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[EVANS & SUTHERLAND LOGO]
| 600 KOMAS DRIVE | NEWS RELEASE | |
| Salt Lake City, UT 84108 USA | For Immediate Release |
EVANS & SUTHERLAND REPORTS SECOND QUARTER RESULTS
Salt Lake City, Utah, July 17, 2003—Evans & Sutherland Computer Corporation (E&S) (NASDAQ: ESCC) today reported financial results for the three months ended June 27, 2003. All results are unaudited.
For the three months ended June 27, 2003, E&S reported total sales of $22.2 million, compared to $34.2 million in the same period of 2002, and an operating loss prior to one-time gains of $3.4 million, compared to $3.9 million in the same period of the previous year. The net loss was $2.6 million, or $.25 per share, compared to a net loss of $0.7 million, or $0.07 per share in 2002.
Comments from James R. Oyler, President and Chief Executive Officer
"Overall, the second quarter continued favorable trends for the company, with both backlog and market share increasing. Revenue and gross margins remained flat from the previous quarter, but operating expenses declined significantly, and cash flow was positive.
"Based on the increase in backlog, we expect revenue to increase in the third quarter, and we also expect expenses to decrease further. This combination would result in continued improvement in operating results."
About Evans & Sutherland
Evans & Sutherland produces high-quality visual systems for simulation, training, and visualization in defense and commercial applications; digital theaters; and related applications throughout the world. Visit the E&S Web site athttp://www.es.com.
The company will host a conference call beginning at 12:00 p.m. EDT today, July 17, 2003, to discuss its financial results for the three-month period ended June 27, 2003. To hear a broadcast of the conference call, visit the Investor Broadcast Network Web site at http://www.vcall.com or the company's Web site at http://www.es.com. (If you are unable to listen to the conference call at 12:00 p.m. EDT today, a replay will be available in the Investor Relations section of the company's Web site.)
Statements in this press release which are not historical, including statements regarding E&S or management intentions, beliefs, expectations, representations, plans, or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements that we expect revenue to increase and expenses to decrease in the third quarter, and that this combination would result in continued improvement in operating results. It is important to note that E&S's actual results could differ materially from such forward-looking statements. Various factors could cause actual results to differ materially, such as the risk factors listed from time to time in E&S's SEC reports, including but not limited to, the annual report on Form 10-K for the year ended December 31, 2002.
E&S is a registered trademark of Evans & Sutherland Computer Corporation.
SUMMARY STATEMENTS OF CONSOLIDATED OPERATIONS
(In thousands, except per share data)
Unaudited
| | Three Months Ended | Six Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | June 27, 2003 | June 28, 2002 | June 27, 2003 | June 28, 2002 | |||||||||||
| Sales | $ | 22,196 | $ | 34,221 | $ | 44,889 | $ | 66,784 | |||||||
| Cost of sales | 13,558 | 22,038 | 27,428 | 45,007 | |||||||||||
| Inventory impairment | — | — | 14,566 | — | |||||||||||
| Gross profit | 8,638 | 12,183 | 2,895 | 21,777 | |||||||||||
| Expenses: | |||||||||||||||
| Selling, general and administrative | 6,906 | 7,478 | 14,163 | 14,051 | |||||||||||
| Research and development | 5,093 | 6,646 | 12,123 | 13,027 | |||||||||||
| Restructuring charge | — | 1,921 | 1,279 | 1,921 | |||||||||||
| Impairment loss | — | — | 1,151 | — | |||||||||||
| Operating expenses | 11,999 | 16,045 | 28,716 | 28,999 | |||||||||||
| Operating loss prior to one-time gains | (3,361 | ) | (3,862 | ) | (25,821 | ) | (7,222 | ) | |||||||
Gain on sale of assets held for sale | 1,406 | — | 1,406 | ||||||||||||
| Gain on curtailment of pension plan | — | 3,575 | — | 3,575 | |||||||||||
| Gain on sale of business unit | — | — | — | 96 | |||||||||||
| Operating loss | (1,955 | ) | (287 | ) | (24,415 | ) | (3,551 | ) | |||||||
| Other income (expense), net | (498 | ) | (362 | ) | (1,338 | ) | (970 | ) | |||||||
| Loss before income taxes | (2,453 | ) | (649 | ) | (25,753 | ) | (4,521 | ) | |||||||
| Income tax expense (benefit) | 119 | 75 | (149 | ) | (608 | ) | |||||||||
| Net loss | $ | (2,572 | ) | $ | (724 | ) | $ | (25,604 | ) | $ | (3,913 | ) | |||
| Diluted net loss per share | $ | (0.25 | ) | $ | (0.07 | ) | $ | (2.45 | ) | $ | (0.38 | ) | |||
| Number of shares used in net loss per share calculation | 10,469 | 10,424 | 10,464 | 10,410 | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Unaudited
| | June 27, 2003 | Dec. 31, 2002 | | | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 10,479 | $ | 10,335 | ||||||||
| Receivables, billed and unbilled | 33,681 | 44,564 | ||||||||||
| Inventories | 18,657 | 31,373 | ||||||||||
| Other assets | 8,738 | 13,017 | ||||||||||
| Net property, plant and equipment | 25,199 | 28,287 | ||||||||||
| Total assets | $ | 96,754 | $ | 127,576 | ||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Accounts payable and accruals | $ | 21,539 | $ | 22,764 | ||||||||
| Other liabilities | 47,265 | 51,449 | ||||||||||
| Stockholders' equity | 27,950 | 53,363 | ||||||||||
| Total liabilities and stockholders' equity | $ | 96,754 | $ | 127,576 | ||||||||
BACKLOG
(In thousands)
Unaudited
| | June 27, 2003 | Dec. 31, 2002 | | | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| $ | 74,998 | $ | 59,672 | |||||||
###
Contact:
Thomas Atchison
Chief Financial Officer
Evans & Sutherland
600 Komas Drive, Salt Lake City, UT 84108
801-588-1125
tatchiso@es.com