Evans & Sutherland Computer Corporation (E&S) (NASDAQ: ESCC) today reported financial results in its Form 10-Q filing for the third quarter ended September 26, 2008.
Sales for the third quarter were $8.0 million, compared to sales of $6.7 million for the third quarter 2007. Net loss from continuing operations for the quarter was $1.2 million or $0.10 per share compared to a net loss from continuing operations for the third quarter 2007 of $1.7 million or $0.15 per share. Backlog as of September 26, 2008 was $27.5 million compared to backlog of $28.5 million as of December 31, 2007.
Comments from David H. Bateman, President and Chief Executive Officer: "The third quarter of 2008 continued to show positive progress for E&S in all areas of our business.
On September 3, 2008 we received approval from the Nasdaq Listing Qualifications Staff to transfer the listing of E&S's securities from The Nasdaq Global Market to The Nasdaq Capital Market. The resolution of this matter allows us to concentrate on the continuing efforts to improve business performance.
Since the onset of the current turbulence in the financial markets, we have been keenly watching to see any signs of impact on our business. To date, both current and prospective customer projects are proceeding normally. We will continue to monitor this situation.
Results for the third quarter and first nine months of 2008 were improved as compared to the comparable periods of 2007. Progress continued in all areas of the business with increased sales and improved margins. Operating expenses also remain under control.
For the remainder of 2008 and into 2009, we expect continuing profit growth from our digital theater and dome products, with orders and revenue remaining strong and operating efficiencies improving further. In advanced display product development, we will continue to improve our current products as well as significantly advance the development of new laser based products for both current and new markets. These steps will bring us closer to realizing the benefits of our considerable investment in laser display technology and products.
With the continuing positive trends we are experiencing in all areas of our business, we expect further improvements in financial performance in the remainder of 2008 and beyond."
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; 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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CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||
Unaudited | ||||||||||||||||
 | Three Months Ended |  | Nine Months Ended | |||||||||||||
September 26, 2008 |  | September 28, 2007 | September 26, 2008 |  | September 28, 2007 | |||||||||||
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Sales | $ | 7,999 | $ | 6,706 | $ | 26,016 | $ | 17,610 | ||||||||
Cost of sales |  | 4,939 |  |  | 4,148 |  |  | 15,807 |  |  | 11,753 |  | ||||
Gross profit | 3,060 | 2,558 | 10,209 | 5,857 | ||||||||||||
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Expenses: | ||||||||||||||||
Selling, general and administrative | 1,999 | 1,900 | 6,878 | 6,301 | ||||||||||||
Research and development |  | 2,128 |  |  | 2,705 |  |  | 6,954 |  |  | 7,508 |  | ||||
Operating expenses |  | 4,127 |  |  | 4,605 |  |  | 13,832 |  |  | 13,809 |  | ||||
Operating loss | (1,067 | ) | (2,047 | ) | (3,623 | ) | (7,952 | ) | ||||||||
Other income (expense), net |  | (81 | ) |  | 170 |  |  | (121 | ) |  | 440 |  | ||||
Loss from continuing operations before income taxes | (1,148 | ) | (1,877 | ) | (3,744 | ) | (7,512 | ) | ||||||||
Income tax benefit |  | - |  |  | 190 |  |  | 93 |  |  | 775 |  | ||||
Net loss from continuing operations |  | (1,148 | ) |  | (1,687 | ) |  | (3,651 | ) |  | (6,737 | ) | ||||
Income (loss) from discontinued operations, net of tax | 34 | 123 | (48 | ) | 151 | |||||||||||
Gain (loss) on sale of discontinued operations, net of tax |  | - |  |  | (190 | ) |  | (1 | ) |  | 1,240 |  | ||||
Net income (loss) from discontinued operations |  | 34 |  |  | (67 | ) |  | (49 | ) |  | 1,391 |  | ||||
Net loss | $ | (1,114 | ) | $ | (1,754 | ) | $ | (3,700 | ) | $ | (5,346 | ) | ||||
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Net loss per common share - basic and diluted: | ||||||||||||||||
Net loss from continuing operations | $ | (0.10 | ) | $ | (0.15 | ) | $ | (0.33 | ) | $ | (0.61 | ) | ||||
Net income (loss) from discontinued operations | $ | 0.00 |  | $ | (0.01 | ) | $ | (0.00 | ) | $ | 0.13 |  | ||||
Net loss | $ | (0.10 | ) | $ | (0.16 | ) | $ | (0.33 | ) | $ | (0.48 | ) | ||||
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Weighted average common shares outstanding - basic and diluted: | 11,089 | 11,089 | 11,089 | 11,089 | ||||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS INFORMATION | ||||||||||||||||
Unaudited | ||||||||||||||||
September 26, | December 31, | |||||||||||||||
Assets | ||||||||||||||||
Cash and restricted cash | $ | 8,298 | $ | 12,588 | ||||||||||||
Net receivables, billed and unbilled | 8,213 | 5,900 | ||||||||||||||
Inventories | 10,414 | 7,360 | ||||||||||||||
Other current assets | 1,261 | 1,652 | ||||||||||||||
Net property, plant and equipment | 11,412 | 12,010 | ||||||||||||||
Prepaid pension and retirement | 4,231 | 5,568 | ||||||||||||||
Intangibles and other assets |  | 1,331 |  |  | 1,531 |  | ||||||||||
Total assets | $ | 45,160 |  | $ | 46,609 |  | ||||||||||
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Liabilities and stockholders' equity | ||||||||||||||||
Accounts payable and accrued expenses | $ | 6,425 | $ | 6,636 | ||||||||||||
Customer advances and deposits | 12,812 | 10,094 | ||||||||||||||
Pension and retirement obligations | 10,229 | 10,117 | ||||||||||||||
Debt obligations | 111 | 2,844 | ||||||||||||||
Other liabilities | 4,983 | 1,785 | ||||||||||||||
Stockholders' equity |  | 10,600 |  |  | 15,133 |  | ||||||||||
Total liabilities and stockholders' equity | $ | 45,160 |  | $ | 46,609 |  | ||||||||||
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BACKLOG | ||||||||||||||||
(In thousands) Unaudited | ||||||||||||||||
September 26, | December 31, | |||||||||||||||
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$ | 27,486 |  | $ | 28,509 |  |
E&S is a registered trademark of Evans & Sutherland Computer Corporation.