Evans & Sutherland Computer Corp. (ESCC, Financial) filed Quarterly Report for the period ended 2009-06-26.
Evans & Sutherland Computer Corporation is an established high-technology company with outstanding computer graphics technology and a worldwide presence in high-performance 3D visual simulation. In addition E&S applies its core technology into higher-growth personal computer products for both simulation and workstations. Evans & Sutherland Computer Corp. has a market cap of $2.57 million; its shares were traded at around $0.35 with and P/S ratio of 0.07.
Our gross profit decreased in the second quarter of 2009 compared to the second quarter of 2008 due primarily to a high margin on sales of $1,050 in the second quarter of 2008 that was related to the settlement of a laser development agreement. Our gross profit decreased for the first half of 2009 compared to 2008 due to loss on inventory impairment of $1,292 for obsolete and excess quantities of inventory related to ESLP. The primary reason for the impairment was due to a change to an alternative design of the ESLP that was viewed to be more favorable than the previously planned design for several upcoming ESLP deliveries. As a result, we identified inventory materials which are not likely to be used and recorded an impairment loss on inventory equal to the value of those materials.
In the first six months of 2009 the $3,679 of cash used in operations was primarily attributable to $3,983 of cash absorbed by the net loss after the effect of $2,299 of non-cash items. The cash absorbed by the loss was partially offset by $304 of cash provided by fluctuations in working capital. Significant fluctuations in working capital in the first six months which provided cash included a decrease in accounts receivable and pension and retirement obligations which was partly offset by a decrease in cash provided by progress payments received on customer contracts and an increase in inventories. The decrease in customer progress payments during the first six months of the year corresponded to lower bookings of new customer orders and related deliveries of product. The fluctuations in working capital for the six month period were within the normal range expected from business activities.
As of June 26, 2009 our wholly owned Spitz subsidiary had obligations totaling $3,193 under its two mortgage notes payable. The balance of theses mortgage notes payable as of June 26, 2009 was $2,702 and $491.
On June 26, 2009, our backlog was $17,525 compared with $20,432 at December 31, 2008.
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Evans & Sutherland Computer Corporation is an established high-technology company with outstanding computer graphics technology and a worldwide presence in high-performance 3D visual simulation. In addition E&S applies its core technology into higher-growth personal computer products for both simulation and workstations. Evans & Sutherland Computer Corp. has a market cap of $2.57 million; its shares were traded at around $0.35 with and P/S ratio of 0.07.
Highlight of Business Operations:
Revenue and gross profit contributions from our digital theater and dome products declined in the first six months of 2009 as compared to 2008. The decreased revenue and gross profit contributed to an increased net loss that, along with changes in working capital, resulted in cash absorbed by operations amounting to approximately $3.7 million in the first six months of 2009. After capital expenditures and principal payments on debt, the total decrease in cash amounted to approximately $4 million. While the net loss and cash decline was more than anticipated for the six month period, most was attributable to the first quarter. The total cash decline for the second quarter was $1 million as compared to $3 million in the first quarter of 2009. Operating expenses in the second quarter of 2009 continued at levels required to support our plan to develop and market the Evans & Sutherland Laser Projector (“ESLP”), albeit lower than 2008 excluding pension expense. The increased pension expense was anticipated and is expected to continue in 2009, however it will require no cash payments in 2009. Also contributing to the increased net loss was a loss on impairment of inventory related to a change in the design configuration of upcoming ESLP deliveries.Our gross profit decreased in the second quarter of 2009 compared to the second quarter of 2008 due primarily to a high margin on sales of $1,050 in the second quarter of 2008 that was related to the settlement of a laser development agreement. Our gross profit decreased for the first half of 2009 compared to 2008 due to loss on inventory impairment of $1,292 for obsolete and excess quantities of inventory related to ESLP. The primary reason for the impairment was due to a change to an alternative design of the ESLP that was viewed to be more favorable than the previously planned design for several upcoming ESLP deliveries. As a result, we identified inventory materials which are not likely to be used and recorded an impairment loss on inventory equal to the value of those materials.
In the first six months of 2009 the $3,679 of cash used in operations was primarily attributable to $3,983 of cash absorbed by the net loss after the effect of $2,299 of non-cash items. The cash absorbed by the loss was partially offset by $304 of cash provided by fluctuations in working capital. Significant fluctuations in working capital in the first six months which provided cash included a decrease in accounts receivable and pension and retirement obligations which was partly offset by a decrease in cash provided by progress payments received on customer contracts and an increase in inventories. The decrease in customer progress payments during the first six months of the year corresponded to lower bookings of new customer orders and related deliveries of product. The fluctuations in working capital for the six month period were within the normal range expected from business activities.
As of June 26, 2009 our wholly owned Spitz subsidiary had obligations totaling $3,193 under its two mortgage notes payable. The balance of theses mortgage notes payable as of June 26, 2009 was $2,702 and $491.
On June 26, 2009, our backlog was $17,525 compared with $20,432 at December 31, 2008.
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