Evans & Sutherland Reports Second Quarter 2013 Results

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Evans & Sutherland Reports Second Quarter 2013 Results

SALT LAKE CITY--(BUSINESS WIRE)-- Evans & Sutherland ComputerCorporation (E&S) (OTCPK: ESCC) today reported financial results in its Form 10-Q filing for the second quarter and six months ended June 28, 2013.

Sales for the second quarter were $5.2 million, compared to sales of $4.7 million for the second quarter 2012. Net loss for the quarter was $0.4 million or $0.04 per share compared to a net loss for the second quarter 2012 of $1.5 million or $0.13 per share. Sales for the six months ended June 28, 2013 were $9.9 million, compared to sales of $12.6 million for the comparable period of 2012. Net loss for the six months ended June 28, 2013 was $1.8 million or $0.16 per share compared to a net loss of $1.1 million or $0.10 per share for the comparable period of 2012. Backlog as of June 28, 2013 was $21.9 million compared to backlog of $15.5 million as of December 31, 2012. Operating expenses for the second quarter totaled $2.0 million compared to $2.5 million for the second quarter of 2012.


Comments from David H. Bateman, President and Chief Executive Officer: "Sales for the second quarter of 2013 were slightly higher than the comparable period of 2012, but still lower than average quarterly sales in recent years. Sales for the first six months of 2013 were lower than the comparable period of 2012 and also lower than comparable periods of recent years. The low 2013 sales are the result of low 2012 sales bookings and the timing of customer deliveries. New customer bookings improved in the first six months of 2013 and as a result, the sales backlog increased to $21.9 million compared to $15.5 million as of December 31, 2012. The gross profit percentage for the second quarter of 2013 improved as expected, but remained lower for the first six months of 2013 than the comparable period of 2012. We expect the gross profit percentage for the remainder of 2013 to improve with the higher expected sales. For the long term, we believe the existing markets we serve will yield annual sales at levels comparable to recent years.

"Total operating expenses in the second quarter and first six months of 2013 decreased compared to the same periods in 2012 due primarily to a decrease in pension expense. The drop in pension expense was attributable to high settlement charges for 2012 lump sum distributions. Since filing the application for distress termination in January 2013, the pension plan is prohibited from making lump sum distributions. Otherwise operating expenses were comparable to the periods presented.

"With our expectations for improved sales for the remainder of 2013, we expect improved results that may fluctuate between the remaining two quarters. We do not expect annual net income for 2013. For the longer term we expect variable but reasonably consistent future sales and gross profits from our current product line at annual levels sufficient to cover or exceed operating expenses, excluding the pension expense."

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 Company's ability to successfully market both new and existing products domestically and internationally; difficulties or delays in manufacturing; results of the Board's evaluation of alternatives available to enhance value for shareholders; and 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.

         
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS INFORMATION
(In thousands, except share and per share data)
(Unaudited)
 Three Months Ended Six Months Ended
June 28, 2013 June 29, 2012June 28, 2013 June 29, 2012
 
Sales$5,212$4,746$9,919$12,563
Cost of sales 3,480  3,540  6,877  8,088 
Gross profit 1,732  1,206  3,042  4,475 
 
Operating expenses:
Selling, general and administrative (excluding pension)1,1811,2792,7462,751
Research and development6746601,3441,264
Pension 161  554  369  1,109 
Total operating expenses 2,016  2,493  4,459  5,124 
Operating loss(284)(1,287)(1,417)(649)
Other expense, net (141) (184) (355) (401)
Loss before income tax provision(425)(1,471)(1,772)(1,050)
Income tax provision -  (13) (10) (74)
Net loss$(425)$(1,484)$(1,782)$(1,124)
 
Net loss per common share - basic and diluted$(0.04)$(0.13)$(0.16)$(0.10)
 
Comprehensive Loss
Net loss$(425)$(1,484)$(1,782)$(1,124)
Other comprehensive income (loss):
Amortization of deferred pension expense182-364-
Unrealized gain (loss) on marketable securities (18) (64) (11) 104 
Comprehensive loss$(261)$(1,548)$(1,429)$(1,020)
 
         
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
(In thousands)
(Unaudited)
June 28, 2013December 31, 2012
Assets
Cash and restricted cash$3,797$2,816
Marketable securities464712
Net receivables, billed and unbilled5,4476,446
Inventories, net3,5083,125
Prepaid expenses and deposits484453
Property, plant and equipment, net7,4717,735
Intangibles and other assets 2,310  2,963 
Total assets$23,481 $24,250 
 
Liabilities and stockholders' deficit
Accounts payable and accrued expenses$2,131$2,471
Customer advances and deposits7,0975,711
Pension and retirement obligations33,47933,886
Debt obligations5,3325,315
Other liabilities1,5051,511
Stockholders' deficit (26,063) (24,644)
Total liabilities and stockholders' deficit$23,481 $24,250 
         
BACKLOG

(In thousands)

Unaudited
June 28, 2013December 31, 2012
 
$21,900 $15,511 

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



Evans & Sutherland
David H. Bateman, 801-588-1674
President and CEO
dbateman@es.com

KEYWORDS:   United States  North America  Utah

INDUSTRY KEYWORDS:

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