-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A1nQb/AJ9koxN3gKH5EiCZ+9n2gInhuwutzGDPk8g8vDsGksbAXJqADLU9H5yGE0 NImkZ4YJht2jJg5MeRzCNw== 0000276283-98-000007.txt : 19980512 0000276283-98-000007.hdr.sgml : 19980512 ACCESSION NUMBER: 0000276283-98-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980327 FILED AS OF DATE: 19980511 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVANS & SUTHERLAND COMPUTER CORP CENTRAL INDEX KEY: 0000276283 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 870278175 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08771 FILM NUMBER: 98615087 BUSINESS ADDRESS: STREET 1: 600 KOMAS DR CITY: SALT LAKE CITY STATE: UT ZIP: 84108 BUSINESS PHONE: 8015881000 MAIL ADDRESS: STREET 1: 600 KOMAS DR CITY: SALT LAKE CITY STATE: UT ZIP: 84108 10-Q 1 QUARTERLY REPORT ON FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 27, 1998 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ________ to ________ Commission File Number 0-8771 Evans & Sutherland Computer Corporation (Exact name of registrant as specified in its charter) UTAH 87-0278175 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 600 Komas Drive, Salt Lake City, Utah 84108 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (801) 588-1000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding Shares at May 1, 1998 - ---------------------------------- --------------------------------- Common Stock, $0.20 par value 8,938,067 1 Form 10-Q Evans & Sutherland Computer Corporation QUARTER ENDED March 27, 1998 Page No. PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements Condensed Consolidated Statements of Operations - Three Months Ended March 27, 1998 and March 28, 1997 3 Condensed Consolidated Balance Sheets - March 27, 1998 and December 31, 1997 4 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 27, 1998 and March 28, 1997 5 Notes to Condensed Consolidated Financial Statements 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 13 Signature Page 13
2 PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS EVANS & SUTHERLAND COMPUTER CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands except per share amounts) Three Months Ended ------------------------------- March 27, March 28, 1998 1997 -------------- -------------- Net sales $ 42,421 $ 33,642 Cost of sales 25,296 18,514 -------------- -------------- Gross profit 17,125 15,128 -------------- -------------- Expenses: Marketing, general and administrative 8,641 7,844 Research and development 6,677 5,846 -------------- -------------- Total expenses 15,318 13,690 -------------- -------------- Operating earnings 1,807 1,438 Other income, net 546 577 -------------- -------------- Earnings before income taxes 2,353 2,015 Income taxes 764 604 -------------- -------------- Net earnings $ 1,589 $ 1,411 ============== ============== Earnings per common share (note 1): Basic $ 0.18 $ 0.16 Diluted $ 0.17 $ 0.15 3 EVANS & SUTHERLAND COMPUTER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except share data)
March 27, December 31, 1998 1997 ------------------- ----------------- Assets (Unaudited) ------ Current assets: Cash and cash equivalents $ 11,596 $ 8,176 Marketable securities 31,419 48,928 Accounts receivable, less allowance for doubtful receivables of $889 in 1998 and $851 in 1997 34,735 36,066 Inventories (note 2) 28,354 26,885 Costs and estimated earnings in excess of billings on uncompleted contracts 59,679 51,799 Deferred income taxes 5,163 4,224 Prepaid expenses and deposits 3,868 3,620 ------------------- ----------------- Total current assets 174,814 179,698 Property, plant, and equipment, at cost 124,877 123,168 Less accumulated depreciation and amortization 80,675 78,800 ------------------- ----------------- Net property, plant, and equipment 44,202 44,368 Investment securities 5,230 5,000 Deferred income taxes 3,687 3,802 Other assets 1,505 1,522 ------------------- ----------------- Total assets $ 229,438 $ 234,390 =================== ================= Liabilities and Stockholders' Equity --------------------------------- Current liabilities: Notes payable to banks $ - $ 950 Accounts payable 13,635 14,353 Accrued expenses 16,616 18,061 Customer deposits 8,818 6,574 Income taxes payable 3,233 4,462 Billings in excess of costs and estimated earnings on uncompleted contracts 6,504 6,341 ------------------- ----------------- Total current liabilities 48,806 50,741 Long-term debt 18,015 18,015 Stockholders' equity: Common stock, $.20 par value; authorized 30,000,000 shares; issued and outstanding 8,934,036 shares at March 27, 1998 and 9,066,743 shares at December 31, 1997 1,787 1,813 Additional paid-in capital 3,213 8,025 Retained earnings 157,164 155,576 Net unrealized gain (loss) on marketable securities 110 (68) Cumulative translation adjustment 343 288 ------------------- ----------------- Total stockholders' equity 162,617 165,634 ------------------- ----------------- Total liabilities and stockholders' equity $ 229,438 $ 234,390 =================== =================
4 EVANS & SUTHERLAND COMPUTER CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (In thousands)
Three Months Ended ------------------------------------ March 27, March 28, 1998 1997 ------------- --------------- Net cash provided by (used in) operating activities $(6,314) $ 3,969 Cash flows from investing activities: Capital expenditures (1,907) (2,851) Purchases of marketable securities - (9,211) Proceeds from sale of marketable securities 17,680 4,131 Purchases of investment securities (125) - ------------- --------------- Net cash provided by (used in) investing activities 15,648 (7,931) Cash flows from financing activities: Net proceeds from issuance of common stock 998 377 Net payments under line of credit agreement (942) (616) Purchase of treasury stock (5,837) - ------------- --------------- Net cash used in financing activities (5,781) (239) Effect of foreign exchange rate changes on cash (133) 199 ------------- --------------- Net increase (decrease) in cash and cash equivalents 3,420 (4,002) Cash and cash equivalents at beginning of period 8,176 16,521 ------------- --------------- Cash and cash equivalents at end of period $ 11,596 $ 12,519 ============= =============== Supplemental disclosures of cash flow information Cash paid during the period for: Interest $ 573 $ 607 Income taxes $ 2,897 $ 17
5 EVANS & SUTHERLAND COMPUTER CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands) 1. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary for a complete presentation of the results of operations, the financial position, and cash flows, in conformity with generally accepted accounting principles. This report on Form 10-Q for the three months ended March 27, 1998 should be read in conjunction with the Company's annual report on Form 10-K for the year ended December 31, 1997. The accompanying unaudited condensed consolidated balance sheets, statements of operations and cash flows reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the Company's financial position, results of operations and cash flows. The results of operations for the interim period ended March 27, 1998 are not necessarily indicative of the results to be expected for the full year. Earnings Per Common Share Earnings per common share is computed based on the weighted-average number of common shares and, as appropriate, dilutive common stock equivalents outstanding during the period. Stock options are considered to be common stock equivalents. Basic earnings per common share is the amount of earnings for the period available to each share of common stock outstanding during the reporting period. Diluted earnings per share is the amount of earnings for the period available to each share of common stock outstanding during the reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the period. In calculating earnings per common share, the earnings were the same for both the basic and diluted calculation. A reconciliation between the basic and diluted weighted-average number of common shares for the first quarters of 1998 and 1997, is summarized as follows (in thousands):
Quarter Ended Quarter Ended March 27, March 28, 1998 1997 ------------- ------------- (Unaudited) Basic weighted-average number of common shares outstanding during the period 9,079 9,067 Weighted-average number of common stock options outstanding during the period 381 373 ------------- ------------- Diluted weighted-average number of common shares outstanding during the period 9,460 9,440 ============= =============
6 EVANS & SUTHERLAND COMPUTER CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands) 2. INVENTORIES Inventories consist of the following: March 27, December 31, 1998 1997 ----------- ---------- (Unaudited) Raw materials and supplies $ 16,185 $ 13,674 Work-in-process 8,703 10,040 Finished goods 3,466 3,171 ----------- ---------- $ 28,354 $ 26,885 =========== ========== 3. COMPREHENSIVE EARNINGS The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS 130), "Reporting Comprehensive Income", effective January 1, 1998. SFAS 130 establishes standards for reporting and displaying comprehensive earnings and its components in financial statements. The components of the Company's comprehensive earnings are as follows:
Quarter Ended Quarter Ended March 27, March 28, 1998 1997 ---------- ---------- (Unaudited) Net earnings $ 1,589 $ 1,411 Unrealized gain (loss) on marketable securities, net of income taxes and reclassification adjustments 178 (291) Foreign currency translation adjustments, net of income taxes 55 167 --------- ---------- Comprehensive earnings $ 1,822 $ 1,287 ========= ==========
4. PENDING ACQUISITION On April 22, 1998, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with AccelGraphics, Inc. (AGI) whereby the Company will acquire 100% of AGI's issued and outstanding common stock for cash and shares of the Company's common stock for approximately $52 million (the "Merger"). The Merger will be accounted for by the Company using the purchase method of accounting in accordance with generally accepted accounting principles. The purchase price was determined through arms-length negotiations based upon the market value of AGI's common stock. The merger is expected to be completed in June 1998. Completion of the merger is subject to a number of conditions, including certain regulatory approvals and approval by a majority of AGI's shareholders. There can be no assurance that the AGI acquisition will be consummated nor can there be any assurance that the Company will be successful in integrating the two separate companies, retaining AGI employees, or that the Merger will not be viewed as disadvantageous to existing AGI customers and/or existing E&S distributors that may consider themselves as competitors of the combined entity and thus adversely affect the Company's future operating results. 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the condensed consolidated financial statements and notes included in Item 1 of Part I of this form. All data in the tables are in thousands except for percentages. Except for the historical information contained herein, this report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. The Company's actual results may differ materially from those indicated by such forward-looking statements. OVERVIEW Evans & Sutherland Computer Corporation (E&S(R) or the Company) develops and manufactures hardware and software for visual systems that produce vivid and highly realistic three-dimensional (3-D) graphics and synthetic environments. The Company's product offerings include a full range of high-performance visual systems for simulation, training, and virtual reality applications, as well as graphic accelerator products for personal computer workstations. E&S is organized into six business units. Each business unit develops and markets its products to a worldwide customer base. These business units can be grouped into two areas: core businesses and new businesses. The core businesses are the simulation-related units in which E&S has an established market presence with significant market share and which represent the majority of the Company's revenues and earnings. The new businesses are in high growth markets where E&S has superior technology which can be directed to new applications. Core businesses: Government Simulation Government Simulation provides visual systems for flight and ground training and related services to U.S. and international armed forces, NASA, and aerospace companies. E&S remains an industry leader for visual systems sales to various U.S. government agencies and more than 20 foreign governments for the primary purpose of training vehicle operators. E&S anticipates continued growth in this marketplace as simulation training increases in value as an alternative to other training methods, and as simulation training technology and cost-effectiveness improve. Future customer demands will include lower-cost PC-based systems, more open systems with interoperable databases, and custom display systems, all of which E&S believes it is well positioned to provide. Commercial Simulation Commercial Simulation is a leading independent supplier of visual systems for flight simulators for commercial airlines. The business unit's hardware platform, consisting of an ESIG(R) 3350GT image generator and ESCP 2000 raster/calligraphic projectors, provides high image quality, reliability, and ease-of use. E&S's Commercial Simulation systems have been approved by major aviation regulatory agencies. In the future, the Company believes it will enhance its industry position by using E&S Harmony(TM) image generators and advanced display products, and by expanding its product base to include other flight simulator products. New businesses: Board Products Board Products (formerly Display Systems) supplies high-performance, high-margin board-level products for simulation, avionics, and vehicle displays. Board Products is transitioning from a project-oriented model to being a product-based business, with desktop simulation solutions as its principal target. 8 The Board Product's Rhythm(TM) board, a member of the Company's Symphony(TM) line of products, combines the Company's REALimage(TM) graphics technology with an onboard processor to create a compact and cost-effective, low-end simulation solution. Board Products intends to develop full-capability board level image generators and advanced display products, and to participate more fully in the in-vehicle training marketplace. Desktop Graphics Desktop Graphics provides REALimage graphics accelerator technology for workstation manufacturers and NT-based personal computers. Since inaugural shipments in June 1997, REALimage graphics acceleration technology has been selected by 12 manufacturers of Windows NT-based computers. In March 1998, volume production of the third-generation REALimage chip design began, thereby keeping pace with introductions of new, more powerful processors from Intel. The Company plans two technology upgrades this year. Real Image Technology(TM) supports the full range of professional OpenGL graphics applications, including, among others, design engineering, simulation, digital content creation, visualization, animation, and entertainment. Digital Studio Digital Studio provides virtual studio products and services for digital content production in the television, film, video, corporate training, and multimedia industries at a lower cost than traditional proprietary technology. MindSet(TM) Virtual Studio System and FuseBox(TM) control software enable the use of virtual sets with live talent for video. The MindSet system is in use at broadcast, production, postproduction, and educational institutions worldwide. As the first Windows NT-based virtual set system, MindSet earned immediate distinction at the 1997 National Association of Broadcasters annual conference by being cited as one of the ten best "Prime Time" digital products on exhibit. It also received an "Editors' Choice" Award from AV Video Multimedia Magazine, and a "1997 Product Innovation Award" from Computer Graphics World Magazine. Digital Theater Digital Theater focuses on hardware, software, and content development for digital theater venues, and is a leading supplier of digital planetarium projection systems (Digistar(R) II). Digital Theater is dedicated to the emerging, large format digital theater marketplace. Efforts are focused on hardware, software, and content development. Digital Theater's highest performance system, StarRider(TM) Digital Theater, is designed to display full-color, computer-generated 3-D images, in either playback or real-time mode, onto a domed surface. StarRider was recently selected by two prestigious planetariums and are scheduled for completion in 1998 and 1999. 9 RESULTS OF OPERATIONS The following table summarizes changes in results of operations for the periods indicated and presents the percentage of increase (decrease) by listed items compared to the indicated prior period: Increase (decrease) between First Quarter 1998 and First Quarter 1997 ------------------------------ (Unaudited) Net sales $ 8,779 26.1% Cost of sales 6,782 36.6% ------------------ Gross profit 1,997 13.2% ------------------ Expenses: Marketing, general & administrative 797 10.2% Research & development 831 14.2% ------------------ Total expenses 1,628 11.9% ------------------ Operating earnings 369 25.7% Other income, net (31) (5.4%) ------------------ Earnings before income taxes 338 16.8% Income taxes 160 26.5% ------------------ Net earnings $ 178 12.6% ================== Sales - ----- Sales for the first quarter of 1998 increased 26.1% to $42.4 million compared to $33.6 million for the first quarter of 1997. The increased sales in 1998 for the first quarter over the corresponding period in 1997 were primarily due to the record backlog going into 1998. This increase reflects improvements in the Company's Commercial Simulation and Desktop Graphics business units. Commercial Simulation's revenues increased significantly in the first quarter of 1998 as compared to the first quarter of 1997 in addition to increased market share through significant orders. Domestic sales for the first quarter of 1998 increased 87% to $28.4 million as compared to $15.2 million for the first quarter of 1997. Foreign sales for the first quarter of 1998 decreased 24% to $14.0 million compared to $18.4 million for the first quarter of 1997. Cost of Sales - ------------- Cost of sales, as a percentage of sales, was 59.6% for the first quarter of 1998 compared to 55.0% for the first quarter 1997. The increase in cost of sales, as a percentage of sales, for the first quarter is primarily due to product mix, timing of shipments and completed contracts, and lower margin government simulation contracts in which the Company served as the prime contractor. These higher costs were partially offset by lower cost of sales as a percentage of sales on its Commercial Simulation and Desktop Graphics business units. Royalties and commissions generated by Desktop Graphics have relatively low associated costs. The Company's Board Products business unit also had higher cost of sales as a percentage of sales in the first quarter of 1998 as compared to the first quarter of 1997 reflecting the effects of certain design changes, among other factors. Expenses - -------- Total expenses for the first quarter of 1998 increased 11.9% to $15.3 million compared to $13.7 million for the first quarter of 1997, but decreased as a percentage of sales to 36.1% from 40.7% for the respective periods. 10 Marketing, General, and Administrative: Marketing, general, and administrative expense for the first quarter of 1998 increased 10.2% to $8.6 million compared to $7.8 million for the first quarter of 1997, but decreased as a percentage of sales to 20.4% from 23.3% for the respective periods. The increase in marketing, general, and administrative expense during the first quarter is primarily due to increased labor costs related to increased headcount, wages and incentive bonuses due to higher profitability, consulting and professional services, travel costs and administrative costs related to the growth in operations. Research and Development: Research and development expense for the first quarter of 1998 increased 14.2% to $6.7 million compared to $5.8 million for the first quarter of 1997, but decreased as a percentage of sales to 15.7% from 17.4% for the respective periods. The increase in research and development expense during the first quarter is primarily due to increased headcount and activity related to the development of the Company's Symphony line of products. Other Income, Net - ----------------- Other income for the first quarter of 1998 decreased 5.4% to $0.5 million compared to $0.6 million for the first quarter of 1997. The decrease in other income for the first quarter is primarily due to a decrease in interest income due to lower average cash and marketable securities balances. Income Taxes - ------------ The Company's combined federal, state and foreign effective income tax rate was 32.5% for the first quarter of 1998. The tax rate for the same period in 1997 was 30.0%. These rates are calculated based on an estimated annual effective tax rate applied to income before income taxes. LIQUIDITY & CAPITAL RESOURCES Working capital at March 27, 1998 was $126.0 million compared to $129.0 million at December 31, 1997. This includes cash, cash equivalents and marketable securities of $43.0 million and $57.1 million at March 27, 1998 and December 31, 1997, respectively. The Company's operations used $6.3 million during the first quarter of 1998, compared to $4.0 million of cash provided by operations during the first quarter of 1997. Cash was primarily provided from proceeds of sales of marketable securities and proceeds from employee stock purchase and option plans. Cash was principally used to repurchase and retire shares of the Company's common stock, the purchase of capital equipment, and repayments of borrowings under the Company's lines of credit. At March 27, 1998, the Company had unsecured credit facilities with foreign banks with total availability of approximately $11 million, for which there were no borrowings outstanding, and a $5 million unsecured line for letters of credit with a U.S. bank. Management believes that existing cash and marketable securities balances, borrowings available under its credit facilities and cash generated from operations will be sufficient to meet the Company's anticipated operating requirements for the next twelve months. The Company's cash and marketable securities are available for strategic investments, mergers and acquisitions, other potential cash needs as they may arise, and to fund the continuation of its stock repurchase plan - see "Subsequent Events". On February 18, 1998, the Company's Board of Directors authorized the repurchase of up to 600,000 shares of the Company's common stock, including the 327,000 shares still available from the repurchase authorization approved by the board on November 11, 1996. Subsequent to February 18, 1998, the Company has repurchased 189,000 shares of its common stock; thus, 411,000 shares currently remain available for repurchase. Stock may be acquired in the open market or through negotiated transactions. Under the program, repurchases may be made from time to time, depending on market conditions, share price, and other factors. These repurchases are to be used primarily to meet current and near-term requirements for the Company's stock-based benefit plans. The Company has not paid dividends on its common Stock in the past and has no present intention to do so in the future. 11 SUBSEQUENT EVENTS On April 22, 1998, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with AccelGraphics, Inc. (AGI) whereby the Company will acquire 100% of AGI's issued and outstanding common stock for cash and shares of the Company's common stock for approximately $52 million (the "Merger"). The Merger will be accounted for by the Company using the purchase method of accounting in accordance with generally accepted accounting principles. The purchase price was determined through arms-length negotiations based upon the market value of AGI's common stock. The Merger is expected to be completed in June 1998. Completion of the Merger is subject to a number of conditions, including certain regulatory approvals and approval by a majority of AGI's shareholders. AGI is a provider of high-performance, cost-effective, three-dimensional (3-D) graphics subsystem products for the professional Windows NT and Windows 95 markets. AGI sells its products through original equipment manufacturers and a worldwide network of value added resellers and distributors. AGI incorporates the Company's REALimage graphics technology into certain of its graphics subsystem products. Under the terms of the Merger Agreement, in aggregate, 48% of the total merger consideration will be paid in the form of cash and, in aggregate, 52% of the total merger consideration will be paid in the form of shares of the Company's common stock. In addition, all outstanding options to purchase AGI common stock under the stock option plans of AGI (other than options which have an exercise price in excess of $6.00 per share which shall be cancelled upon the closing of the Merger Agreement) shall be assumed by the Company and deemed to constitute an option to acquire the Company's common stock on the same terms and conditions as the holder of such option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the effective date. There can be no assurance that the AGI acquisition will be consummated nor can there be any assurance that the Company will be successful in integrating the two separate companies, retaining AGI employees, or that the Merger will not be viewed as disadvantageous to existing AGI customers and/or existing E&S distributors that may consider themselves as competitors of the combined entity and thus adversely affect the Company's future operating results. FORWARD-LOOKING STATEMENTS This quarterly report on Form 10-Q may be deemed to contain certain forward-looking statements. Any forward-looking statements involve risks and uncertainties, including but not limited to risk of product demand, market acceptance, economic conditions, competitive products and pricing, difficulties in product development, commercialization and technology, and other risks detailed in this filing. Although the Company believes it has the product offerings and resources for continuing success, future revenue and margin trends cannot be reliably predicted. Factors external to the Company can result in volatility of the Company's common stock price. Because of the foregoing factors, recent trends are not necessarily reliable indicators of future stock prices or financial performance. TRADEMARKS USED IN THIS FORM 10-Q Digistar, E&S, ESIG, FuseBox, Harmony, MindSet, REALImage Technology, Real Image, Rhythm, StarRider and Symphony are trademarks or registered trademarks of Evans & Sutherland Computer Corporation. All other product, service, or trade names or marks are the properties of their respective owners. 12 PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Regulation S-K Exhibit No. Description 2.1 Agreement and Plan of Merger, dated April 22, 1998, among the Company, E&S Merger Corp., and AccelGraphics, Inc., filed as Annex I to the Company's Registration Statement on Form S-4, SEC File No. 333-51041, and incorporated herein by this reference. 11 Earnings Per Share Calculation 27 Financial Data Schedule (filed as part of electronic filing only) 99.1 Voting Agreement, dated April 22, 1998, between the Company and certain stockholders of AccelGraphics, Inc., filed as Annex III to the Company's Registration Statement on Form S-4, SEC File No. 333-51041, and incorporated herein by this reference. (b) There were no reports on Form 8-K filed for the three-month period ended March 27, 1998. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EVANS & SUTHERLAND COMPUTER CORPORATION Registrant Date May 11, 1998 /S/ John T.Lemley ------------ -------------------------- John T. Lemley, Vice President and Chief Financial Officer (Principal Financial Officer) 13 EX-11 2 EARNINGS PER SHARE CALCULATION EXHIBIT 11 EVANS & SUTHERLAND COMPUTER CORPORATION EARNINGS PER SHARE CALCULATION Unaudited (In thousands except per share amounts)
Three Months Ended Three Months Ended March 27,1998 March 28,1997 -------------------------------- -------------------------------- Basic Diluted Basic Diluted ------------- -------------- -------------- ------------- Average number of common shares outstanding during the period Common shares outstanding during the entire period 9,067 9,067 9,059 9,059 Weighted average common shares issued during the period 12 12 8 8 ------------- -------------- -------------- ------------- Weighted average number of common shares outstanding 9,079 9,079 9,067 9,067 Weighted average number of dilutive common equivalent shares outstanding - 381 - 373 ------------- -------------- -------------- ------------- Weighted average common and dilutive common equivalent shares outstanding 9,079 9,460 9,067 9,440 ============= ============== ============== ============= Net earnings applicable to common stock $1,589 $1,589 $1,411 $1,411 ============= ============== ============== ============= Net earnings per common and dilutive common equivalent share outstanding $0.18 $0.17 $0.16 $0.15 ============= ============== ============== =============
EX-27 3 FINANCIAL DATA SCHEDULE
5 0000276283 EVANS & SUTHERLAND COMPUTER CORPORATION 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-27-1998 11,596 31,419 35,624 889 28,354 174,814 124,877 80,675 229,438 48,806 18,015 0 0 1,787 160,830 229,438 42,421 42,421 25,296 25,296 15,318 0 303 2,353 764 1,589 0 0 0 1,589 0.18 0.17
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