EVANS & SUTHERLAND COMPUTER CORPORATION 
By Evans & Sutherland Computer Corporation (E&S) (NASDAQ: ESCC) today reported financial results in its Form 10-Q filing for the second quarter ended June 29, 2007.
Sales for the second quarter were $6.5 million, up 155% from sales of $2.5 million in the second quarter of 2006 adjusted on a continuing operations basis. There was a net loss in the second quarter of $2.3 million or $0.21 per share, compared to net loss of $3.8 million or $0.35 per share, in the same quarter of 2006. Backlog at the end of the second quarter was $30.4 million up 49% from December 31, 2006.
Comments from David H. Bateman, President and Chief Executive Officer: ?The second quarter of this year reflected continuing improvement in the performance of the business. We made significant progress in both the implementation of improvements in our laser projector product as well as development of the Laser Wide projector which is planned to be demonstrated later this year. 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 continued to be strong for the quarter, resulting in a substantially increased backlog of over $30 million. We expect this new order performance to continue at a somewhat more moderate pace for the rest of the year.
?Within our ongoing operations, results for the quarter continued to improve and operating expenses were further reduced. We also achieved further reductions in costs for support of late stage pre-production laser projectors that were delivered to support existing customers. Significant progress was made in the incorporation of components necessary for completing our production deliveries. The installation of these improvements will continue through the third quarter as previously delivered systems are upgraded. There was increased manufacturing activity for domes at Spitz and systems for Digital Theater that will be delivered throughout the rest of the year.
?Orders for both Digital Theater and Spitz continued to be strong in the quarter and we expect to see this trend continue in the third quarter at a somewhat more modest rate. 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 third and fourth quarters.
?Development activity for our exciting laser projection technology continues on schedule at a significant rate. We are increasingly encouraged by the potential for this technology in the new markets identified in our advanced display business plan. These activities will continue throughout the year in anticipation of initial market entry in 2008.
?In the second quarter of 2007 we recorded $2 million of additional proceeds from the 2006 sale of our simulation business. The $2 million was released from escrow on July 3, 2007.
?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 share and per share data) | ||||||||||||||||
| Unaudited | ||||||||||||||||
Three Months |
Six Months | |||||||||||||||
June 29, |
June 30, |
June 29, |
June 30, | |||||||||||||
| Sales | $ | 6,547 | $ | 2,546 | $ | 10,904 | $ | 6,313 | ||||||||
| Cost of sales | 4,606 | 2,109 | 7,605 | 4,533 | ||||||||||||
| Gross profit | 1,941 | 437 | 3,299 | 1,780 | ||||||||||||
| Expenses: | ||||||||||||||||
| Selling, general and administrative | 2,332 | 3,886 | 4,401 | 4,462 | ||||||||||||
| Research and development | 2,478 | 2,604 | 4,803 | 4,539 | ||||||||||||
| Operating expenses | 4,810 | 6,490 | 9,204 | 9,001 | ||||||||||||
| Operating loss | (2,869 | ) | (6,053 | ) | (5,905 | ) | (7,221 | ) | ||||||||
| Other income (expense), net | 181 | 58 | 270 | (343 | ) | |||||||||||
| Loss from continuing operations before income taxes | (2,688 | ) | (5,995 | ) | (5,635 | ) | (7,564 | ) | ||||||||
| Income tax benefit | 363 | 2,200 | 775 | 2,774 | ||||||||||||
| Net loss from continuing operations | (2,325 | ) | (3,795 | ) | (4,860 | ) | (4,790 | ) | ||||||||
| Income (loss) from discontinued operations, net of tax | 15 | (1,795 | ) | 28 | (4,407 | ) | ||||||||||
| Gain (loss) on sale of discontinued operations, net of tax | 1,637 | 40,726 | 1,240 | 38,464 | ||||||||||||
| Net income from discontinued operations | 1,652 | 38,931 | 1,268 | 34,057 | ||||||||||||
| Net income (loss) | $ | (673 | ) | $ | 35,136 | $ | (3,592 | ) | $ | 29,267 | ||||||
| Net income (loss) per common share - basic and diluted: | ||||||||||||||||
Loss from continuing operations | $ | (0.21 | ) | $ | (0.35 | ) | $ | (0.44 | ) | $ | (0.45 | ) | ||||
| Net income from discontinued operations | $ | 0.15 | $ | 3.60 | $ | 0.11 | $ | 3.19 | ||||||||
| Net income (loss) | $ | (0.06 | ) | $ | 3.24 | $ | (0.32 | ) | $ | 2.74 | ||||||
| Weighted average common shares outstanding - basic and diluted: | 11,089 | 10,829 | 11,089 | 10,683 | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS INFORMATION | ||||||
| (In thousands) | ||||||
| Unaudited | ||||||
June 29, |
December 31, | |||||
| Assets | ||||||
| Cash and restricted cash | $ | 10,077 | $ | 16,182 | ||
| Net receivables, billed and unbilled | 8,341 | 7,064 | ||||
| Inventories | 8,023 | 6,713 | ||||
| Net property, plant and equipment | 12,424 | 12,689 | ||||
| Prepaid pension and retirement | 9,659 | 9,449 | ||||
| Other assets | 2,940 | 3,284 | ||||
| Total assets | $ | 51,464 | $ | 55,381 | ||
| Liabilities and stockholders' equity | ||||||
| Accounts payable and accrued expenses | $ | 6,002 | $ | 8,364 | ||
| Other liabilities | 26,206 | 24,635 | ||||
| Stockholders' equity | 19,256 | 22,382 | ||||
| Total liabilities and stockholders' equity | $ | 51,464 | $ | 55,381 | ||
| BACKLOG | |||
| (In thousands) | |||
| Unaudited | |||
June 29, |
December 31, | ||
| $ 30,366 | $ 20,408 | ||
Evans & Sutherland Computer Corporation, Salt Lake City
David
H. Bateman, 801-588-1674
dbateman@es.com
