Evans & Sutherland Computer Corporation (E&S) (OTCPK: ESCC)
today reported financial results in its Form 10-Q filing for the third
quarter and three and nine months ended October 2, 2015.
Sales for the third quarter were $9.4 million, compared to sales of $7.7
million for the third quarter 2014. Net income for the quarter was $0.9
million or $0.08 per share compared to a net income for the third
quarter 2014 of $0.6 million or $0.06 per share. Sales for the nine
months ended October 2, 2015 were $27.7 million, compared to sales of
$20.0 million for the comparable period of 2014. Net loss for the nine
months ended October 2, 2015 was $1.7 million or $0.15 per share
compared to a net loss of $0.8 million or $0.07 per share for the
comparable period of 2014. Backlog as of October 2, 2015 was $29.2
million compared to backlog of $28.2 million as of December 31, 2014.
Comments from David H. Bateman, President and Chief Executive
Officer: “The third quarter of 2015 reported improved sales volume
and $921 of net income compared to the third quarter of 2014, which
reported a net income of $639. Although sales volume improved, the gross
profit contribution was comparable to the third quarter of 2014 due to
unfavorable margins on some large unrelated projects in 2015. Reduced
operating expenses, primarily pension related, contributed to the higher
net income in the third quarter of 2015 compared to 2014. The first nine
months of 2015 reported improved sales volume and $9,710 of gross profit
as compared to the first nine months of 2014, which reported gross
profit of $7,371. The stronger sales and improved gross profit in 2015
was attributable to stronger sales bookings over the prior year. The
sales backlog remained healthy at the end of the third quarter of 2015
which supports an encouraging outlook for the remainder of 2015 and into
2016. Operating expenses, except for a $3,620 charge for the settlement
of the pension liabilities, were lower for the periods presented
primarily due to decreased pension expense in the period. 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
the three- and nine-month periods ended October 2, 2015. Also, we were
profitable in each of the first three quarters of 2015 before the
non-recurring pension related charges. With the healthy backlog and
sales prospects, we anticipate sales at levels that should continue to
yield profitable results for the remainder of 2015.
"We continue to 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. Although we reported
net income for the third quarter, we had a net loss for the first nine
months of 2015 due to the pension settlement charge of $3,620. However,
the pension settlement contributed largely to total comprehensive income
which amounted to $30,295 for the first nine months of 2015. This nearly
eliminated our stockholders deficit, which was reduced from $30,703 as
of December 31, 2014 to $308 as of October 2, 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.
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
INFORMATION
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(In thousands, except share and per share data)
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(Unaudited)
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Three Months Ended
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Nine Months Ended
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October 2, 2015
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September 26, 2014
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October 2, 2015
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September 26, 2014
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Sales
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$
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9,375
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$
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7,656
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$
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27,666
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$
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20,040
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Cost of sales
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(6,049
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(4,371
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(17,956
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(12,669
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Gross profit
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3,326
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3,285
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9,710
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7,371
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Operating expenses:
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Selling, general and administrative
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(1,535
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(1,637
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(5,132
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)
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(5,211
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Research and development
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(563
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(537
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(1,702
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(1,608
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Pension
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(49
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(359
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(473
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(777
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Pension settlement
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-
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-
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(3,620
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-
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Total operating expenses
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(2,147
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(2,533
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(10,927
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(7,596
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Operating income (loss)
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1,179
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752
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(1,217
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(225
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Other expense, net
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(231
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(192
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(404
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(567
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Loss before income tax benefit (provision)
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948
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560
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(1,621
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(792
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Income tax benefit (provision)
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(27
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79
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(55
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12
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Net income (loss)
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$
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921
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$
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639
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$
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(1,676
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$
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(780
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Net income (loss) per common share - basic and diluted
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$
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0.08
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$
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0.06
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$
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(0.15
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$
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(0.07
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)
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Comprehensive income (loss), net of tax
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Net income (loss)
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$
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921
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$
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639
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$
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(1,676
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$
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(780
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Other comprehensive income (loss):
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Reclassification of pension expense to net income (loss)
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$
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-
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$
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101
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$
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195
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$
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305
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Pension settlement
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-
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-
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31,776
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-
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Other comprehensive income
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-
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101
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31,971
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305
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Total comprehensive income (loss)
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$
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921
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$
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740
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$
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30,295
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$
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(475
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)
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CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
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(In thousands)
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(Unaudited)
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October 2, 2015
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December 31, 2014
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Assets
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Cash and restricted cash
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$
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4,260
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$
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7,749
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Net receivables, billed and unbilled
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9,643
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6,285
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Inventories, net
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5,023
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4,163
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Prepaid expenses and deposits
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773
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635
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Property, plant and equipment, net
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4,689
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4,803
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Intangibles and other assets
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1,728
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1,821
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Total assets
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$
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26,116
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$
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25,456
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Liabilities and stockholders' deficit
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Accounts payable and accrued expenses
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$
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2,677
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$
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1,852
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Customer advances and deposits
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8,982
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9,257
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Pension and retirement obligations
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4,642
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40,611
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Pension settlement obligation
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6,158
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-
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Debt obligations
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2,206
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2,362
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Other liabilities
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1,759
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2,077
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Stockholders' deficit
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(308
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(30,703
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Total liabilities and stockholders' deficit
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$
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26,116
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$
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25,456
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BACKLOG
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(In thousands)
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Unaudited
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October 2, 2015
|
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December 31, 2014
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$
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29,152
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$
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28,173
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E&S is a registered trademark of Evans & Sutherland Computer Corporation.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151109006509/en/
Copyright Business Wire 2015