Alba acquisition                        225,000          2           3,248             -            -              -
   Exercise of stock options               116,394          1             661             -            -              -
Translation adjustment (net of
   deferred taxes of $180)                       -          -               -             -          551              -
                                     --------------------------------------------------------------------------------------
Balance at December 1, 1996             29,185,873        292         126,005        24,277          590              -
Net income                                       -          -               -        20,941            -              -
Issuance of common stock:
   Additional offering costs                     -          -            (212)            -            -              -
   A&S acquisition                           4,500          -             100             -            -              -
   Exercise of stock options               111,606          1             942             -            -              -
Repurchase shares for treasury
   (643,345 shares)                              -          -               -             -            -         (8,672)
Translation adjustment (net of
   deferred taxes of $771)                       -          -               -             -        1,787              -
                                     ======================================================================================
Balance at November 30, 1997            29,301,979       $293        $126,835       $45,218       $2,377        $(8,672)
                                     ======================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                                                               5
<PAGE>   14



       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

                      Consolidated Statements of Cash Flows
                             (Dollars in Thousands)


<TABLE>
<CAPTION>

                                                                         YEAR ENDED                     
                                                        --------------------------------------------------
                                                        NOVEMBER 30       DECEMBER 1        DECEMBER 3  
                                                            1997             1996              1995     
                                                        --------------------------------------------------
<S>                                                     <C>                  <C>              <C>      
OPERATING ACTIVITIES                                                                                    
Net income                                                $  20,941          $ 13,436         $  8,465  
Adjustments to reconcile net income to net cash                                                         
   provided by operating activities:                                                                    
     Depreciation and amortization                            7,252             3,165            1,901  
     Deferred income taxes                                   (3,094)              907              155  
     Stock issued to employees                                    -                 -               60  
     Minority interest in income of joint venture               162                 -                -  
     Loss on disposal of property, plant, and                                                           
       equipment                                                876                 -                -  
     Changes in operating assets and liabilities:                                                       
       Accounts receivable                                  (15,597)           (5,110)          (1,728) 
       Inventories                                              695            (4,873)            (623) 
       Prepaid expenses and other                              (182)             (440)            (272) 
       Accounts payable                                      21,051            (3,478)             (95) 
       Accrued expenses                                      (4,669)            1,452             (579) 
       Income taxes payable                                  (1,825)             (652)           2,092  
       Stockholder payable/receivable                           594              (594)          (1,079) 
       Other long-term liabilities                            5,455            (3,402)            (155) 
       Other                                                      -               (18)             (54) 
                                                        --------------------------------------------------
Net cash provided by operating activities                    31,659               393            8,088  
                                                                                                        
INVESTING ACTIVITIES                                                                                    
Purchases of property, plant, and equipment                 (23,992)           (8,921)          (2,465) 
Acquisitions, net of cash acquired                         (165,325)          (10,293)         (10,308) 
Maturities (purchases) of held-to-maturity                                                              
   investments                                                    -             2,102           (2,102) 
                                                        --------------------------------------------------
Net cash used for investing activities                     (189,317)          (17,112)         (14,875) 
                                                                                                        
FINANCING ACTIVITIES                                                                                    
Net borrowings (repayments) of line of credit                (4,541)            1,804           (7,055) 
Proceeds from borrowings                                    189,105            24,442            9,046  
Payments of long-term debt                                  (52,128)           (3,214)         (19,441) 
Payment of deferred financing costs                          (2,616)             (297)               -  
Proceeds from issuance of common stock - Net of                                                         
   offering costs                                                 -            98,344           23,684  
Repurchase of shares for treasury                            (8,672)                -                -  
Exercise of stock options                                       943               662                -  
Other                                                          (212)                -                -  
                                                        --------------------------------------------------
Net cash provided by financing activities                   121,879           121,741            6,234  
Effect of exchange rate changes on cash                         168                 -                -  
                                                        ---------------------------------------------------
Net increase (decrease) in cash and cash equivalents        (35,611)          105,022             (553)
Cash and cash equivalents, beginning of year                109,027             4,005            4,558
                                                        ===================================================
Cash and cash equivalents, end of year                    $  73,416          $109,027         $  4,005
                                                        ===================================================
                                                        
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION        
Cash paid for:                                          
   Interest                                               $   2,097          $    936         $  1,155
                                                        ===================================================
   Income taxes                                           $   7,447          $  3,802         $    629
                                                        ===================================================
</TABLE>                                               

The accompanying notes are an integral part of these financial statements.


6
<PAGE>   15


       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries
                   Notes to Consolidated Financial Statements

1. ORGANIZATION AND ACQUISITIONS

SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) (an Oklahoma corporation) and
subsidiaries (collectively, the Company) designs, manufactures and sells
lighting systems which are comprised of lamps, fixtures and ballasts. The
Company offers a complete range of lamps (incandescent, flourescent, compact
flourescent, high intensity discharge, halogen, miniature incandescent, neon,
LED's, and special lamps), a near complete range of fixtures, and fiber optic
lighting systems. The Company serves a diverse international customer base and
markets, has major plants in 13 countries and operates throughout the world.

In March 1995, the Company initiated operations at IDI Internacional, S.A.
located in Costa Rica. Operations at this facility include the manufacture of
value-added lighting assemblies.

On March 30, 1995, the Company acquired all of the capital stock of Chicago
Miniature Lamp (Canada) Inc. (CML Canada; formerly named Plastomer, Inc.), a
Canadian company, for $5.0 million Canadian in cash. The foreign currency
exchange rate as of March 30, 1995, was 0.713 U.S. dollars to one Canadian
dollar. CML Canada manufactures injection molded components for the automotive
industry.

In August 1995, the Company acquired all of the capital stock of Fredon
Development Industries, Inc. (Fredon) for $2,245,000 in cash.

On November 10, 1995, the Company, through its wholly owned subsidiary Badalex
Limited (Badalex), acquired substantially all of the assets of STT Badalex
Limited, STI Lighting Limited, PRT Shipping Limited, and STT Holdings Limited,
all companies formed under the laws of England for approximately $4.2 million in
cash. The Company also assumed liabilities of up to $4.8 million. At the end of
1995, the purchase allocation was preliminary. In 1996, adjustments were made to
goodwill in the amount of $2.8 million. Badalex designs and manufactures lamp
machinery.

On December 1, 1995, the Company acquired all of the outstanding stock of
Electro Fiberoptics, Inc. for $1.6 million in cash. This acquisition was made
through the Company's wholly owned subsidiary, CML Fiberoptics, Inc.
(Fiberoptics). Subsequently, Fiberoptics contributed substantially all of its
net assets (approximately $500,000) to a newly formed L.L.C. In January 1997,
the Company entered into a joint venture agreement with Schott Corporation
whereby Schott Corporation acquired a 49% interest in the newly formed L.L.C.
(Schott CML Fiberoptics L.L.C.) for $1.3 million.

In December 1995, the Company through Badalex acquired certain assets of Phoenix
Lighting (UK) Limited (CML Europe) for approximately $2,400,000 in cash.


                                                                               7
<PAGE>   16

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



1.  ORGANIZATION AND ACQUISITIONS (CONTINUED)

Effective May 1, 1996, the Company acquired all the outstanding equity of W.
Albrecht GmbH U.Co. KG (Germany) and Alba Lamps, Inc. (USA) and certain equity
interests in their affiliates (collectively Alba) for approximately $8.5 million
in cash, 225,000 shares of common stock of the Company, and the assumption of
approximately $4.9 million of bank debt (total consideration of approximately
$16,650,000). Alba is a manufacturer and supplier of miniature lamps,
value-added assemblies and instrument backed lighting systems.

In January 1997, the Company through Alba, acquired all the capital stock of
Gustav Bruckner GmbH (Bruckner) for DM 400,000 and the assumption of
approximately DM 2.4 million in bank debt (total consideration of approximately
$1,652,000).

On January 30, 1997, the Company acquired all the outstanding capital stock of
Valmont Electric, Inc. for approximately $22.3 million in cash and changed the
entity name to Power Lighting Products, Inc. (PLP). PLP is a manufacturer of
magnetic and electronic ballasts.

Effective September 1, 1997, the Company acquired all the outstanding capital
stock of Sylvania Lighting International, B.V. and its subsidiaries (SLI B.V.)
for $161.5 million in cash financed with the Company's cash and a new credit
facility (Note 4). SLI B.V. is an integrated designer, manufacturer, and seller
of lighting systems. SLI B.V. has a total of 13 manufacturing facilities in
Europe, Latin America, and Australia and sells to customers throughout the
world.

In September 1997, the Company, through Alba, acquired an additional 38% of A&S
Electric s.r.o., Czech Republic for DM 150,000 and 4,500 shares of common stock
of the Company (total consideration of approximately $185,000).

On November 24, 1997, the Company acquired certain assets of Solium, Inc. for
$2,500,000 in cash.

For financial reporting purposes, each acquisition was accounted for as a
purchase, and the purchase price was allocated to assets acquired and
liabilities assumed based on the estimated fair market value existing at the
date of acquisition. The excess of purchase price over fair market value of net
assets acquired is reflected in the accompanying consolidated balance sheets as
goodwill. The PLP and SLI B.V. allocations are based on preliminary information
and are subject to adjustment. Any adjustment is not anticipated to be material.



8

<PAGE>   17

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



1.  ORGANIZATION AND ACQUISITIONS (CONTINUED)

Based on unaudited data, the following table presents selected financial
information for the Company and its subsidiaries on a pro forma basis, assuming
the companies had been consolidated since December 4, 1995:
<TABLE>
<CAPTION>
                                                            YEAR ENDED
                                                   NOVEMBER 30      DECEMBER 1
                                                       1997            1996
                                                   ---------------------------

         <S>                                       <C>              <C>     
         Net sales                                 $755,364         $808,372
         Net income                                  22,264           17,071
         Net income per share, as adjusted for
          1998 stock split, as described in
          Note 2                                        .77              .70
</TABLE>

The pro forma results are not necessarily indicative of future operations or the
actual results that would have occurred had the acquisitions been made as of
December 4, 1995.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany balances and
transactions have been eliminated from the consolidated financial statements.
The minority interests represent the separate ownership of A&S Electric s.r.o.,
Czech Republic (A&S) (40% in 1996 and up to September 1997, 2% thereafter), Alba
Technology (M) Sdn. Bdn., Malaysia (30% in 1996 and 1997), and Schott CML
Fiberoptics L.L.C. (49% in 1997).

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

FISCAL YEAR

In January 1998, the Company changed its financial reporting year-end to the
Sunday nearest to December 31 of each year. Previously, the fiscal year ended
the Sunday nearest December 1.


                                                                               9

<PAGE>   18

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

INVESTMENTS

Management determines the appropriate classification of investments at the time
of purchase and reevaluates such designation as of each balance sheet date.
Investments are classified as held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity. Held-to-maturity
securities are stated at cost adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization and accretion is included
in interest expense, net.

INVENTORIES

Inventories are stated at the lower cost, determined by the first in, first out
(FIFO) method, or market. Inventories consist of the following (dollars in
thousands):

<TABLE>
<CAPTION>
                                              NOVEMBER 30       DECEMBER 1 
                                                  1997             1996
                                            ---------------------------------

         <S>                                <C>                 <C>     
         Raw materials                         $ 28,262          $ 7,240
         Work in process                         14,693            5,916
         Finished goods                          81,131            3,030
                                            =================================
                                               $124,086          $16,186
                                            =================================
</TABLE>

PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are stated at cost. The Company provides for
depreciation using the straight-line method over the following estimated useful
lives:

<TABLE>
           <S>                                                    <C>        
           Buildings and improvements                             25-39 years
           Machinery and equipment                                12-25 years
           Molds                                                  10-20 years
           Furniture and fixtures                                  5-10 years
</TABLE>

Leasehold improvements are amortized on a straight-line basis over the shorter
of the estimated useful lives of the assets or the remaining lease term.


10

<PAGE>   19

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

GOODWILL

Goodwill represents the excess of the purchase price over the fair value of
identifiable net assets acquired related to the business acquisitions described
in Note 1. Goodwill is amortized on a straight-line basis over 40 years.
Accumulated amortization is approximately $593,000 and $377,000 at November 30,
1997 and December 1, 1996, respectively. Amortization expense was approximately
$216,000, $200,000, and $53,000, for the years ended November 30, 1997, December
1, 1996, and December 3, 1995, respectively. The Company assesses recoverability
from future operations using income from operations of the related acquired
business as a measure. Under this approach, the carrying value of goodwill would
be reduced to the amount of estimated undiscounted cash flows if it becomes
probable that the Company's best estimate for expected undiscounted future cash
flows of the related business would be less than the carrying amount of goodwill
over its remaining amortization period. There have been no adjustments to the
carrying amounts of goodwill resulting from these evaluations. 

OTHER INTANGIBLE ASSETS

Other intangible assets include the fair value of engineering technology,
patents, noncompete, and other agreements related to the business acquisitions
described in Note 1. The intangibles are being amortized using the straight-line
method over their respective useful lives or contract periods, which range from
3 to 25 years. Accumulated amortization is approximately $2,290,000 and
$1,810,000 at November 30, 1997 and December 1, 1996, respectively. Amortization
expense was approximately $480,000, $392,000, and $380,000 for the years ended
November 30, 1997, December 1, 1996, and December 3, 1995, respectively.

WARRANTY COSTS

PLP provides a limited warranty on all of its products. The warranty period is
two years from the date of manufacture for magnetic ballasts and five years
(three years prior to June 1994) from the date of manufacture for electronic
ballasts. Under the terms of the warranty policy, PLP will replace any ballast
that fails during the warranty period. Provision for the estimated warranty
costs is made in the period in which such costs become probable. As a result of
the change in the length of the warranty period in 1994 and changes in the
product design, PLP has limited history for electronic ballasts from which
warranty costs may be estimated. It is therefore reasonably possible that actual
warranty costs may differ from the amount accrued in the accompanying balance
sheet, however, an estimate of any additional possible loss cannot be made. 


                                                                              11

<PAGE>   20

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

TREASURY STOCK

In February 1997, the board of directors authorized, subject to certain business
and market conditions, the repurchase of shares of the Company's stock. At
November 30, 1997, a total of 643,345 shares have been repurchased.

FINANCIAL INSTRUMENTS

The Company uses derivative financial instruments to reduce its exposure to
adverse fluctuations in interest and foreign exchange rates. Financial
instruments are not used for trading purposes.

The Company and its subsidiaries utilize forward foreign currency exchange
contracts to minimize the impact of currency movements, principally on
anticipated intercompany inventory purchases and loans denominated in currencies
other than their functional currencies.

The Company may enter into interest rate swap agreements to limit the effect of
increases in the interest rates on any floating rate debt. The differential is
accrued as interest rates change and is recorded in interest expense. Upon
termination of interest rate swap agreements any resulting gain or loss is
recognized over the remaining term of the underlying debt obligation.

REVENUE RECOGNITION

Revenues from product sales are recognized at the time of shipment.

RESEARCH AND DEVELOPMENT

Research and development costs are charged to operations in the year incurred
and totaled $1,926,000 in 1997. The costs incurred in 1996 and 1995 were not
material.

INCOME TAXES

Deferred income taxes are recognized based on the expected future tax
consequences of differences between the financial statement and tax bases of
assets and liabilities, calculated using enacted tax rates in effect for the
year in which the differences are expected to be reflected in the tax return.


12

<PAGE>   21

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FOREIGN CURRENCY TRANSLATION

Transactions arising in foreign currencies have been translated at rates of
exchange in effect at the dates of the transactions. Gains or losses during the
year have been included in net income. Assets and liabilities of foreign
affiliates are translated at current exchange rates, and income statement
accounts are translated at the average rates during the period. Related
translation adjustments are reported as a component of stockholders' equity.

STOCK SPLITS AND RECAPITALIZATION

The Company effected a 99-for-1 recapitalization on December 1, 1994, and a
stock split effected in the form of a dividend of 0.716-for-1 in February 1995.
On August 5, 1996, the Company approved a three-for-two stock split of its
outstanding common stock to be effected in the form of a 50% stock dividend. The
dividend was paid on August 27, 1996, to shareholders of record August 16, 1996.

On February 11, 1998, the Company approved a three-for-two stock split of its
outstanding common stock to be effected in the form of a 50% stock dividend. The
dividend is to be paid on March 6, 1998 to shareholders of record February 23,
1998.

All share and per share data have been adjusted to reflect these stock splits
and recapitalization as of the earliest period presented.

STOCK-BASED COMPENSATION

Stock-based compensation awards are accounted for under APB Opinion No. 25
Accounting for Stock Issued to Employees. In October 1995, Statement of
Financial Accounting Standards No. 123 (FASB No. 123), Accounting for
Stock-Based Compensation was issued. FASB No. 123 establishes an alternative
method of accounting for stock-based employee compensation plans (Note 10).



                                                                              13

<PAGE>   22

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)




2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EARNINGS PER COMMON SHARE

Pursuant to certain Securities and Exchange Commission requirements, earnings
per common share have been computed giving retroactive effect to the stock
dividends and recapitalization described above.

In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings Per Share, which is required to be adopted by the Company in
fiscal 1998. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior periods.
Under the new requirements for calculating earnings per share, the dilutive
effect of stock options will be excluded from basic earnings per share, but
included in the computation of diluted earnings per share. The Company has
historically excluded the dilutive effect of common stock equivalents in the
calculation of primary and fully diluted earnings per share as the effect has
been less than 3%. As such, basic earnings per share under the new standard will
remain unchanged from primary earnings per share. The impact on diluted earnings
per share for the year ended November 30, 1997 is not expected to be material.

SEGMENT REPORTING

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information (Statement 131), which is effective for years
beginning after December 15, 1997. Statement 131 establishes standards for the
way that public business enterprises report information about operating segments
in annual financial statements and requires that those enterprises report
selected information about operating segments in interim financial reports. It
also establishes standards for related disclosures about products and services,
geographic areas, and major customers. Statement 131 is effective for financial
statements for fiscal years beginning after December 15, 1997, and therefore the
company will adopt the new requirements retroactively in 1998. Management has
not completed its evaluation of Statement 131, but does not anticipate that the
adoption of this statement will have a significant effect on the Company's
reported segments.

RECLASSIFICATIONS

Certain amounts in the 1996 and 1995 financial statements have been reclassified
to conform with the 1997 presentation.


14

<PAGE>   23

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



3.  PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consists of the following:
<TABLE>
<CAPTION>
                                                  NOVEMBER 30     DECEMBER 1
                                                      1997           1996
                                                -------------------------------
                                                   (Dollars in Thousands)

<S>                                             <C>               <C>     
Land                                                $  8,051        $ 2,857
Buildings and improvements                            66,726         13,114
Machinery and equipment                              189,748         35,074
Molds                                                 10,662          5,999
Furniture and fixtures                                 6,493            747
                                                -------------------------------
                                                     281,680         57,791
Less:  Accumulated depreciation                       12,030          5,640
                                                ===============================
                                                    $269,650        $52,151
                                                ===============================
</TABLE>

4.  DEBT

Debt consists of the following:
<TABLE>
<CAPTION>
                                                      NOVEMBER 30   DECEMBER 1 
                                                        1997           1996
                                                     ----------------------------
                                                       (Dollars in Thousands)

<S>                                                  <C>             <C>    
Operating revolving credit loan, 
  due October 30, 1998, 
  unless extended, interest
  payable monthly at LIBOR plus 2.25%,
  repaid in 1997                                      $      -        $ 3,636
Short-term notes denominated in 
  Japanese yen due August and
  November 1997                                              -         21,560
Acquisition and other revolving 
  credit loans, due August 31,
  2002, variable interest payable quarterly            183,375              -
Note payable to bank, due in full in 
  1998, interest payable
  monthly at LIBOR plus 1.5%                             8,418              -
Acquisition loan, due October 30, 1998, 
  unless extended, interest
  payable at LIBOR plus 2.25%, repaid in 1997                -          1,893
                                                             
Other loans, due in monthly installments 
  plus interest at rates
  of 4.8% to 8.0%                                        8,462          2,786
Lines of credit with interest payable 
  monthly at average rate of
  7.5%, repaid in 1997                                       -            906
                                                   -----------------------------
                                                       200,255         30,781
Less:  Current portion                                  14,821         25,174
                                                   =============================
                                                      $185,434        $ 5,607
                                                   =============================
</TABLE>

                                                                              15


<PAGE>   24
       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


4.  DEBT (CONTINUED)

On September 8, 1997, the Company entered into a $250,000,000 credit agreement
that provides for acquisition loans, a maximum of $15,000,000 under letters of
credit and bankers' acceptances, revolving loans, and a maximum of $10,000,000
in swing loans. Borrowings under this agreement, which expires August 31, 2002,
totaled $183,375,000 at November 30, 1997. The U.S. dollar loans bear interest
at LIBOR (6.03% at November 30, 1997) plus a margin or prime (8.5% at November
30, 1997) plus a margin, payable quarterly. Foreign-denominated loans bear
interest at local spot rates. The interest rate margin (1.5% for LIBOR loans and
 .5% for prime loans at November 30, 1997) fluctuates based on the Company's
leverage ratio. The agreement provides for a quarterly commitment fee (.25% to
 .375%), based on the Company's leverage ratio. Mandatory prepayments are
required upon the occurrence of certain events, as defined in the agreement.

The credit agreement is secured by substantially all the Company's assets and
requires the Company to comply with a number of affirmative and negative
covenants. Among other things, the credit agreement requires the Company to
satisfy certain financial tests and ratios and restricts the payment of cash
dividends.

At November 30, 1997, long-term debt includes $18,977,000 denominated in
Deutsche Marks and $3,311,000 denominated in Belgian Francs under the credit
agreement. The Deutsche Mark loan bears interest at 5.35% per annum and the
Belgian Franc loan bears interest at 5.40% per annum. The amounts outstanding at
November 30, 1997, have been adjusted based on the exchange rate at that date
and an unrealized gain of $401,000 has been recorded.

The Company uses interest rate swaps to reduce the impact on interest expense of
fluctuating interest rates on its variable rate debt (Note 13).

Interest expense was $5,238,000, $936,000, and $1,155,000 for the years ended
November 30, 1997, December 1, 1996 and December 3, 1995, respectively.

As of November 30, 1997, annual debt principal payments required were as follows
(dollars in thousands):

<TABLE>
         <S>                                                   <C>     
         1998                                                  $ 14,821
         1999                                                     1,000
         2000                                                       191
         2001                                                       191
         2002                                                   183,566
         Thereafter                                                 486
                                                               --------
                                                               $200,255
                                                               ========
</TABLE>



16

<PAGE>   25

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



5.  INCOME TAXES

The following is a summary of income before income taxes (dollars in thousands):

<TABLE>
<CAPTION>
                                                YEAR ENDED
                           NOVEMBER 30          DECEMBER 1           DECEMBER 3
                              1997                 1996                 1995
                           -----------------------------------------------------

<S>                        <C>                  <C>                  <C>     
Domestic operations            $14,005            $ 9,280             $ 8,289
Foreign operations              14,527             10,185               3,169
                           =====================================================
                               $28,532            $19,465             $11,458
                           =====================================================
</TABLE>

The following is a summary of the provision for income taxes (dollars in
thousands):

<TABLE>
<CAPTION>
                                               YEAR ENDED
                           NOVEMBER 30         DECEMBER 1           DECEMBER 3
                              1997                1996                1995
                           -----------------------------------------------------
<S>                        <C>                 <C>                 <C>     
Federal:
   Current                    $7,729             $3,082              $2,278
   Deferred                   (3,002)               632                  77
                           -----------------------------------------------------
                               4,727              3,714               2,355
State:
   Current                     1,005                425                 408
   Deferred                     (413)               (49)                (26)
                           -----------------------------------------------------
                                 592                376                 382
Foreign:
   Current                     1,951              1,615                 152
   Deferred                      321                324                 104
                           -----------------------------------------------------
                               2,272              1,939                 256
                           =====================================================
                              $7,591             $6,029              $2,993
                           =====================================================
</TABLE>

The Company's manufacturing facility in Costa Rica is operated under a tax
holiday, which expires in 2005. The impact of this tax holiday was an increase
to net income of $1,393,000 or $.05 per share for the year ended November 30,
1997, $1,309,000 or $.05 per share for the year ended December 1, 1996, and
$742,000 or $.04 per share for the year ended December 3, 1995.



                                                                              17

<PAGE>   26

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



5.  INCOME TAXES (CONTINUED)

A reconciliation between the provision for income taxes computed at statutory
rates and the amount reflected in the accompanying consolidated statements of
operations is as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                                    NOVEMBER 30       DECEMBER 1        DECEMBER 3
                                                       1997              1996              1995
                                                    -----------------------------------------------
<S>                                                 <C>               <C>              <C>   
 Computed federal tax provision at 
   statutory rates                                    $9,986            $6,618           $3,896
 Increase (decrease) in taxes resulting from:
     Amortization of goodwill                             86                35               24
     Nonstatutory stock options                         (185)                -                -
     State income taxes, net of federal benefit          396               205              252
     Effect of different income taxes of other
       countries                                        (573)           (1,484)            (841)
     Utilization of net operating loss
       carryforwards                                  (2,211)                -                -
     Other                                                92               655             (338)
                                                    ===============================================
                                                      $7,591            $6,029           $2,993
                                                    ===============================================
</TABLE>

The significant items comprising deferred tax liabilities are as follows
(dollars in thousands):

<TABLE>
<CAPTION>
                                                           NOVEMBER 30      DECEMBER 1
                                                               1997           1996
                                                           -----------------------------
<S>                                                        <C>             <C>    

Assets:
   Net operating loss carryforwards                           $46,065       $     -
   Reserves                                                     5,181           217
   Other                                                          416           322
                                                           -----------------------------
  Total assets                                                 51,662           539

 Liabilities:
   Differences between book and tax
      bases of depreciable assets                              (9,984)       (5,873)
   Other                                                       (2,383)         (782)
                                                           -----------------------------
 Total liabilities                                            (12,367)       (6,655)
                                                           -----------------------------
                                                               39,295        (6,116)
 Less:  Valuation allowance for net operating loss
   carryforwards                                              (44,827)            -
                                                           =============================
 Net deferred tax liabilities                                 $(5,532)      $(6,116)
                                                           =============================
</TABLE>

SLI had net operating loss (NOL) carryforwards for tax purposes of approximately
$144,806,000 at September 1, 1997. The valuation allowance originated


18

<PAGE>   27

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


5.  INCOME TAXES (CONTINUED)

in 1997 upon the acquisition of SLI (see Note 1) and has been reduced through
the utilization of NOL carryforwards of $2,211,000. SLI has NOL carryforwards
for tax purposes of approximately $135,977,000 at November 30, 1997, of which
approximately $37,900,000 expire through 2007 and $98,077,000 do not expire.
Approximately 25% of these NOL carryforwards relate to operations in France
(which expire through 2002), approximately 25% relate to operations in Belgium
(which do not expire) and the remaining NOL carryforwards relate to operations
in various other tax jurisdictions outside the United States.

Bruckner had NOL carryforwards for tax purposes of approximately $1,906,000 at
January 7, 1997 (see Note 1). Bruckner has NOL carryforwards for tax purposes of
approximately $2,295,000 at November 30, 1997, which do not expire.

The expiration dates of operating loss carryforwards at November 30, 1997 are as
follows (dollars in thousands):

 <TABLE>
<S>                                                           <C>
1998........................................................  $  5,044
1999........................................................     7,962
2000........................................................     2,757
2001........................................................     1,245
2002........................................................       770
No expiration date..........................................   120,494
                                                              --------
                                                              $138,272
                                                              ========
</TABLE>

Tax benefits subsequently realized which are related to deferred tax assets with
a valuation allowance recorded in connection with a business acquisition will
first reduce goodwill and other non-current intangible assets related to the
acquisition to zero and any remaining tax benefit will be accounted for in the
current statement of operations.

6.  ACCRUED EXPENSES

Accrued expenses consist of the following (dollars in thousands):

<TABLE>
<CAPTION>
                                             NOVEMBER 30         DECEMBER 1
                                                1997                1996
                                             ------------------------------

         <S>                                 <C>                 <C>      
         Payroll and related expenses          $ 27,596            $   319
         Warranty and customer rebates           27,036                  -
         Restructuring expenses                  17,147                  -
         Value-added taxes payable                7,249                  -
         Other                                   28,588             12,588
                                             ------------------------------
                                               $107,616            $12,907
                                             ==============================
</TABLE>

7.  OTHER LONG-TERM LIABILITIES

Other long-term liabilities consist of the following:
<TABLE>
<CAPTION>
                                             NOVEMBER 30         DECEMBER 1
                                                1997                1996
                                             ------------------------------

         <S>                                 <C>                 <C>      
         Pension                                $18,240             $    -
         Restructuring expenses                  18,831                  -
         Other                                   24,966              1,542
                                             ==============================
                                                $62,037             $1,542
                                             ==============================
</TABLE>


                                                                              19

<PAGE>   28
       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


8.  RESTRUCTURING

In fiscal 1997, the Company approved restructuring plans in connection with
existing operations, which resulted in charges of approximately $5.1 million.
The restructuring included the plant closure, personnel termination, and asset
liquidation of the lamp-making operation of CML Europe, which became redundant
due to the SLI B.V. acquisition. The facility's land and building was sold, and
the equipment was sold or scrapped. Employee severance cost at the Company's
Badalex (U.K.) machinery making operation resulted from the downsizing due to
the duplication of functions after the SLI B.V. acquisition. Additionally, the
Company's leased Illinois warehouse and distribution location was closed and
personnel were terminated. Also, the Company's Oklahoma manufacturing operation
was considered redundant in light of the SLI B.V. acquisition and the lamp
making equipment was disposed.

Severance costs of $3.5 million relate to the elimination of redundancies of 92
employees at CML Europe, 67 employees at Badalex (U.K.) and 23 employees
at the Illinois location.

Noted below are the restructuring charge components for existing operations as 
of November 30, 1997.
 
<TABLE>
<CAPTION>
                                                                     Remaining
                                     Total          Incurred       Restructuring
                                 Restructuring       Charges          Charge
                                     Charge          to-date         Available
                                 -------------      ---------      -------------
<S>                              <C>               <C>             <C> 
Severance costs                    $3,490,000      $1,890,000       $1,600,000
Disposal of land and building         200,000         200,000               --

Loss on liquidation of 
  redundant fixed assets            1,410,000       1,410,000               --
                                   ----------      ----------       ----------
                                   $5,100,000      $3,500,000       $1,600,000
</TABLE>

In addition to the above, in fiscal 1997, the Company approved a restructuring
plan as part of the SLI B.V. acquisition, effective September 1, 1997, which
resulted in reorganization accruals of $25.0 million. The liabilities were
recorded as part of the purchase accounting for SLI B.V. and included the
following:

i.    Severance costs of $16.8 million are related to the termination of 244
      employees in Europe, 260 employees in Latin America, 20 employees in
      Australia and 23 employees in Asia. Approximately, $600,000 of severance
      cost was paid as of November 30, 1997.

ii.   Involuntary relocation costs of SLI B.V., the acquired entity, total $2.1 
      million.

iii.  Costs of $6.1 million are associated with the closure of leased warehouse
      and administrative facilities. These costs represent remaining payments on
      non-cancelable operating leases (which expire in year 2000), costs to
      return the facilities to the condition at the outset of the lease, and the
      write-off of the remaining net book value of leasehold improvements.
      Accrued lease costs are for costs to be incurred subsequent to the Company
      vacating the facilities. The warehouse closures will occur in France,
      Belgium and Scandinavia and the administrative office closures will occur
      in Switzerland, France, Austria and Benelux. As of November 30, 1997,
      there was no utilization of this accrual. 

9.  COMMITMENTS

LEASES

The Company leases certain facilities and equipment under operating lease and
sublease agreements that expire at various dates from the current year to 2010.
As of November 30, 1997, the aggregate minimum future commitments under
operating leases are as follows (dollars in thousands):

<TABLE>
         <S>                                          <C>    
         1998                                         $ 5,277
         1999                                           4,292
         2000                                           3,020
         2001                                           2,317
         2002                                           1,813
         Thereafter                                     4,977
                                                      ========
                                                      $21,696
                                                      ========
</TABLE>

Rent expense for the years ended November 30, 1997, December 1, 1996, and
December 3, 1995, was $2,846,000, $948,000 and $593,000, respectively.

20
<PAGE>   29

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



10.  STOCK OPTION PLAN

In January 1995, the Company's Board of Directors approved a stock option plan
for up to 675,000 shares (amended to 3,000,000 shares on July 2, 1997) of common
stock. The plan provides for the granting of both incentive stock options (as
defined in section 422 of the Internal Revenue Code) and nonqualified stock
options. Options may be granted under the plan on such terms and at such prices
as determined by the Board of Directors, except that the per share exercise
price of incentive stock options cannot be less than the fair market value of
the common stock on the date of grant. Each option will be exercisable after the
period or periods specified in the option agreement, but no option may be
exercisable after the expiration of 10 years from the date of grant.

In September 1997, the Board of Directors approved the Special 1997 Stock Option
Plan for up to 3,000,000 shares of common stock. The plan provides for the
granting of incentive stock options to employees outside the U.S. and Canada and
certain other persons. The Board of Directors may determine the terms and prices
of each grant, except that no option may be exercisable after the expiration of
10 years from the date of grant. The Board granted options for 2,026,500 shares
under this plan in September 1997.

The Company has elected to follow APB No. 25 and related interpretations in
accounting for its employee stock options because, as discussed below, the
alternative fair value accounting provided for under FASB No. 123 requires use
of option valuation models that were not developed for the use in valuing
employee stock options. Pro forma information regarding net income is required
by FASB No. 123, which also requires that the information be determined as if
the Company had accounted for the employee stock options granted subsequent to
December 3, 1995, under the fair value method of that Statement. The fair value
for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions for the
years ended November 30, 1997 and December 1, 1996, respectively: risk-free
interest rates of 6.1% and 6.5%; no dividend yield; and a weighted-average
expected life of the option of 7 years. The volatility factor was assumed to be
0.3.



                                                                              21

<PAGE>   30

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



10.  STOCK OPTION PLAN (CONTINUED)

The Black-Scholes option valuation model was developed for the use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
option, the existing models do not necessarily provide a reliable single measure
of the fair value of its employee stock options.

For purposes of the pro forma disclosures, the estimated fair value of the
options is amortized to expense over the vesting period of the respective
option. Because FASB No. 123 is applicable only to options granted subsequent to
December 3, 1995, its pro forma impact will not be fully reflected until 2000.
The Company's pro forma net income and pro forma net income per share on a
historical basis would be $18,248 and $.63 and $13,039 and $.54 and $8,174 and
$.39 for the years ended November 30, 1997, December 1, 1996, and December 3,
1995, respectively.

The table below summarized option activity through November 30, 1997:

<TABLE>
<CAPTION>
                                                                                WEIGHTED-
                                                               RANGE OF          AVERAGE
                                                NUMBER OF      EXERCISE         EXERCISE
                                                 OPTIONS        PRICES            PRICE  
                                                -----------------------------------------
<S>                                             <C>          <C>               <C>   
Outstanding at November 27, 1994                        -                 -           -
Options granted during 1995                       517,500    $  5.555-7.889    $  6.471
                                                ---------

Outstanding at December 3, 1995                   517,500       5.555-7.889       6.471
Options granted during 1996                       339,750      9.111-15.554      13.257
Options exercised during 1996                    (116,391)      5.555-7.167       6.440
Options canceled during 1996                     (198,752)      5.555-9.111       7.568
                                                ---------

Outstanding at December 1, 1996                   542,107      5.555-15.554      10.328
Options granted during 1997                     3,086,700     12.917-18.667      17.810
Options exercised during 1997                    (111,606)     5.555-12.667       8.449
Options canceled during 1997                      (61,425)    12.667-18.667      14.165
                                                =========
Outstanding at November 30, 1997                3,455,776      5.555-18.667      17.003
                                                =========
</TABLE>

     Information with respect to stock options outstanding and stock options
exercisable at November 30, 1997, is as follows:

<TABLE>
<CAPTION>
                                                                OPTIONS OUTSTANDING
                                                     ------------------------------------------
                                                                    WEIGHTED
                                                                     AVERAGE
                                                       NUMBER       REMAINING       WEIGHTED
RANGE OF                                             OUTSTANDING   CONTRACTUAL      AVERAGE
EXERCISE PRICES                                      AT 11/30/97      LIFE       EXERCISE PRICE
---------------                                      -----------   -----------   --------------
<S>                                                  <C>           <C>           <C>
$ 5.555 -  7.889...................................     193,077     7.6 years       $ 6.051
  9.111 - 13.333...................................     274,500     9.1              12.466
 15.167 - 18.667...................................   2,988,199     9.6              18.127
                                                      ---------
                                                      3,455,776
                                                      =========
</TABLE>

<TABLE>
<CAPTION>
                                                                  OPTIONS EXERCISABLE
                                                              ----------------------------
                                                                NUMBER         WEIGHTED
RANGE OF                                                      EXERCISABLE      AVERAGE
EXERCISE PRICES                                               AT 11/30/97   EXERCISE PRICE
---------------                                               -----------   --------------
<S>                                                           <C>           <C>
$ 5.555 -  7.889............................................    148,117        $ 6.203
  9.111 - 13.333............................................    139,500         11.680
 15.167 - 18.667............................................     68,148         15.737
                                                                -------
                                                                355,765
                                                                =======
</TABLE>



22

<PAGE>   31
       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



11.  EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT PLANS

The Company sponsors separate noncontributory, defined-benefit pension plans
(the Plans) covering eligible employees, including employees in foreign
countries. The domestic plans cover union employees of Chicago Miniature Lamp,
Inc. (formerly Industrial Devices, Inc.) and substantially all employees of
Fredon. As a result of the SLI acquisition in 1997, the Company also has plans
covering employees in various foreign locations. The principal locations are
Germany, the United Kingdom, and Switzerland. Benefits are based on years of
service and compensation. The Plans' 1997 and 1996 combined funded status (based
on the most recent valuations) and the amounts recognized in the accompanying
consolidated balance sheets are as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                           NOVEMBER 30    DECEMBER 1
                                                              1997           1996
                                                           --------------------------
<S>                                                        <C>            <C>   

Actuarial present value of benefit obligations:
   Vested benefits                                           $ 49,099       $1,094
   Nonvested benefits                                           2,143          117
                                                           --------------------------
Accumulated benefit obligation                                 51,242        1,211
 Effect of future salary increases                              5,762           57
                                                           --------------------------
Projected benefit obligation                                   57,004        1,268
Plan assets at fair value, primarily 
   common stocks and fixed
   income securities                                           41,879        1,063
                                                           --------------------------
Plan assets less than projected benefit obligation            (15,125)        (205)
Unrecognized transition amount                                     75           80
Unrecognized net (gain) loss                                    1,196          141
Unamortized prior service cost                                     14           16
                                                           ==========================
(Accrued) prepaid pension cost                               $(13,840)      $   32
                                                           ==========================
</TABLE>

The components of net periodic pension cost for the significant locations are as
follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                              YEAR ENDED
                                                --------------------------------------
                                                NOVEMBER 30    DECEMBER 1   DECEMBER 3
                                                   1997           1996         1995
                                                --------------------------------------

<S>                                             <C>            <C>          <C>  
Service cost                                     $  608          $ 44          $ 99
Interest cost on projected benefit obligation
                                                  1,149            81            67
Actual return on plan assets                       (814)          (63)          (71)
Net amortization and deferral                         -            (7)           12
                                                ======================================
Net pension cost                                 $  943          $ 55          $107
                                                ======================================

</TABLE>

                                                                              23

<PAGE>   32

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



The assumptions used for the significant locations were as follows:

<TABLE>
<CAPTION>
                                               1997                1996               1995
                                           ---------------------------------------------------
                                                               (U.S. only)         (U.S. only)
<S>                                        <C>                 <C>                 <C> 
Discount rate used to determine present
   value of the projected benefit
   obligations                             4.5% to 7.5%        6.5% to 7.5%           7.5%
Expected long-term rate of return 
   on assets                               5.0% to 8.5%        6.5% to 9.0%           9.0%
Assumed rate of increase in future
   compensation levels                     2.5% to 5.0%            5.0%               5.0%
</TABLE>

Alba and Bruckner also maintain defined benefit plans with benefit obligations
of approximately $4.4 million and $3.2 million at November 30, 1997 and December
1, 1996, respectively. The pension expense for these plans, consisting primarily
of interest cost, for the periods ended November 30, 1997 and December 1, 1996
was $344,000 and $124,000. The Alba plan was suspended in 1996.

DEFINED CONTRIBUTION PLANS

The Company sponsors a number of defined contribution plans. Participation in
these plans is available to all U.S. non-union employees and employees in
various other countries. Company contributions to these plans are based on
either a percentage of employee contributions or on a specified amount per hour
based on the provisions of each plan. The Company's expense under these plans
was approximately $650,000, $38,000, and $41,000 for the years ended November
30, 1997, December 1, 1996 and December 3, 1995, respectively.

12.  CAPITAL STOCK

In December 1996, the Company amended its Articles of Incorporation to increase
the authorized shares of common stock to 100,000,000 shares.

At November 30, 1997, 5,772,003 shares of common stock have been reserved for
future issuance upon the exercise of stock options.



24

<PAGE>   33

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



13.  FAIR VALUE OF FINANCIAL INSTRUMENTS

Interest Rate Risk Management

The Company uses interest rate swaps to reduce the impact on interest expense of
fluctuating interest rates on its variable rate debt. Under the Company's
interest rate swap agreement, the Company agreed with the counterparty to
exchange, at quarterly intervals, the difference between the Company's fixed pay
rate and the counterparty's variable pay rate of three-month LIBOR. At November
30, 1997, the notional principal amounts of fixed interest rate swap agreements
was $40 million having a fixed rate of 5.82%.

In connection with the interest swap agreement, the Company sold an option to
the counterparty whereby the counterparty may terminate the swap agreement on
January 29, 1999. The fair value of the option at November 30, 1997, was
estimated to be approximately $388,000.

Foreign Exchange Risk Management

The Company hedges certain foreign currency transactions and firm foreign
currency commitments by entering into forward exchange contracts (forward
contracts). Gains and losses associated with currency rate changes on forward
contracts hedging foreign currency transactions are recorded currently in
income. Gains and losses on forward contracts hedging firm foreign currency
commitments are deferred off-balance sheet and included as a component of the
related transaction, when recorded; however, a loss is not deferred if deferral
would lead to the recognition of a loss in future periods. The aggregate foreign
exchange gains recorded in 1997 and 1996 were approximately $1,664,000 and
$1,283,000, respectively and have been included in other income.

The forward contracts have maturities of one to 12 months. The counterparties to
the Company's forward contracts consist of a number of major international
financial institutions. The credit ratings and concentration of risk of these
financial institutions are monitored on a continuing basis and management
believes they present no significant credit risk to the Company.

The following table summarizes by major currency the contractual amounts of 
the Company's forward contracts in U.S. dollars. Foreign currency amounts are
translated at year-end rates at the respective reporting date. The "buy" amounts
represent the U.S. equivalent of commitments to purchase foreign currencies and
the "sell" amounts represent the U.S. equivalent of commitments to sell foreign
currencies. Some of the forward contracts involve the exchange of two foreign
currencies according to local needs in foreign subsidiaries.

At November 30, 1997 and December 1, 1996, the contractual amounts were:

<TABLE>
<CAPTION>
                                                         NOVEMBER 30,       DECEMBER 1,
                                                             1997              1996
                                                       ----------------   ---------------
                                                         BUY      SELL     BUY      SELL
                                                       -------   ------   ------   ------
                                                             (DOLLARS IN THOUSANDS)
<S>                                                    <C>       <C>      <C>      <C>
Belgian francs.......................................  $ 6,170   $   --   $   --   $   --
Deutsche marks.......................................    8,759       --       --       --
French francs........................................    2,516       --       --       --
Swiss francs.........................................    2,179    1,236       --       --
U.S. dollars.........................................    4,695       --       --       --
Other................................................    3,290       --    8,000       --
                                                       -------   ------   ------   ------
                                                       $27,609   $1,236   $8,000   $   --
                                                       =======   ======   ======   ======
</TABLE>




                                                                              25

<PAGE>   34

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)
 


13.  FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts receivable,
short-term borrowings, accounts payable, and accruals are a reasonable estimate
of their fair value due to the short-term nature of these instruments. The
Company's domestic long-term borrowings have variable interest rates and
carrying value approximates fair value at November 30, 1997. The following table
summarizes the estimated fair value of the Company's remaining financial
instruments at November 30, 1997 and December 1, 1996 (dollars in thousands):

<TABLE>
<CAPTION>
                                                        1997                          1996
                                              -----------------------------------------------------
                                              CARRYING         FAIR         CARRYING         FAIR
                                               AMOUNT          VALUE         AMOUNT          VALUE
                                              -----------------------------------------------------
<S>                                            <C>            <C>            <C>            <C>    
ASSETS
Foreign currency forward contracts             $  (657)       $  (681)       $     -        $ 7,801
Short-term Yen-denominated loans                     -              -         21,560         21,560
Long-term foreign denominated loans
                                                22,289         22,289              -              -
</TABLE>

14.  SELECTED QUARTERLY FINANCIAL DATA

The following is a summary of unaudited quarterly financial data for the fiscal
years ended November 30, 1997 and December 1, 1996.


<TABLE>
<CAPTION>
                                   FIRST         SECOND         THIRD          FOURTH 
                                  QUARTER        QUARTER       QUARTER         QUARTER
                                  ------------------------------------------------------
                                      (In Thousands, Except Per Share Data)
<S>                               <C>            <C>            <C>           <C>     
1997
Net sales                         $34,130        $51,861        $45,826       $198,142
Gross margin                       10,043         14,645         13,898         59,440
Net income                          4,985          4,811          3,184          7,961
Net income per common share           .17            .17            .11            .28

1996
Net sales                         $19,401        $22,126        $25,091        $27,553
Gross margin                        6,520          7,764          8,682         10,058
Net income                          2,471          2,903          3,106          4,956
Net income per common share           .11            .12            .13            .19
</TABLE>


26
<PAGE>   35

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


15.  GEOGRAPHIC SEGMENT INFORMATION

Prior to February 1995, the Company's operations were solely in the United
States. As described in Note 1, the Company made acquisitions during fiscal 1995
in Canada, the United Kingdom, and commenced operations in Costa Rica and during
fiscal 1996 in Germany. The SLI acquisition in fiscal 1997 expanded operations
of the Company to include Western Europe, Latin America, and Australia.

Financial information as of and for the years ended November 30, 1997, December
1, 1996, and December 3, 1995, summarized by geographic area, is as follows 
(dollars in thousands):
<TABLE>
<CAPTION>
                             UNITED                                      ASIA          LATIN
                             STATES        CANADA         EUROPE        PACIFIC       AMERICA    ELIMINATIONS  CONSOLIDATED
                            -----------------------------------------------------------------------------------------------
                                                                 (Dollars in Thousands)
<S>                         <C>           <C>            <C>           <C>           <C>         <C>           <C>     
1997
TOTAL REVENUES
Unaffiliated customers      $129,120      $ 14,605       $135,719      $ 15,621      $ 34,894      $     --       $329,959
Interarea transfers               --           105          9,956           112         1,718       (11,891)            --
                            ----------------------------------------------------------------------------------------------
Total                       $129,120      $ 14,710       $145,675      $ 15,733      $ 36,612      $     --       $329,959
                            ==============================================================================================

Income from operations      $  8,582      $  3,039       $  6,880      $  1,145      $  7,716      $     --       $ 27,362
                            ==============================================================================================

ASSETS
Identifiable assets         $107,228      $ 10,459       $429,418      $ 32,602      $ 51,405      $     --       $631,112
Corporate assets              20,549            --             --            --            --            --         20,549
                            ----------------------------------------------------------------------------------------------
Total assets                $127,777      $ 10,459       $429,418      $ 32,602      $ 51,405      $     --       $651,661
                            ==============================================================================================

1996
TOTAL REVENUES
Unaffiliated customers      $ 49,843      $ 13,084       $ 22,801      $     --      $  8,443      $     --       $ 94,171
Interarea transfers              203           (53)         2,894            --            --        (3,044)            --
                            ----------------------------------------------------------------------------------------------
Total                       $ 50,046      $ 13,031       $ 25,695      $     --      $  8,443      $ (3,044)      $ 94,171
                            ==============================================================================================

Income from operations      $  7,038      $  2,683       $  4,574      $     --      $  4,177      $     --       $ 18,472
                            ==============================================================================================

ASSETS
Identifiable assets         $ 41,255      $  9,887       $ 50,080      $     --      $ 11,314            --        112,536
Corporate assets              99,466            --             --            --            --            --         99,466
                            ----------------------------------------------------------------------------------------------
Total assets                $140,721      $  9,887       $ 50,080      $     --      $ 11,314      $     --       $212,002
                            ==============================================================================================
</TABLE>


27
<PAGE>   36

       SLI, Inc. (formerly Chicago Miniature Lamp, Inc.) and Subsidiaries

             Notes to Consolidated Financial Statements (continued)



15.  GEOGRAPHIC SEGMENT INFORMATION (CONTINUED)

<TABLE>
<CAPTION>
                            UNITED                                   ASIA            LATIN
                            STATES       CANADA        EUROPE       PACIFIC         AMERICA    ELIMINATIONS  CONSOLIDATED
                            ---------------------------------------------------------------------------------------------
                                                                             (Dollars in Thousands)
1995
TOTAL REVENUES
<S>                         <C>          <C>          <C>           <C>             <C>        <C>           <C>    
Unaffiliated customers      $44,340      $ 7,064      $    --       $  --            $ 5,998      $    --       $57,402
Interarea transfers              --          138           --          --                 --         (138)           --
                            -------------------------------------------------------------------------------------------
Total                       $44,340      $ 7,202      $    --       $  --            $ 5,998      $  (138)      $57,402
                            =========================================================================================== 

Income from operations      $ 9,034      $   707      $    --       $  --            $ 2,473      $    --       $12,214
                            =========================================================================================== 

ASSETS
Identifiable assets         $30,560      $ 9,429      $10,287       $  --            $ 7,104      $    --       $57,380
Corporate assets              2,150           --           --          --                 --           --         2,150
                            -------------------------------------------------------------------------------------------
Total assets                $32,710      $ 9,429      $10,287       $  --            $ 7,104      $    --       $59,530
                            ===========================================================================================
</TABLE>

Interarea transfers primarily represent shipments of work in process and
finished goods inventory to subsidiaries and affiliates. These interarea
shipments are made at transfer prices which approximate prices charged to
unaffiliated customers and have been eliminated from consolidated net revenues.
Corporate assets consist primarily of cash equivalents.












28
<PAGE>   37

                                AUDITORS' REPORT




To the Shareholder of
CHICAGO MINIATURE LAMP (CANADA) INC.

We have audited the balance sheet of CHICAGO MINIATURE LAMP (CANADA) INC. as at
November 30, 1997 and the statements of income, retained earnings and cash flows
for the year then ended. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at November 30, 1997 and the
results of its operations and the changes in its financial position for the year
then ended in accordance with generally accepted accounting principles in the
United States.

Barrie, Canada,
December 31, 1997.

Chartered Accountants
<PAGE>   38



CHICAGO MINIATURE LAMP (CANADA) INC.

                                  BALANCE SHEET

As at November 30
(with comparative figures as at December 1, 1996)

<TABLE>
<CAPTION>
                                                                 1997            1996
                                                                    $               $
-------------------------------------------------------------------------------------
<S>                                                         <C>             <C>      
ASSETS

CURRENT

Cash                                                        1,476,387         985,424

Accounts Receivable                                         2,996,235       2,630,575

Inventory [note 3]                                          1,360,003       1,661,931

Prepaid expenses                                               45,695          31,019

TOTAL CURRENT ASSETS                                        5,878,320       5,308,949

Fixed assets [note 4]                                       8,007,320       6,779,361

Goodwill [note 5]                                           1,143,277       1,261,167
-------------------------------------------------------------------------------------
                                                           15,028,917      13,349,477
=====================================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT

Accounts payable and accrued charges                        1,503,962       1,350,297

Income taxes payable                                           73,301         614,565

Due to related parties [note 6]                             1,684,026       1,824,850
-------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                   3,261,289       3,789,712

Accrued start-up costs                                             --         333,058

Deferred income taxes                                       1,919,672       1,683,081
-------------------------------------------------------------------------------------
TOTAL LIABILITIES                                           5,180,961       5,805,851
-------------------------------------------------------------------------------------


SHAREHOLDERS' EQUITY

Capital stock [note 7]                                      5,000,000       5,000,000

Retained earnings                                           4,847,956       2,543,626
-------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                                  9,847,956       7,543,626
-------------------------------------------------------------------------------------
                                                           15,028,917      13,349,477
=====================================================================================
</TABLE>

See accompanying notes

On behalf of the Board:

                                    Director                      Director


<PAGE>   39



CHICAGO MINIATURE LAMP (CANADA) INC.

                               STATEMENT OF INCOME

Year ended November 30
(with comparative figures for the year ended December 1, 1996)

<TABLE>
<CAPTION>
                                                                 1997            1996
                                                                    $               $
-------------------------------------------------------------------------------------
<S>                                                        <C>             <C>       
NET SALES                                                  19,465,058      16,872,470

Direct materials and labour                                10,661,542       9,710,805
-------------------------------------------------------------------------------------
Contributions to overhead                                   8,803,516       7,161,665
-------------------------------------------------------------------------------------


OVERHEAD COSTS

Manufacturing expenses                                      2,686,135       2,557,412

Depreciation and amortization                                 587,045         491,816
-------------------------------------------------------------------------------------
                                                            3,273,180       3,049,228

Inventory change and capitalized variances                    670,242        (290,943)
-------------------------------------------------------------------------------------
                                                            3,943,422       2,758,285
-------------------------------------------------------------------------------------
GROSS MARGIN                                                4,860,094       4,403,380

Distribution costs                                            120,702         117,504

Tooling income                                                 (3,058)        (15,890)
-------------------------------------------------------------------------------------
GROSS PROFIT                                                4,742,450       4,301,766

Administration                                                563,120         647,470
-------------------------------------------------------------------------------------
INCOME BEFORE INTEREST, FEES AND INCOME TAXES               4,179,330       3,654,296

Interest on long-term debt                                         --          55,662

Management fee                                                525,000         510,000
-------------------------------------------------------------------------------------
Income before provision for income taxes                    3,654,330       3,088,634
-------------------------------------------------------------------------------------
Provision for income taxes

    Current                                                 1,180,000         946,100

    Deferred                                                  170,000         152,907
-------------------------------------------------------------------------------------
                                                            1,350,000       1,099,007
-------------------------------------------------------------------------------------
NET INCOME FOR THE YEAR                                     2,304,330       1,989,627
=====================================================================================
</TABLE>

See accompanying notes



<PAGE>   40



CHICAGO MINIATURE LAMP (CANADA) INC.

                         STATEMENT OF RETAINED EARNINGS

Year ended November 30
(with comparative figures for the year ended December 1, 1996)

<TABLE>
<CAPTION>
                                                                 1997            1996
                                                                    $               $
-------------------------------------------------------------------------------------
<S>                                                         <C>             <C>    
RETAINED EARNINGS, BEGINNING OF YEAR                        2,543,626         553,999

Net income for the year                                     2,304,330       1,989,627
-------------------------------------------------------------------------------------
RETAINED EARNINGS, END OF                                   4,847,956       2,543,626
-------------------------------------------------------------------------------------
</TABLE>


See accompanying notes


<PAGE>   41



CHICAGO MINIATURE LAMP (CANADA) INC.

                             STATEMENT OF CASH FLOWS

Year ended November 30
(with comparative figures for the year ended December 1, 1996)

<TABLE>
<CAPTION>
                                                                               1997              1996
                                                                                  $                 $
--------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                  <C>      
OPERATING ACTIVITIES

Net income for the year                                                   2,304,330            1,989,627

Add charges to income not resulting in a current outlay of cash

Depreciation and amortization                                               587,045              494,518

Deferred income taxes                                                       170,000              152,907

Net loss on sale of fixed assets                                              4,975               83,643
--------------------------------------------------------------------------------------------------------
                                                                          3,066,350            2,720,695

Net decrease in accrued start-up costs                                     (333,058)            (322,871)

Net change in non-cash working capital balances                            (466,007)            (212,175)
[note 81]
--------------------------------------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES                                     2,267,285            2,185,649
--------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES

Net change in due to related parties                                       (140,824)              89,513

Net change in long-term debt                                                     --             (793,400)
--------------------------------------------------------------------------------------------------------
CASH USED IN FINANCING ACTIVITIES                                          (140,824)            (703,887)
--------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES

Adjustment to deferred taxes recorded upon 
amalgamation                                                                 66,591                   --

Adjustment to goodwill recorded on                                           
amalgamation                                                                 98,663                   --

Purchase of fixed assets                                                 (1,836,156)          (1,645,604)

Proceeds on disposal of fixed assets                                         35,404              234,954
--------------------------------------------------------------------------------------------------------
CASH USED IN INVESTING ACTIVITIES                                        (1,635,498)          (1,410,650)
--------------------------------------------------------------------------------------------------------

NET INCREASE IN CASH DURING THE YEAR                                        490,963               71,112

Cash, beginning of year                                                     985,424              914,312
--------------------------------------------------------------------------------------------------------
CASH, END OF YEAR                                                         1,476,387              985,424
========================================================================================================

</TABLE>
See accompanying notes



<PAGE>   42


CHICAGO MINIATURE LAMP (CANADA) INC.

                        NOTES TO THE FINANCIAL STATEMENTS

November 30, 1997
(with comparative figures as at December 1, 1996)

1. OPERATIONS

The company is a manufacturer and supplier of miniature light socket assemblies
to the automotive industry. The assemblies are used primarily for instrument
clusters, warning lights, climate control modules and courtesy lights.

ARTICLES OF AMENDMENT

On May 9, 1997, the company filed articles of amendment to change its name to
Chicago Miniature Lamp (Canada) Inc. The company was formerly known as Plastomer
Inc.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the company have been prepared in accordance with
generally accepted accounting principles, on a basis consistent with that of the
preceding year. The following is a summary of the more significant accounting
policies:

INVENTORY

Inventory is valued at the lower of cost or net realizable value. Cost has been
determined on the first-in, first-out basis. Net realizable value for finished
goods has been defined as standard selling price less normal profit margin. Net
realizable value for raw materials has been defined as net replacement cost.

FIXED ASSETS

Based on purchase accounting, the fixed assets are stated at the lower of
appraised value, as determined by appraisals dated April 5, 1995 and May 3,
1995, less accumulated depreciation and net recoverable amount. Additions after
these dates are stated at the lower of cost less accumulated depreciation and
net recoverable value. Depreciation is provided on the straight-line basis, with
half rates applied in the year of acquisition, over the following periods:

<TABLE>
<S>                                                    <C>     
Building                                                 35 years
Machinery and equipment                                5-20 years
Moulds and dies                                          10 years
Software                                                  5 years
</TABLE>


<PAGE>   43



CHICAGO MINIATURE LAMP (CANADA) INC.

                        NOTES TO THE FINANCIAL STATEMENTS

November 30, 1997
(with comparative figures as at December 1, 1996)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

GOODWILL

Goodwill is recorded at cost less accumulated amortization. Amortization is
provided on the straight-line basis over a period of 40 years.

TRANSLATION OF FOREIGN CURRENCY

Transactions arising in foreign currencies [principally United States dollars
and British pounds] have been translated at rates of exchange in effect at the
dates of the transactions. Monetary items denominated in foreign currencies have
been translated at rates of exchange in effect at the balance sheet date. Gains
or losses during the year have been included in net income.

3. INVENTORY

<TABLE>
<CAPTION>
                                                                                         1997                 1996
                                                                                            $                    $
------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                  <C>   
Raw materials                                                                         820,977            1,029,503

Work-in-progress and finished goods                                                   488,337              625,370

Capitalized variances                                                                 (49,310)             (27,175)

Tooling                                                                                99,999               34,233
------------------------------------------------------------------------------------------------------------------
                                                                                    1,360,003            1,661,931
==================================================================================================================
</TABLE>


4. FIXED ASSETS

<TABLE>
<CAPTION>
                                                                                         1997                  1996
                                                       --------------------------------------     -----------------
                                                               ACCUMULATED           NET BOOK              NET BOOK
                                                  COST        DEPRECIATION              VALUE                 VALUE
                                                     $                   $                  $                     $
-------------------------------------------------------------------------------------------------------------------
<S>                                          <C>              <C>                   <C>                   <C>  
Land                                            75,000                   -             75,000                75,000

Buildings                                    1,505,615             114,525          1,391,090             1,434,107

Machinery and equipment                      5,482,051             840,664          4,641,387             3,475,312

Moulds and dies                              1,543,212             282,589          1,260,623               884,760

Software                                        62,656              31,301             31,355                42,700

Construction-in-progress                       607,865                   -            607,865               867,482
-------------------------------------------------------------------------------------------------------------------
                                             9,276,399           1,269,079          8,007,320             6,779,361
===================================================================================================================
</TABLE>




<PAGE>   44




CHICAGO MINIATURE LAMP (CANADA) INC.

                        NOTES TO THE FINANCIAL STATEMENTS

November 30, 1997
(with comparative figures as at December 1, 1996)

5. GOODWILL

<TABLE>
<CAPTION>
                                                                                      1997                        1996
                                                                                         $                           $
----------------------------------------------------------------------------------------------------------------------

<S>                                                                              <C>                         <C>

Cost                                                                             1,224,939                   1,323,602

Less accumulated amortization                                                      (81,662)                    (62,435)
----------------------------------------------------------------------------------------------------------------------
                                                                                 1,143,277                   1,261,167
======================================================================================================================
</TABLE>

6. DUE TO RELATED PARTIES

<TABLE>
<CAPTION>
                                                                                      1997                        1996
                                                                                         $                           $
----------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                         <C>
CANADIAN DOLLARS

Due from Power Lighting Products, Inc.                                             (12,625)                         --

BRITISH POUNDS

Due to Badalex Ltd.                                                                 54,320                      88,962

    Exchange                                                                        76,048                     106,754

UNITED STATES DOLLARS

Chicago Miniature Lamp, Inc.                                                     1,062,004                   1,206,739

    Exchange                                                                       424,767                     410,257

IDI Internacional, S.A. (Costa Rica)                                                58,558                       9,058

    Exchange                                                                        20,954                       3,080
----------------------------------------------------------------------------------------------------------------------
                                                                                 1,684,026                   1,824,850
======================================================================================================================
</TABLE>

IDI Internacional, S.A. was paid $67,374 to provide sub-assembly services for
the company's LED product line.

The company purchased a piece of production equipment from Badalex Ltd. for
$859,297.

Both of the above sister corporations deal on terms that are substantially the
same as to independent customers.

Chicago Miniature Lamp, Inc. pays certain expenditures on behalf of the company
and purchases finished goods. They also provide executive, information system
and marketing services for which they receive a yearly management fee. Finished
goods purchased in the year by this company were $154,189.


<PAGE>   45



CHICAGO MINIATURE LAMP (CANADA) INC.

                        NOTES TO THE FINANCIAL STATEMENTS

November 30, 1997
(with comparative figures as at December 1, 1996)

7. CAPITAL STOCK

<TABLE>
<CAPTION>
                                                                                       1997                        1996
                                                                                          $                           $
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                         <C>
AUTHORIZED

Unlimited voting, 6% non-cumulative, redeemable,
    retractable Class AA special shares

Unlimited common shares

ISSUED AND FULLY PAID

5,000,000 common shares                                                           5,000,000                   5,000,000
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

8. NET CHANGE IN NON-CASH WORKING CAPITAL BALANCES

<TABLE>
<CAPTION>

                                                                                       1997                        1996
                                                                                          $                           $
-------------------------------------------------------------------------------------------  --------------------------
<S>                                                                                <C>       <C>                
Accounts receivable                                                                (365,660)                     10,922

Income taxes receivable                                                                  --                     133,139

Inventory                                                                           301,928                    (205,552)

Prepaid expenses                                                                    (14,676)                      3,637

Accounts payable and accrued                                                        153,665                    (768,886)
charges

Income taxes payable                                                               (541,264)                    614,565
-----------------------------------------------------------------------------------------------------------------------
                                                                                   (466,007)                   (212,175)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

Decreases in assets and increases in liabilities result in a source of funds.
Increases in assets and decreases in liabilities result in a use of funds and
are indicated by brackets.


<PAGE>   46


CHICAGO MINIATURE LAMP (CANADA) INC.

                        NOTES TO THE FINANCIAL STATEMENTS

November 30, 1997
(with comparative figures as at December 1, 1996)

9. PENSION PLAN

Prior to July 31, 1997 the company maintained a defined benefit pension plan of
which substantially all employees are members. Current and past service costs
are charged to income as incurred and funded as required by actuarial
valuations.

The most recent triennial actuarial valuation, scheduled for January 1, 1997 is
not yet complete. However, the plan's most recent financial statements as at
December 31, 1996 indicate a surplus of $89,335.

The pension expense, all for current service costs, is $62,579 [1996 -
$96,8371]. Effective July 1, 1997 the company introduced a Group Registered
Retirement Savings Plan and began the process of winding-up the defined benefit
plan. The accumulated net assets of the defined benefit plan will be distributed
to the members for transfer to a "locked-in" Registered Retirement Savings Plan.

10. OPERATING LEASES

Minimum lease payments over the next four years with respect to vehicle and
office equipment operating leases are as follows:

<TABLE>
<CAPTION>
                                                                                    $
-------------------------------------------------------------------------------------
<S>                                                                            <C>   
1998                                                                           20,828

1999                                                                           14,180

2000                                                                            9,826

2001                                                                            6,212
-------------------------------------------------------------------------------------
                                                                               51,046
=====================================================================================
</TABLE>

11. CONTINGENT LIABILITY

During the year, the company pledged an unlimited guarantee in favour of
BANKBOSTON, N.A. over the indebtedness of its parent company, Chicago Miniature
Lamp, Inc.

12. COMMITMENTS

The company has committed to $739,500 of capital asset purchases for the coming
year. Progress payments totaling $571,152 have been made to suppliers as a
result of these commitments. These payments are included under
"Construction-in-progress" [Note 4] in the financial statements.


<PAGE>   47
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to its Form
10-K Report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dated: March 1, 1999                      SLI, INC.

                                          By: /s/  Frank M. Ward
                                             -----------------------------------
                                                  Frank M. Ward, Chief Executive
                                                  and Financial Officer


                                          By: /s/  Richard F. Parenti
                                             -----------------------------------
                                                  Richard F. Parenti, 
                                                  Chief Accounting Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<S>                                 <C>                        <C>
/s/  Frank M. Ward                  Director                   March 1, 1999
------------------------------
Frank M. Ward


/s/  Werner Arnold                  Director                   March 1, 1999
------------------------------
Werner Arnold


/s/  Donald S. Dewsnap              Director                   March 1, 1999
------------------------------
Donald S. Dewsnap


/s/  Richard Ingram                 Director                   March 1, 1999
------------------------------
Richard Ingram


                                    Director                              
------------------------------
Fred Howard


/s/  Maurice B. Hare                Director                   March 1, 1999
------------------------------
Maurice B. Hare

</TABLE>

<PAGE>   48

                        INDEX TO EXHIBITS FILED HEREWITH

<TABLE>
<CAPTION>
Exhibit
Number                     Description
<S>               <C>
23.1              Consent of Ernst & Young LLP

23.2              Consent of Hards Pearson
</TABLE>