Evans & Sutherland Computer Corporation (E&S) (OTCPK: ESCC)
today reported financial results in its Form 10-Q filing for the second
quarter and six months ended July 3, 2015.
Sales for the second quarter were $10.3 million, compared to sales of
$5.7 million for the second quarter 2014. Net loss for the quarter was
$2.7 million or $0.24 per share compared to a net loss for the second
quarter 2014 of $0.9 million or $0.08 per share. Sales for the six
months ended July 3, 2015 were $18.3 million, compared to sales of $12.4
million for the comparable period of 2014. Net loss for the six months
ended July 3, 2015 was $2.6 million or $0.23 per share compared to a net
loss of $1.4 million or $0.13 per share for the comparable period of
2014. Backlog as of July 3, 2015 was $26.7 million compared to backlog
of $28.2 million as of December 31, 2014.
Comments from David H. Bateman, President and Chief Executive
Officer: “On April 21, 2015 the Company executed an agreement with
the Pension Benefit Guaranty Corporation (PBGC) to terminate its pension
plan and settle the underlying pension liabilities. This is a major
milestone and completes a process that began over two years ago. The
Company’s goal in seeking a distress termination of the pension plan is
to ensure that pension benefits of all pension plan participants are
paid up to the federally guaranteed limits and that the Company
continues to operate as a going concern while avoiding the costly damage
and disruption to the business which would result from bankruptcy
reorganization. We believe the settlement agreement has achieved that
goal.
The first half of 2015 reported improved sales volume and $6.4 million
of gross profit as compared to the first six months ended June 27, 2014,
which reported gross profit of $4.1 million. The stronger sales and
improved gross profit in 2015 was attributable to stronger sales
bookings over the past year. The sales backlog remained healthy despite
decreasing in the first half of 2015 which supports a continuing
encouraging outlook for the remainder of 2015. Operating expenses except
for a $3.6 million charge for the settlement of the pension liabilities
were comparable for the periods presented. The charge for the settlement
of the pension liabilities is not a recurring expense item. Absent this
charge, results would have been profitable for both periods presented.
With the healthy backlog and strong sales prospects, we anticipate that
sales and overall results for the remainder of 2015 will exceed the
results from 2014.
We continue to expect variable but reasonable consistent future sales
and gross profits from our current product lines at annual levels
sufficient to cover or exceed operating expenses. We had a net loss for
the three and six months ended July 3, 2015 due to the pension
settlement charge of $3.6 million. However, the pension settlement
contributed largely to total comprehensive income which amounted to
$29.1 million and $29.4 million for the three and six months ended July
3, 2015 respectively. This nearly eliminated our stockholders deficit,
which was reduced from $30.7 million as of December 31, 2014 to $1.2
million as of July 3, 2015. With the settlement of the Pension Plan
liabilities, we expect an improved financial position that may present
opportunities for better results through the availability of credit and
stronger qualification for customer projects. We remain positive for the
success of the business. ”
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
|
|
|
July 3, 2015
|
|
June 27, 2014
|
|
July 3, 2015
|
|
June 27, 2014
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
10,289
|
|
|
$
|
5,712
|
|
|
$
|
18,291
|
|
|
$
|
12,384
|
|
Cost of sales
|
|
|
(6,896
|
)
|
|
|
(3,770
|
)
|
|
|
(11,907
|
)
|
|
|
(8,298
|
)
|
Gross profit
|
|
|
3,393
|
|
|
|
1,942
|
|
|
|
6,384
|
|
|
|
4,086
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
(1,755
|
)
|
|
|
(1,826
|
)
|
|
|
(3,597
|
)
|
|
|
(3,574
|
)
|
Research and development
|
|
|
(544
|
)
|
|
|
(511
|
)
|
|
|
(1,139
|
)
|
|
|
(1,071
|
)
|
Pension
|
|
|
(49
|
)
|
|
|
(209
|
)
|
|
|
(424
|
)
|
|
|
(418
|
)
|
Pension settlement
|
|
|
(3,620
|
)
|
|
|
-
|
|
|
|
(3,620
|
)
|
|
|
-
|
|
Total operating expenses
|
|
|
(5,968
|
)
|
|
|
(2,546
|
)
|
|
|
(8,780
|
)
|
|
|
(5,063
|
)
|
Operating income (loss)
|
|
|
(2,575
|
)
|
|
|
(604
|
)
|
|
|
(2,396
|
)
|
|
|
(977
|
)
|
Other expense, net
|
|
|
(148
|
)
|
|
|
(206
|
)
|
|
|
(173
|
)
|
|
|
(375
|
)
|
Loss before income tax benefit (provision)
|
|
|
(2,723
|
)
|
|
|
(810
|
)
|
|
|
(2,569
|
)
|
|
|
(1,352
|
)
|
Income tax benefit (provision)
|
|
|
23
|
|
|
|
(58
|
)
|
|
|
(28
|
)
|
|
|
(67
|
)
|
Net loss
|
|
$
|
(2,700
|
)
|
|
$
|
(868
|
)
|
|
$
|
(2,597
|
)
|
|
$
|
(1,419
|
)
|
|
|
|
|
|
|
|
|
|
Net loss per common share - basic and diluted
|
|
$
|
(0.24
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,700
|
)
|
|
$
|
(868
|
)
|
|
$
|
(2,597
|
)
|
|
$
|
(1,419
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
Reclassification of pension expense to net loss
|
|
$
|
-
|
|
|
$
|
101
|
|
|
$
|
195
|
|
|
$
|
204
|
|
Pension settlement
|
|
|
31,776
|
|
|
|
-
|
|
|
|
31,776
|
|
|
|
-
|
|
Other comprehensive income
|
|
|
31,776
|
|
|
|
101
|
|
|
|
31,971
|
|
|
|
204
|
|
Total comprehensive income (loss)
|
|
$
|
29,076
|
|
|
$
|
(767
|
)
|
|
$
|
29,374
|
|
|
$
|
(1,215
|
)
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
July 3, 2015
|
|
December 31, 2014
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and restricted cash
|
|
$
|
2,720
|
|
|
$
|
7,749
|
|
|
|
|
|
Net receivables, billed and unbilled
|
|
|
11,129
|
|
|
|
6,285
|
|
|
|
|
|
Inventories, net
|
|
|
5,079
|
|
|
|
4,163
|
|
|
|
|
|
Prepaid expenses and deposits
|
|
|
1,570
|
|
|
|
635
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
4,707
|
|
|
|
4,803
|
|
|
|
|
|
Intangibles and other assets
|
|
|
1,800
|
|
|
|
1,821
|
|
|
|
|
|
Total assets
|
|
$
|
27,005
|
|
|
$
|
25,456
|
|
|
|
|
|
|
|
Liabilities and stockholders' deficit
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
3,134
|
|
|
$
|
1,852
|
|
|
|
|
|
Customer advances and deposits
|
|
|
10,115
|
|
|
|
9,257
|
|
|
|
|
|
Pension and retirement obligations
|
|
|
4,719
|
|
|
|
40,611
|
|
|
|
|
|
Pension settlement obligation
|
|
|
6,158
|
|
|
|
-
|
|
|
|
|
|
Debt obligations
|
|
|
2,253
|
|
|
|
2,362
|
|
|
|
|
|
Other liabilities
|
|
|
1,865
|
|
|
|
2,077
|
|
|
|
|
|
Stockholders' deficit
|
|
|
(1,239
|
)
|
|
|
(30,703
|
)
|
|
|
|
|
Total liabilities and stockholders' deficit
|
|
$
|
27,005
|
|
|
$
|
25,456
|
|
|
|
|
|
|
|
BACKLOG
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
July 3, 2015
|
|
December 31, 2014
|
|
|
|
|
|
|
$
|
26,707
|
|
|
$
|
28,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&S is a registered trademark of Evans & Sutherland Computer Corporation.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150814005535/en/
Copyright Business Wire 2015