<PAGE>   1




                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                           -------------------------


                                  (Mark One)

         [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended July 2, 2000


                                       OR


         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934


                          Commission File No. 0-25848

                                   SLI, INC.
                                   ---------
               (Exact name of registration specified in charter)


       OKLAHOMA                                         73-1412000
       --------                                         ----------
(State of Incorporation)                   (I.R.S. Employer Identification No.)


                      500 Chapman Street, Canton, MA 02021
                      ------------------------------------
                    (Address of principal executive offices)


                                  781/828-2948
                                  ------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                              Yes [X]       No [ ]


Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the last practicable date.

As of July 2, 2000, 34,612,206 shares of Registrant's Common Stock $.01 par
value, were outstanding.



<PAGE>   2

PART I - FINANCIAL INFORMATION

ITEM 1.- FINANCIAL STATEMENTS


                           SLI, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                      JULY 2,        JANUARY 2,
                                                                       2000             2000
                                                                     ---------     -----------
                                                                    (UNAUDITED)
<S>                                                                 <C>            <C>

                                     ASSETS
CURRENT ASSETS:
       Cash and cash equivalents                                     $  30,980       $  25,848
       Accounts receivable, net                                        191,219         195,881
       Inventories                                                     184,224         180,910
       Prepaid expenses and other                                       19,249          19,222
                                                                     ---------       ---------
            Total current assets                                      425,672         421,861
                                                                     ---------       ---------

PROPERTY, PLANT AND EQUIPMENT, AT COST:                                390,820         390,403
       Less - Accumulated depreciation                                  47,255          39,925
                                                                     ---------       ---------
                                                                       343,565         350,478
                                                                     ---------       ---------
OTHER ASSETS:
       Goodwill, net of accumulated amortization                        48,532          49,887
       Other intangible assets, net of accumulated amortization         29,530          29,444
       Other assets                                                     13,925          15,214
                                                                     ---------       ---------
            Total other assets                                          91,987          94,545
                                                                     ---------       ---------
            Total assets                                             $ 861,224       $ 866,884
                                                                     =========       =========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
       Short-term notes payable                                      $  64,018       $  60,505
       Current portion of long-term debt                                   315             760
       Accounts payable                                                 99,584         113,673
       Accrued income taxes payable                                      7,954           9,731
       Other accrued expenses                                           76,936          92,118
                                                                     ---------       ---------
            Total current liabilities                                  248,807         276,787
                                                                     ---------       ---------

LONG-TERM DEBT, LESS CURRENT PORTION                                   201,697         164,160
                                                                     ---------       ---------
OTHER LIABILITIES:
       Deferred income taxes                                             6,638           5,815
       Other long-term liabilities                                      43,001          46,105
                                                                     ---------       ---------
            Total other liabilities                                     49,639          51,920
                                                                     ---------       ---------

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
       Common stock, $.01 par value-
            Authorized - 100,000,000 shares
            Issued - 34,612,206 and 34,566,388
            shares at July 2, 2000 and
            January 2, 2000 respectively                                   346             346
       Common stock to be issued                                         3,600          15,287
       Additional paid-in capital                                      282,766         278,947
       Retained earnings                                               124,860         116,012
       Foreign currency translation adjustment                         (50,491)        (31,741)
       Treasury stock at cost, 450,000
            shares at January 2, 2000                                                   (4,834)
                                                                     ---------       ---------
            Total stockholders' equity                                 361,081         374,017
                                                                     ---------       ---------
            Total liabilities and stockholders' equity               $ 861,224       $ 866,884
                                                                     =========       =========

</TABLE>


See accompanying notes to the condensed financial statements.



<PAGE>   3

                           SLI, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                   THREE MONTHS ENDED           SIX MONTHS ENDED
                                               ------------------------    -----------    ---------
                                                 JULY 2,       JULY 4,        JULY 2,      JULY 4,
                                                  2000          1999           2000         1999
                                               -----------    ---------    -----------    ---------
                                                      (UNAUDITED)                 (UNAUDITED)
<S>                                            <C>            <C>          <C>            <C>

Net sales                                       $ 210,405     $ 206,047     $ 435,690     $ 424,912
Cost of products sold                             154,480       144,773       316,905       300,784
                                                ---------     ---------     ---------     ---------
Gross margin                                       55,925        61,274       118,785       124,128
Selling, general and administrative expenses       47,724        42,509        95,280        86,763
Restructuring costs                                               2,300                       2,300
                                                ---------     ---------     ---------     ---------
Operating income                                    8,201        16,465        23,505        35,065
Other (income) expense
       Interest, net                                3,952         4,830         7,425         9,398
       Other, net                                  (2,224)          (22)       (2,527)       (1,195)
                                                ---------     ---------     ---------     ---------
Income before income taxes                          6,473        11,657        18,607        26,862
Income taxes                                        1,036         2,297         2,929         4,730
                                                ---------     ---------     ---------     ---------
Net Income                                      $   5,437     $   9,360     $  15,678     $  22,132
                                                =========     =========     =========     =========

Net income per common share - basic
       Net income per share                     $    0.16     $    0.32     $    0.46     $    0.76
                                                =========     =========     =========     =========

       Weighted average shares outstanding         33,946        29,320        33,975        29,204
                                                =========     =========     =========     =========

Net income per common share - diluted
       Net income per share                     $    0.16     $    0.30     $    0.45     $    0.72
                                                =========     =========     =========     =========

       Weighted average shares outstanding         34,212        31,080        34,465        30,911
                                                =========     =========     =========     =========

</TABLE>

See accompanying notes to the condensed financial statements.

<PAGE>   4

                           SLI, INC AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)


                                                             Six Months
                                                                Ended
                                                        ---------------------
                                                         July 2,      July 4,
                                                          2000         1999
                                                        --------     --------
                                                             (unaudited)

NET CASH USED IN OPERATING ACTIVITIES                   $ (4,984)    $(25,555)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property,plant, and equipment               (19,584)     (21,809)
Proceeds from disposal of other investments                               332
Acquisitions, net of cash acquired                                     (5,823)
                                                        --------     --------
Net cash used in investing activities                    (19,584)     (27,300)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds of lines of credit                           41,102       38,445
Proceeds from long-term debt                                              412
Payments of long-term debt                                  (893)      (1,467)
Repurchase of shares for treasury                         (3,756)      (5,681)
Payments of offering costs                                   (21)
Exercise of stock options                                    743        4,946
Payments of dividends                                     (6,830)
                                                        --------     --------
Net cash provided by financing activities                 30,345       36,655

Effect of exchange rate changes on cash                     (645)      (1,826)
                                                        --------     --------
Net increase (decrease) in cash and cash equivalents       5,132      (18,026)

Cash and cash equivalents, beginning of period            25,848       27,390
                                                        --------     --------

Cash and cash equivalents, end of period                $ 30,980     $  9,364
                                                        ========     ========



See accompanying notes to the condensed financial statements.



<PAGE>   5

                          SLI, Inc. and Subsidiaries

                   Consolidated Notes To Financial Statements

Note 1   General

         The interim consolidated financial statements presented have been
prepared by SLI, Inc. ("Company") without audit and, in the opinion of
management, reflect all adjustments of a normal recurring nature necessary for
a fair presentation of (a) the results of operations and cash flows for the
three month and six month periods ended July 2, 2000 and July 4, 1999 and (b)
the financial position at July 2, 2000. Interim results are not necessarily
indicative of results for a full year.

         The consolidated balance sheet presented as of January 2, 2000 has
been derived from the consolidated financial statements that have been audited
by the Company's independent public accountants. The consolidated financial
statements and notes are condensed and do not contain certain information
included in the annual financial statements and notes of the Company. The
consolidated financial statements and notes in the financial statements
included herein should be read in conjunction with the financial statements and
notes included in the Company's Form 10-K filed with the Securities and
Exchange Commission and dated March 15, 2000.

Note 2   Inventories

         Inventories are stated at the lower of cost or market and include
materials, labor and overhead. Cost is determined by the first-in, first-out
(FIFO) method. Inventories consist of the following (dollars in thousands):


                                                    July 2,           January 2,
                                                     2000                2000
                                                   --------           ---------

Raw Materials                                      $ 42,458            $ 46,358
Work in process                                      19,821              14,995
Finished Goods                                      121,945             119,557
                                                   --------            --------
                                                   $184,224            $180,910

Note 3   Comprehensive income

         During the three months ended July 2, 2000 and July 4, 1999, total
comprehensive income (loss) amounted to ($3.3) million and ($1.6) million,
respectively. During the six months ended July 2, 2000 and July 4, 1999, total
comprehensive income (loss) amounted to ($3.1) million and ($11.0 million),
respectively. The components of comprehensive income (loss) are net income and
cumulative foreign currency translation adjustment.



<PAGE>   6

Note 4   Seasonality

         It is expected that the Company's operations will experience certain
seasonal patterns. Generally, sales have been highest in the fourth quarter of
each year due to abbreviated daylight hours and increased holiday light usage.

Note 5   Common stock to be issued

         In connection with certain acquisitions, the Company is holding
112,500 shares of common stock to be issued pursuant to the terms of the
purchase agreements.

Note 6   Income taxes

         The Company's effective tax rate is lower than the U.S. statutory
effective tax rate 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.

Note 7   Treasury stock

         The board of directors has authorized, subject to certain business and
market conditions, the repurchase of shares of the Company's stock. At July 2,
2000, a total of 3,488,162 shares have been repurchased under these plans and
retired.

Note 8   Net Income Per Share Data

         The numerator in calculating both basic and diluted earnings per share
for each year is reported net income. The denominator is based on the following
weighted-average number of common shares (in thousands):


                               Three Months Ended     Six Months Ended
                               ------------------    ------------------
                               July 2,    July 4,    July 2,    July 4,
                                2000       1999       2000       1999
                               ------     ------     ------     ------

         Basic                 33,946     29,320     33,975     29,204
         Diluted               34,212     31,080     34,465     30,911


         The difference between basic and diluted weighted-average common
shares results from the assumption that dilutive stock options outstanding were
exercised.



<PAGE>   7

Note 9   Adoption of Accounting Principles

         In June 1998, the SFAS No. 133 Accounting for Derivatives Instruments
and Hedging Activities (Statement 133), which is required to be adopted in
fiscal years beginning after June 15, 2000. Statement 133 requires all
derivatives to be recognized in the balance sheet as either assets or
liabilities at fair value. Derivatives that are not hedges must be adjusted to
fair value through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of derivatives will either be
offset against the change in fair value of the hedged assets, liabilities, or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in income. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
The Company has not yet determined what the effect of Statement 133 will be on
the earnings and financial position of the Company.

Note 10  Subsequent events

         In July 2000, the Company established a five year 78.0 million Euro
Receivable Purchase Agreement ("Receivables Facility") with a financial
institution. The amount of borrowings allowable under the Receivables Facility
at any time is a function of the amount of the outstanding eligible trade
accounts receivables up to 78.0 million Euro. The net proceeds from the initial
sale of accounts receivable (approximately $23 million) were used to repay
borrowings.

         In July 2000, the Company completed the acquisition of certain
business lines of EMESS PLC, of which products are high-end lighting fixtures
sold primarily throughout Europe.



<PAGE>   8

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The following discussion and analysis of the results of operations for
the three and six months ended July 2, 2000 should be read in conjunction with
the Company's Condensed Consolidated Financial Statements and 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 the Company's business and prospects and cause
actual results to differ materially from these forward-looking statements.


GENERAL

         The Company is a leading, vertically integrated manufacturer and
supplier of lighting systems, which include lamps, fixtures and ballasts.
Through its 23 acquisitions completed since 1992, the Company has grown from a
specialized manufacturer of neon lamps and miniature lighting products into a
manufacturer, supplier and lighting service provider of a wide variety of
lighting products, including lamps (incandescent, fluorescent, compact
fluorescent, HID, halogen, miniature incandescent, neon, LED's and special
lamps), fixtures, magnetic and electronic ballasts and fiber optic lighting
systems. 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 and at July 2, 2000 had 32 manufacturing
plants in 13 countries. SLI, Inc. acquired 4 companies in 1999, which has an
impact on year to year comparisons of revenues and earnings.

         For the six months ended July 4, 1999 and July 2, 2000, 73.3% and
67.8%, respectively, of the Company's worldwide net revenue was generated from
international operations. International operations are subject to currency
fluctuations and government actions, such as devaluations. The Company monitors
its currency exposure in each country and can not predict future foreign
currency fluctuations, which have and may continue to affect the Company's
balance sheet and results of operations.

Three months ended July 2, 2000 compared to the three months ended July 4,
1999.

         Net sales. Net sales increased 2.1% from $206.0 million for the three
months ended July 4, 1999 to $210.4 million for the three months ended July 2,
2000. This increase was primarily due to generic growth generated from the
integration of incremental sales of the 1999 acquisitions into ongoing
operations. The generally higher value of the US dollar compared to other
currencies worldwide decreased net sales by approximately 5.8% for the three
months ended July 2, 2000 as compared to the three months ended July 4, 1999.
Net sales for the quarter are also affected by decreases in average selling
prices of general lighting products, primarily sold in Europe and North
America, as a result of market pricing pressures.



<PAGE>   9

         Gross Margin. Gross margin decreased from $ 61.3 million for the three
months ended July 4, 1999 to $ 55.9 million for the three months ended July 2,
2000, due primarily to the translation effects of the weakening European
currencies and a decrease in average selling prices. In addition, the gross
margin was impacted by non-recurring charges of $381,000 associated with
severance and disposals. The gross margin, as a percentage of net sales, was
further impacted by the effects of the changes in product mix due to the 1999
acquisitions. The gross margin of the Company is expected to improve as the
recent acquisitions are further integrated into the Company.

         Selling, general and administrative expenses. Selling, general and
administrative expenses increased from $42.5 million for the three months ended
July 4, 1999 to $47.7 million for the three months ended July 2, 2000. As a
percentage of net sales, selling, general and administrative expenses increased
from 20.6% for the three months ended July 4, 1999 to 22.7% for the three
months ended July 2, 2000. The increase in selling, general and administrative
expenses is primarily due to the 1999 acquisitions. Selling, general and
administrative expenses were also impacted by non-recurring charges totaling
approximately $349,000, which primarily represent severance costs.

         Restructuring costs. In the quarter ended July 4, 1999, the Company
developed and approved a restructuring plan for existing operations, which
resulted in charges of $2.3 million. This restructuring plan was completed in
1999. The Company expects to realize approximately $1 million in annualized
cost savings, largely as a result of reduced employee expense.

         Interest (income) expense, net. Interest expense, net, decreased from
$4.8 million for the three months ended July 4, 1999 to $3.9 million for the
three months ended July 2, 2000, primarily as a result of a decrease in average
outstanding borrowings of approximately $42 million and a decrease in the
overall cost of funds of approximately 30 basis points. The cost of funds
decrease is largely due to a shift in borrowings to foreign denominated debt at
lower interest rates.

         Other (income) expense. Other income of $ 2.2 million for the three
months ended July 2, 2000 resulted from the effect of foreign exchange
transactions totaling $ 1.7 million and investment income from a joint venture
totaling $ 0.5 million. For the three months ended July 4, 1999, a loss on the
sale of an investment totaling $193,000 was offset by the effect of foreign
exchange transactions.

         Income before income taxes. As a result of the above factors, income
before income taxes decreased from $11.7 million for the three months ended
July 4, 1999 to $6.5 million for the three months ended July 2, 2000. As a
percentage of net sales, income before provision for income taxes decreased
from 5.7% for the three months ended July 4, 1999 to 3.1% for the three months
ended July 2, 2000.



<PAGE>   10

         Income taxes. For the three months ended July 2, 2000, the Company
recorded a tax provision of $1.0 million on pretax income of $6.4 million, for
an effective rate of 16.0%, compared to an effective rate of 19.7% for the
three months ended July 4, 1999. The lower than U.S. statutory tax rate is 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. 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.

Six months ended July 2, 2000 compared to the six months ended July 4, 1999.

         Net sales. Net sales increased 2.5% from $424.9 million for the six
months ended July 4, 1999 to $435.7 million for the six months ended July 2,
2000. This increase was primarily due to generic growth generated from the
integration of incremental sales of the 1999 acquisitions into ongoing
operations. The generally higher value of the US dollar compared to other
currencies worldwide decreased net sales by approximately 5.8% for the six
months ended July 2, 2000 as compared to the six months ended July 4, 1999. Net
sales for the six months ended July 2, 2000 are also affected by decreases in
average selling prices of general lighting products, primarily sold in Europe
and North America, as a result of market pricing pressures.

         Gross Margin. Gross margin decreased from $ 124.1 million for the six
months ended July 4, 1999 to $ 118.8 million for the six months ended July 2,
2000, due primarily to the translation effects of the weakening European
currencies and a decrease in average selling prices. In addition, the gross
margin was impacted by non-recurring charges of $381,000 associated with
severance and disposals. The gross margin, as a percentage of net sales, was
further impacted by the effects of the changes in product mix due to the 1999
acquisitions. The gross margin of the Company is expected to improve as the
recent acquisitions are further integrated into the Company.

         Selling, general and administrative expenses. Selling, general and
administrative expenses increased from $86.8 million for the six months ended
July 4, 1999 to $95.3 million for the six months ended July 2, 2000. As a
percentage of net sales, selling, general and administrative expenses increased
from 20.4% for the six months ended July 4, 1999 to 21.9% for the six months
ended July 2, 2000. The increase in selling, general and administrative
expenses is primarily due to the 1999 acquisitions. Selling, general and
administrative expenses were also impacted by non-recurring charges totaling
approximately $349,000, which primarily represent severance costs.

         Restructuring costs. In the quarter ended July 4, 1999, the Company
developed and approved a restructuring plan for existing operations, which
resulted in charges of $2.3 million. This restructuring plan was completed in
1999. The Company expects to realize approximately $1 million in annualized
cost savings, largely as a result of reduced employee expense.



<PAGE>   11

         Interest (income) expense, net. Interest expense, net, decreased from
$9.4 million for the six months ended July 4, 1999 to $7.4 million for the six
months ended July 2, 2000, primarily as a result of a decrease in average
outstanding borrowings of approximately $42 million and a decrease in the
overall cost of funds of approximately 50 basis points. The cost of funds
decrease is largely due to a shift in borrowings to foreign denominated debt at
lower interest rates.

         Other (income) expense. Other income increased from $ 1.2 million for
the six months ended July 4, 1999 to $2.5 million for the six months ended July
2, 2000. The other income for the six months ended July 2, 2000 includes $ 1.8
million related to recording the effects of foreign exchange transactions and $
0.7 million of investment income from a joint venture. Substantially all of the
other income for the six months ended July 4, 1999 resulted from recording the
effects of foreign exchange transactions, partly offset by a loss of $ 193,000
on the sale of an investment.

         Income before income taxes. As a result of the above factors, income
before income taxes decreased from $26.9 million for the six months ended July
4, 1999 to $18.6 million for the six months ended July 2, 2000. As a percentage
of net sales, income before provision for income taxes decreased from 6.3% for
the six months ended July 4, 1999 to 4.3% for the six months ended July 2,
2000.

         Income taxes. For the six months ended July 2, 2000, the Company
recorded a tax provision of $2.9 million on pretax income of $18.6 million, for
an effective rate of approximately 16.0%, compared to an effective rate of
17.6% for the six months ended July 4, 1999. The lower than U.S. statutory tax
rate is 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. 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.


LIQUIDITY AND CAPITAL RESOURCES

         The Company's major uses of cash have historically been for
acquisitions, working capital to support sales growth, ongoing capital
expenditures and stock repurchase. Sources of cash have typically included
operating cash flow, bank borrowings and proceeds from the sale of Common
Stock. On July 6, 1999, the Company completed a public offering pursuant to
which the Company issued and sold 6,000,000 shares of its Common Stock and
received net proceeds of approximately $153.5 million. The Company used the net
proceeds from the offering to reduce debt.

         As of July 2, 2000, the Company's cash on hand was $31.0 million. For
the six months ended July 2, 2000, net cash used in operating activities was
$5.0 million and cash used in investing activities totaled $19.6 million. The
investing activities primarily include capital expenditures for production
equipment. Net cash provided by financing activities for the six months ended
July 2, 2000 aggregated $30.3 million, which included $40.2 in net borrowings
under the Company's worldwide credit facilities, repurchases of Common Stock
totaling $3.8



<PAGE>   12

million, proceeds from the exercise of stock options totaling $0.7 million and
dividend payments totaling $6.8 million.

         As of July 2, 2000, the Company had available borrowings, subject to
certain financial covenants, of approximately $ 298 million under the existing
Revolving Credit Facility, and the face amount of letters of credit issued and
outstanding under the existing Credit Facility totaled approximately $ 2.6
million. The Company also has a number of other committed and uncommitted
facilities worldwide, which it utilizes for short-term working capital
requirements.

         In April 2000, the Company entered into an equity forward purchase
transaction whereby the Company has the ability to purchase shares of the
Company's common stock in an aggregate principal amount of up to $15 million.
The Company is not required to pay for shares purchased under the transaction
until the end of a two-year period. The Company shall make quarterly payments
of interest on the principal amount of shares which the Company commits to
purchase, with interest to be calculated based on Libor plus a spread
determined upon the Company's leverage ratio. On the termination date, the
Company has the option to settle the transaction by payment of cash, sales of
shares of common stock, or a combination thereof. To date, the Company has made
commitments to purchase 260,500 shares for a principal purchase price of
approximately $3.3 million.

         In March 2000, the Company entered into a sale leaseback transaction
in connection with a 370,000 square foot distribution facility to be located in
France. Under the terms of the lease arrangement, the Company has entered into
a 12-year lease anticipated to begin in the fourth quarter of this year. The
lease payments are based on an investment value of FF 149,544,000 (or
approximately US $21 million), with a variable interest factor based on Euribor
plus 1.1%. The Company has the option to convert the lease payments to a fixed
rate payment equal to a governmental bond rate plus 1.1%. The residual value at
the end of the lease is FF 44,491,000 (or approximately US $6 million).



<PAGE>   13

         In July 2000, the Company established a five year 78.0 million Euro
Receivable Purchase Agreement ("Receivables Facility") with a financial
institution. The amount of borrowings allowable under the Receivables Facility
at any time is a function of the amount of the outstanding eligible trade
accounts receivables up to 78.0 million Euro. The net proceeds from the initial
sale of accounts receivable (approximately $23 million) were used to repay
borrowings.

         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. Certain member countries of the European Union established fixed
conversion rates between their existing currencies and the European Economic
Monetary Union common currency, or Euro. While the Euro was introduced on
January 1, 1999, member countries will continue to use their existing
currencies through January 1, 2002, with the transition period for full
conversion to the Euro ending June 30, 2002. 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 credit facilities will be sufficient to meet the
Company's working capital and capital expenditures needs for the next twelve
months and the foreseeable future thereafter. Capital expenditures during the
next twelve months are expected to approximate $ 35 million.


SEASONALITY

         It is expected that the Company's operations will experience certain
seasonal patterns. Generally, sales have been highest in the fourth quarter of
each year due to abbreviated daylight hours and increased holiday light usage.



<PAGE>   14

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The tables below summarize information on instruments and transactions
that are sensitive to foreign currency exchange rates, including foreign
currency forward exchange agreements and foreign currency denominated debt
obligations.

Debt Denominated in Foreign Currencies is as follows:


<TABLE>
<CAPTION>

                                                                                       There-              Fair value
                                        2000    2001      2002      2003      2004     after       Total    7/2/2000
                                       ------   ----      ----      ----      ----     ------      -----   ---------
                                                              (Dollars equivalent in millions)
<S>                                    <C>      <C>       <C>       <C>       <C>      <C>         <C>     <C>

Belgium Francs
      Variable rate loan                2.8       --        --        --        --        --         2.8       2.8
      Avg Interest rate                 5.1%
      Avg Forward Currency
                Exchange rate           0.024

Deutsche Marks
      Variable rate loan                6.4       --        --        --        --        --         6.4       6.4
      Avg Interest rate                 5.1%
      Avg Forward Currency
                Exchange rate           0.487

UK Pounds
      Variable rate loan                9.2       --        --        --        --        --         9.2       9.2
      Avg Interest rate                 7.3%
      Avg Forward Currency
                Exchange rate           1.519

Euro
      Variable rate loan               72.9                 --        --        --        --        72.9      72.9
      Avg Interest rate                 5.1%
      Avg Forward Currency
                Exchange rate           0.952

Japanese Yen
      Variable rate loan               18.4                 --        --        --        --        18.4      18.4
      Avg Interest rate                 1.3%
      Avg Forward Currency
                Exchange rate           0.009

</TABLE>


<PAGE>   15

Foreign Currency Forward Exchange Contracts are as follows:

<TABLE>
<CAPTION>

                                                                                                             Avg
                                                                                                             Cont.   Fair value
Buy Contract            Functional currency       2000    2001   2002    2003   2004   Thereafter   Total    Rate     7/2/2000
                                                  ----    ----   ----    ----   ----   ----------   -----    -----   ----------
                                                                       (Dollars equivalent in millions)
<S>                     <C>                       <C>     <C>    <C>     <C>    <C>    <C>          <C>      <C>     <C>

Euro Dollar             British Pounds Sterling    7.3                                               7.3     1.553       7.3
United States Dollar    British Pounds Sterling    0.7                                               0.7     1.627       0.7

</TABLE>


                          PART II - OTHER INFORMATION

Item 6   Exhibits and Reports on Form 8-K

         No.
         10.49             Purchase Agreement dated May 27, 2000 by
                           and between the registrant and EMESS PLC, a
                           Company registered in England and Wales

          27.1             Financial Data Schedule (For SEC Use Only)

         No report on Form 8-K was filed during the quarter ending July 2, 2000


                                   SIGNATURES

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


                                       SLI, Inc.


                                       By: /s/ Frank M. Ward
                                          -------------------------------------
                                               Frank M. Ward, President and
                                               Chief Executive Officer
Date: August 15, 2000



                                       By: /s/ Richard F. Parenti
                                          -------------------------------------
                                               Richard F. Parenti,
                                               Chief Financial Officer
Date: August 15, 2000