Evans & Sutherland Computer Corporation (E&S) (NASDAQ: ESCC) today reported financial results in its Form 10-Q filing for the first quarter ended March 30, 2007.

Sales for the first quarter were $4.4 million, up 16% from sales of $3.8 million in the first quarter of 2006 adjusted on a continuing operations basis. There was a net loss in the first quarter of $2.9 million or $0.26 per share, compared to net loss of $5.9 million or $0.56 per share, in the same quarter of 2006. Backlog at the end of the first quarter was $28.4 million up 39% from December 31, 2006.

Comments from David H. Bateman, President and Chief Executive Officer: ?The first quarter of this year was a period of continuing improvement in the performance of the business. We made significant progress in the implementation of improvements in our laser projector product. Several important customer deliveries of Digistar 3 laser systems were made and these systems are in the process of installation and acceptance. Additionally, we performed some upgrades to previously installed laser projectors and additional upgrades will be accomplished through the next two quarters. New orders were strong for the quarter as several previously anticipated awards were received, as well as additional new orders. We expect this new order performance to continue as we realize the benefits from the synergy of our Digital Theater and Spitz businesses.

Within our ongoing operations, results for the quarter were improved over the fourth quarter of last year and operating expenses were further reduced, though we incorporated several improvements in our laser projector. We also continued to incur costs for support of late stage pre-production projectors that were delivered to support existing customers although these costs were reduced from previous periods. Significant progress was made in the incorporation of components necessary for completing our production deliveries. The installation of these improvements will continue through the second and third quarters as previously delivered systems are upgraded. Expenses for the quarter were less than planned and reflect the benefit from the business not being impacted by transaction activities, improved cost controls, and reduced support costs for already fielded systems.

Orders for both Digital Theater and Spitz were strong in the quarter and we expect to see this trend continue in the second quarter. Revenues for Digital Theater have been impacted by previously discussed delays in completing acceptances of our delivered laser projectors. The majority of these acceptances are expected to be realized through the second quarter.

Development activity is well underway for pursuit of potential new markets identified in our advanced display business plan. These activities will continue throughout the year in anticipation of initial market entry in 2008.

With the continuing successful integration of Spitz into our business, improvements in production and performance of our laser projector, increased customer interest, strong orders growth, and the exploitation of new areas for our laser technology, we are increasingly confident and positive for the future direction of the company.?

Statements in this press release which are not historical, including statements regarding E&S' or management's intentions, hopes, beliefs, expectations, representations, projections, plans, or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation except as required by law to update the forward-looking statements contained in this press release as a result of new information or future events or developments. You can identify these statements by the fact that they use words such as ?anticipate,? ?estimate,? ?expect,? ?project,? ?intend,? ?should,? ?plan,? ?goal,? ?believe,? ?confident? and other words and terms of similar meaning in connection with any discussion of future operating or financial performance together with the negative of such expressions. Among the factors that could cause actual results to differ materially are the following: the ability of the Company to successfully integrate the Spitz business; the ability to complete production models of its laser projectors without further delays or higher costs; the Company's ability to successfully market both new and existing products domestically and internationally; difficulties or delays in manufacturing; delays market and general economic conditions. A further list and description of these risks, uncertainties and other matters can be found in the Company's reports filed with the Securities and Exchange Commission.

E&S is a registered trademark of Evans & Sutherland Computer Corporation.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION
(In thousands, except per share data)
Unaudited
Three Months Ended
March 30, 2007 March 31, 2006
 
Sales $ 4,357  $ 3,767 
Cost of sales 2,999  2,424 
Gross profit 1,358  1,343 
 
Expenses:
Selling, general and administrative 2,069  575 
Research and development 2,325  1,935 
Operating expenses 4,394  2,510 
Operating loss (3,036) (1,167)
Other income (expense), net 89  (401)
Loss from continuing operations before income taxes (2,947) (1,568)
Income tax benefit 15  574 
Net loss from continuing operations (2,932) (994)
Gain (loss) from discontinued operations, net of tax 13  (2,612)
Loss on sale of discontinued operations, net of tax -  (2,262)
Net income (loss) from discontinued operations 13  (4,874)
Net loss $ (2,919) $ (5,868)
 
Net income (loss) per common share - basic and diluted:
 
Loss from continuing operations $ (0.26) $ (0.10)
Net income (loss) from discontinued $ 0.00  $ (0.46)
Net loss $ (0.26) $ (0.56)
 
Weighted average common shares outstanding:
Basic and diluted 11,089  10,536 
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
(In thousands)
Unaudited
March 30, 2007 December 31, 2006
Assets:

Cash and restricted cash

$ 11,619  $ 16,182 
Net receivables, billed and unbilled 8,945  7,064 
Inventories 8,055  6,713 
Net property, plant and equipment 12,622  12,689 
Prepaid pension and retirement 9,518  9,449 
Other assets 3,180  3,284 
Total assets $ 53,939  $ 55,381 
 
Liabilities and stockholders' equity:
Accounts payable and accrued expenses $ 6,493  $ 8,364 
Other liabilities 27,781  24,635 
Stockholders' equity 19,665  22,382 
Total liabilities and stockholders' equity $ 53,939  $ 55,381 
BACKLOG
(In thousands)
Unaudited
March 30, 2007 December 31, 2006
 
$ 28,354  $ 20,408