10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 29, 2019

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 001-14677

__________________________________________________

EVANS & SUTHERLAND COMPUTER CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Utah (State or Other Jurisdiction of Incorporation or Organization)	87-0278175 (I.R.S. Employer Identification No.)
770 Komas Drive, Salt Lake City, Utah (Address of Principal Executive Offices)	84108 (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 by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes  X  No __

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer [X]	Smaller reporting company [X]
Emerging growth company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes __ No X

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.20 par value	ESCC	Over-the-Counter Markets

The number of shares of the registrant’s Common Stock (par value $0.20 per share) outstanding on May 10, 2019 was 11,482,516.

FORM 10-Q

Evans & Sutherland Computer Corporation

Quarter Ended March 29, 2019

	PART I – FINANCIAL INFORMATION
		Page No.
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 29, 2019 and December 31, 2018 (Unaudited)	3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 29, 2019 and March 30, 2018 (Unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 29, 2019 and March 30, 2018 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 29, 2019 and March 30, 2018 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 4.	Controls and Procedures	18
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 6.	Exhibits	19
SIGNATURE		20

PART I – FINANCIAL INFORMATION

Item 1.FINANCIAL STATEMENTS 

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (In thousands, except share and per share data)

	March 29,		December 31,
	2019		2018
			(As Adjusted)
ASSETS
Current assets:
Cash and cash equivalents	$	6,244	$	8,365
Restricted cash		251		220
Accounts receivable, net		3,794		3,250
Current portion of lease receivable		266		262
Contract revenue in excess of billings		2,525		3,484
Inventories, net		3,350		3,072
Prepaid expenses and deposits		777		655
Total current assets		17,207		19,308
Long-term lease receivable, net of current portion		506		574
Operating lease right-of-use asset		49		187
Property and equipment, net		4,387		4,395
Goodwill		635		635
Other assets		2,159		2,249
Total assets	$	24,943	$	27,348
LIABILITIESANDSTOCKHOLDERS’EQUITY
Current liabilities:
Accounts payable	$	1,263	$	1,527
Accrued liabilities		1,303		1,059
Billings in excess of contract revenue		4,414		5,959
Current portion of operating lease liability		49		188
Current portion of retirement obligations		643		621
Current portion of pension settlement obligation		438		438
Current portion of long-term debt		240		237
Total current liabilities		8,350		10,029
Retirement obligations, net of current portion		3,533		3,601
Pension settlement obligation, net of current portion		4,042		4,042
Long-term debt, net of current portion		1,241		1,303
Total liabilities		17,166		18,975
Commitments and contingencies
Stockholders’ equity:
Preferred stock, no par value: 10,000,000 shares authorized; no shares outstanding		-		-
Common stock, $0.20 par value: 30,000,000 shares authorized; 11,746,866 shares issued		2,349		2,323
Additional paid-in-capital		53,988		53,967
Common stock in treasury, at cost, 264,350 shares		(3,532)		(3,532)
Accumulated deficit		(43,052)		(42,409)
Accumulated other comprehensive loss		(1,976)		(1,976)
Total stockholders’ equity		7,777		8,373
Total liabilities and stockholders’ equity	$	24,943	$	27,348

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) (In thousands, except per share data)

	Three Months Ended
	March 29,		March 30,
	2019		2018
			(As Adjusted)
Sales	$	7,165	$	7,581
Cost of sales		(4,961)		(4,972)
Gross profit		2,204		2,609
Operating expenses:
Selling, general and administrative		(1,817)		(1,773)
Research and development		(902)		(767)
Pension		(57)		(54)
Total operating expenses		(2,776)		(2,594)
Operating income (loss)		(572)		15
Other expense, net		(71)		(75)
Loss before income tax provision		(643)		(60)
Income tax provision		-		(11)
Net loss	$	(643)	$	(71)
Net loss per common share – basic and diluted	$	(0.06)	$	(0.01)
Weighted average common shares outstanding – basic
and diluted		11,406		11,353

The accompanying notes are an integral part of these condensed consolidated financial statements

4

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited) (In thousands)

						Accumulated
			Additional			Other
	Common Stock		Paid-in	Treasury	Accumulated	Comprehensive
	Shares	Amount	Capital	Stock	Deficit	Loss	Total
Balance, December 31, 2017	11,617	$ 2,323	$ 53,818	$ (3,532)	$ (47,208)	$ (2,176)	$ 3,225
Balance at January 1, 2018, as previously reported	11,617	2,323	53,818	(3,532)	(47,208)	(2,176)	3,225
Impact of change in accounting
policy topic 606	-	-	-	-	683	-	683
Impact of change in accounting
policy topic 842	-	-	-	-	808	-	808
Adjusted balance at January 1, 2018	11,617	2,323	53,818	(3,532)	(45,717)	(2,176)	4,716
Net loss	-	-	-	-	(71)	-	(71)
Stock-based compensation	-	-	39	-	-	-	39
Balance, March 30, 2018 (as adjusted)	11,617	$ 2,323	$ 53,857	$ (3,532)	$ (45,788)	$ (2,176)	$ 4,684

						Accumulated
			Additional			Other
	Common Stock		Paid-in	Treasury	Accumulated	Comprehensive
	Shares	Amount	Capital	Stock	Deficit	Loss	Total
Balance, December 31, 2018  (as adjusted)	11,617	$ 2,323	$ 53,967	$ (3,532)	$ (42,409)	$ (1,976)	$ 8,373
Net loss	-	-	-	-	(643)	-	(643)
Exercise of stock options	130	26	(5)	-	-	-	21
Stock-based compensation	-	-	26	-	-	-	26
Balance, March 29, 2019	11,747	$ 2,349	$ 53,988	$ (3,532)	$ (43,052)	$ (1,976)	$ 7,777

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (In thousands)

	Three Months Ended
	March 29,		March 30,
	2019		2018
			(As Adjusted)
Cash flows from operating activities:
Net loss	$	(643)	$	(71)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		66		67
Provision for excess and obsolete inventory		-		99
Noncash lease expense		138		130
Other		(16)		93
Changes in operating assets and liabilities:
Increase in accounts receivable		(502)		(1,190)
Decrease in lease receivable		64		60
Increase in inventories		(278)		(446)
Decrease (increase) in contract revenue in excess of billings		959		(752)
Increase in prepaid expenses and other assets		(32)		(95)
Decrease in accounts payable		(264)		(492)
Increase in accrued liabilities		244		347
Decrease in accrued pension and retirement liabilities		(46)		(61)
Increase (decrease) in billings in excess of contract revenue		(1,545)		2,054
Decrease in operating lease liability		(139)		(129)
Net cash used in operating activities		(1,994)		(386)
				-
Cash flows from investing activities:
Purchases of property and equipment		(58)		(14)
Proceeds from sale of property and equipment		-		3
Net cash used in investing activities		(58)		(11)
Cash flows from financing activities:
Proceeds for shares issued on exercise of options		21		-
Principal payments on long-term debt		(59)		(55)
Net cash used in financing activities		(38)		(55)
Net decrease in cash, cash equivalents, and restricted cash		(2,090)		(452)
Cash, cash equivalents, and restricted cash as of beginning of the period		8,585		5,588
Cash, cash equivalents, and restricted cash as of end of the period	$	6,495	$	5,136
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	22	$	25
Income taxes		9		25

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

All dollar amounts (except share and per share amounts) in thousands.

1.GENERAL 

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Evans & Sutherland Computer Corporation and subsidiaries (collectively, the “Company” or “E&S”) have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, and cash flows, in conformity with U.S. generally accepted accounting principles (“US GAAP”).  This report on Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2018.

The accompanying unaudited condensed consolidated balance sheets, statements of operations, and statements of cash flows reflect all normal recurring adjustments that 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 three months ended March 29, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.  The Company operates on a calendar year with the first three fiscal quarters ending on the last Friday of the thirteenth week in the quarter.  

Revenue Recognition

Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). In accordance with Topic 606, the Company recognizes revenue at a point of time or over the time of performance depending on the nature of the obligation.

Stock-Based Compensation

Compensation cost for all stock-based awards is measured at fair value on the date of grant and is recognized over the service period for awards expected to vest.  Determining the fair value of share-based awards at the grant date requires judgment, including estimating the value of share-based awards that are expected to be forfeited. Actual results and future estimates may differ from the Company’s current estimates.

Net Loss Per Common Share

Basic net loss per common share is computed based on the weighted-average number of common shares outstanding during the period.  Diluted net loss per common share is computed based on the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period. Stock options are considered to be common stock equivalents. When the Company incurs a loss, potentially dilutive common stock equivalents are excluded as their effect would be anti-dilutive, thereby decreasing the net loss per common share.

7

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Inventories, net

Inventories consisted of the following:

	March 29,		December 31,
	2019		2018
Raw materials	$	6,096	$	5,979
Work in process		181		116
Finished goods		419		323
Reserve for obsolete inventory		(3,346)		(3,346)
Inventories, net	$	3,350	$	3,072

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) ("Topic 842"). Topic 842 changes the accounting for leases. In particular, lessees will recognize lease assets and lease liabilities for operating leases. Effective January 1, 2019, the Company implemented Topic 842 as described in Note 3.

8

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

2.    REVENUE

Disaggregation of Revenue

In the following tables, revenue reported for the periods presented is disaggregated by primary geographical market, major product line, timing of revenue recognition and product application.

Three months ended March 29, 2019
Product Application	Planetarium Theaters	Other Visitor Attractions	Architectural Treatments	Total
Primary geographic area:
North America	$4,179	$215	$76	$4,470
Europe	1,373	316	-	1,689
Asia	485	38	-	523
Other	483	-	-	483
	$6,520	$569	$76	$7,165
Products:
Audio-Visual Systems	$4,396	$151	$-	$4,547
Domes	801	418	76	1,295
Show Content	771	-	-	771
Maintenance and Service	552	-	-	552
	$6,520	$569	$76	$7,165
Timing of revenue recognition:
Goods transferred at point in time	$816	$-	$-	$816
Goods and services transferred over time	5,704	569	76	6,349
	$6,520	$569	$76	$7,165

9

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Three months ended March 30, 2018
Product Application	Planetarium Theaters	Other Visitor Attractions	Architectural Treatments	Total
Primary geographic area:
North America	$3,133	$120	$360	$3,613
Europe	333	11	-	344
Asia	2,456	847	-	3,303
Other	321	-	-	321
	$6,243	$978	$360	$7,581
Products:
Audio-Visual Systems	$3,986	$11	$-	$3,997
Domes	1,375	967	360	2,702
Show Content	326	-	-	326
Maintenance and Service	556	-	-	556
	$6,243	$978	$360	$7,581
Timing of revenue recognition:
Goods transferred at point in time	$481	$-	$-	$481
Goods and services transferred over time	5,762	978	360	7,100
	$6,243	$978	$360	$7,581

Contract Balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers as of March 29, 2019:

	March 29, 2019	December 31, 2018
Receivables reported as accounts receivable, net	$3,794	$3,250
Contract revenue in excess of billings	2,525	3,484
Billings in excess of contract revenue	4,414	5,959

10

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Significant changes in the contract assets and the contract liabilities balances during the period are as follows:

	Contract Assets	Contract Liabilities
Revenue recognized that was included in the contract liability balance at the beginning of the period		$(3,265)
Increases due to amounts billed to customers, excluding amounts recognized as revenue during the period		$  1,720
Transferred to receivables from contract assets recognized at the beginning of the period	$ (1,343)
Increases as a result of revenue recognized, excluding amounts transferred to receivables during the period	$       384

Contract assets arise when revenue recognized on a contract exceeds the cumulative progress billings. Contracts generally provide for an enforceable right to payment for performance completed to date but do not necessarily have a present right to consideration payment for performance completed until the event that triggers the progress billing. The contract assets are transferred to the receivables when the rights to payment occur and amounts are billed. Contract liabilities arise when progress billings on a contract exceed the revenue recognized. Contract liabilities are relieved as the performance obligation is completed and revenue is recognized. Progress billings vary among contracts and can be triggered by chronological milestones, performance events or other various measurements of performance.

Backlog of Remaining Customer Performance Obligations

The following table includes estimated revenue expected to be recognized and recorded as sales in the future from the backlog of performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

	Remainder of 2019	2020	2021	2022	2023
Sales	$14,233	$535	$256	$54	$50

3.    OPERATING LEASE

The Company adopted Topic 842, Leases, effective January 1, 2019 and adjusted the 2018 comparative period presented by applying the new standard as of January 1, 2018. As a result, the 2018 periods presented for comparative purpose have been adjusted to reflect the application of Topic 842 with an adjustment to opening balance of stockholders’ equity at January 1, 2018 for cumulative effect of the initial application (see Note 4).

The Company leases its office, shop and warehouse space in Salt Lake City, Utah under a non-cancellable operating lease agreement with an amended term that ended on April 30, 2019 (the “Facility Lease”). On April 15, 2019, the Company signed an amendment to the Facility Lease, for newly defined space with a term beginning on May 1, 2019 (see Note 7).  

As a result of the adoption of ASC 842, the Company recognized an operating liability with a corresponding right-of-use (“ROU”) asset of the same amount based on the present value of the minimum rental payments of the Facility

11

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Lease as of January 1, 2018.   The discount rate used to compute the present value of the minimum rental payments of the lease is the Company’s estimated borrowing rate of 7.5%.  The operating lease expense is computed on straight-line basis which amounted to $142 reported as rent expense in each of the three-month periods presented.

Balance sheet information related to the lease is as follows:

	March 29,		December 31,
	2019		2018
Operating lease right-of-use asset	$	49	$	187
Operating lease liability, current portion		49		188

Maturities of the lease liability is as follows:

Future Minimum Lease Payments
2019	$	47

Other information related to the lease:

	March 29,		March 30,
	2019		2018
Operating cashflows
Cash paid related to operating lease obligation	$	143	$	137
Remaining lease term (in years)
Operating lease		0.08		1.08

4.    CHANGES IN ACCOUNTING PRINCIPAL

As described in Note 3, the Company adopted Topic 842 Leases, effective January 1, 2019 resulting in the retrospective adjustment of the comparative 2018 periods presented. Prior to the application of Topic 842, the rent expense was recorded in the amount of the lease payments, adjusted on straight-line basis over the lease term, less the amortization of a deferred gain from a 2014 sale leaseback transaction.  Under Topic 842, this gain would be recognized at the time of the transaction and not deferred. As a result, there was an adjustment to eliminate the unamortized balance of the deferred gain for cumulative effect of the initial application which increased the opening balance of stockholders’ equity in the amount of $808 at January 1, 2018. The presented condensed consolidated statement of operations and condensed consolidated statement of cash flows for the three-month period ended March 30, 2018 is adjusted to reflect an increase in rent expense in the amount of $110. The balance sheet presented as of December 31, 2018 is adjusted to reflect the ROU asset and operating lease liability described in Note 3 along with an increase stockholders’ equity of $369.

12

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

5.STOCK OPTION PLAN  

As of March 29, 2019, options to purchase 876,981 shares of common stock under the Company’s stock option plan were authorized and reserved for future grant.  

A summary of activity in the stock option plan for the three months ended March 29, 2019 follows (shares in thousands):

		Weighted-
		Average
	Number	Exercise
	of Shares	Price
Outstanding as of beginning of the period	1,597	$	0.65
Granted	165		0.80
Exercised	(130)		0.17
Forfeited or expired	(40)		0.66
Outstanding as of end of the period	1,592		0.71
Exercisable as of end of the period	1,164	$	0.61

As of March 29, 2019, options exercisable and options outstanding had a weighted average remaining contractual term of 5.72 and 6.54 years, respectively, and had an aggregate intrinsic value of $317.

The Black-Scholes option-pricing model is used to estimate the fair value of options under the Company’s stock option plan.

The weighted average values of employee stock options granted under the stock option plan, as well as the weighted average assumptions used in calculating these values during the first three months of 2019, were based on estimates as of the date of grant as follows:

Risk-free interest rate	2.64%
Dividend yield	0.00%
Volatility	81.16%
Expected life	3.5 years

Expected option life and volatility are based on historical data. The risk-free interest rate is calculated based on the average US Treasury bill rate that corresponds with the option life.  Historically, the Company has not declared dividends and there are no foreseeable plans to do so.

The options exercised in the three-month period ended March 29, 2019 had an intrinsic value of $69.

As of March 29, 2019, there was approximately $122 of total unrecognized share-based compensation cost related to grants under the stock option plan that will be recognized over a weighted-average period of 2.4 years.

Share-based compensation expense included in selling, general and administrative expense in the statements of operations for the three-month periods ended March 29, 2019 and March 30, 2018 was $26 and $39, respectively.

13

EVANS & SUTHERLAND COMPUTER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

6.EMPLOYEE RETIREMENT BENEFIT PLANS  

Pension and Retirement Obligations

In 2015, the Company terminated a defined pension plan and settled the resulting liabilities in exchange for a fixed obligation secured by the Company’s assets (the “Pension Settlement Obligation”). The remaining payments due under the Pension Settlement Obligation consist of eight installments of $750 to the Pension Benefit Guaranty Corporation due annually on October 31. The Pension Settlement Obligation is recorded net of imputed interest expense at 7%, as a liability on the balance sheet.

The Company’s only remaining pension obligation is the Supplemental Executive Retirement Plan (“SERP”).

Employer Contributions

The Company is not currently required to fund the SERP.  All benefit payments are made by the Company directly to those who receive benefits from the SERP.  As such, these payments are treated as both contributions and benefits paid for reporting purposes. The Company expects to contribute and pay SERP benefits of approximately $438 in the next 12 months.  

Components of Net Periodic Benefit Expense

	Supplemental Executive
	Retirement Plan
	March 29,		March 30,
For the three months ended:	2019		2018
Interest cost	$	37	$	34
Amortization of actuarial loss		20		20
Net periodic benefit expense	$	57	$	54

7.SUBSEQUENT EVENTS 

On April 15, 2019, the Company signed the second amendment to the Facility Lease (“Lease Amendment”).  The Lease Amendment effectively terminated, as of April 30, 2019, the current term of the Facility Lease, which was previously set to expire October 2019.  Under the Lease Amendment, effective May 1, 2019, the Company will continue to lease 60% of the space, while the other 40% will be leased from the Landlord by a third-party tenant.  The Company will continue to pay 100% of the maintenance and utility costs for the buildings and grounds, of which approximately 40% will be reimbursed by the third-party tenant in accordance with terms set by the Lease Amendment. The lease has a seven-year term with two five-year renewal options.  The monthly base rent will be $35 during the first year with a 3% escalation per year.  

14

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 related notes of Evans & Sutherland Computer Corporation and subsidiaries (collectively, the “Company,”  “E&S,” “we,” “us” and “our”) included in Item 1 of Part I of this quarterly report on Form 10-Q.  In addition to the historical information contained herein, this quarterly report on Form 10-Q includes certain "forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify these forward-looking statements by the fact they use words such as “should,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. These statements are likely to relate to, among other things, the Company’s goals, plans and projections regarding its financial position, results of operations, cash flows, market position, product development, sales efforts, expenses, performance or results of current and anticipated products and the outcome of contingencies such as legal proceedings and financial results, which are based on current expectations that involve inherent risks and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years.

Although the Company believes it has been prudent in its plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. The Company undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise.

All dollar amounts are in thousands.

EXECUTIVE SUMMARY

As described in the notes to the condensed consolidated financial statements, the Company adopted Topic 842, Leases, with a date of the initial application of January 1, 2018. The Company applied Topic 842 by retrospectively adjusting the 2018 financial statements presented for comparison in this Form 10-Q. The retrospective adjustment increased the rent expense by $110 per quarter. The balance sheet effect of this increase in expense was offset by an adjustment for the cumulative effect of the application that resulted in a net increase to stockholders’ equity of $369 as of December 31, 2018.

The results for the first quarter of 2019 produced a net loss of $643 on sales of $7,165 compared to a net loss of $71 on sales of $7,581 for the comparable period of 2018, as adjusted for the application of Topic 842 described above. Sales for 2019 were lower due to the acceleration of customer deliveries in 2018 and a low volume of new customer orders. In addition to the lower sales, lower profit margins and higher operating expenses contributed to the 2019 net loss. The lower profit margins were attributable to the types of customer projects and higher fixed overhead as a percentage of sales. Operating expenses increased mainly due to an increase in Research and Development activities aimed at new business development.

The low volume of new customer orders decreased the sales backlog to $15,128 as of March 29, 2019 compared to $17,366 as of December 31, 2018. New orders to replenish the sales backlog will be critical to produce sales at sufficient levels for profitable results. We remain encouraged that the Company’s sales prospects will produce sufficient orders to sustain sales at profitable levels over the long term; however, we anticipate that the low backlog as of March 29, 2019 could continue to challenge profitability in 2019. Notwithstanding the loss in the first quarter of 2019, profitable results over the past few years have strengthened the Company’s financial position. This presents an opportunity in periods of low sales to redirect staff and resources, which would otherwise be working on customer projects, toward research and development activities to expand our products for future sales growth.

15

The Company continually evaluates its business for opportunities to reduce operating costs. These efforts led the Company to amend the lease for its facility in Salt Lake City effective May 1, 2019. Prior to the amendment the Company occupied 100% of two buildings totaling approximately 68,000 square feet. Upon review of its current requirements, the Company determined that its operations could be served efficiently with approximately 60% of its currently leased space. Under the Lease Amendment, effective May 1, 2019, the Company will lease approximately 60% of the current lease space, while the other 40% will be leased from the Landlord by a third-party tenant. The initial annual rent payments will be reduced $148 annually.  Also, the Company estimated that’s its utility and maintenance costs will be reduced by about $200 for a total estimated annual cost reduction of approximately $348.

CRITICAL ACCOUNTING POLICIES  

Certain accounting policies are considered by management to be critical to an understanding of our condensed consolidated financial statements.  Their application requires significant management judgment, with financial reporting results relying on estimates about the effect of matters that are inherently uncertain.  A summary of critical accounting policies can be found in our Form 10-K for the year ended December 31, 2018.  For all of these policies, management cautions that future results rarely develop exactly as forecasted, and the best estimates routinely require modification.  

RESULTS OF OPERATIONS

Sales and Backlog

The following table summarizes our sales:

	Three Months Ended
	March 29,		March 30,
	2019		2018
Sales	$	7,165	$	7,581

The lower sales in 2019 were attributable to the acceleration of customer deliveries in 2018 and a low volume of new customer orders.

Revenue backlog decreased to $15,128 as of March 29, 2019, compared to $17,366 as of December 31, 2018. The decrease in the revenue backlog was mainly attributable to the high volume of sales from work on prior customer orders combined with a low volume of new orders booked in the first quarter of 2019.

Gross Profit

The following table summarizes our gross profit and the gross profit as a percentage of total sales:

	Three Months Ended
	March 29,		March 30,
	2019		2018
Gross profit	$	2,204	$	2,609
Gross profit percentage		31 %		34 %

The mix of products delivered and the types of customer contracts that contributed to the revenue in the periods presented, causes variability in the gross profit percentage. Also, the low 2019 sales resulted in higher fixed overhead cost of as a percentage of sales.  

16

Operating Expenses

The following table summarizes our operating expenses:

	Three Months Ended
	March 29,		March 30,
	2019		2018
Selling, general and administrative	$	1,817	$	1,773
Research and development		902		767
Pension		57		54
Total operating expense	$	2,776	$	2,594

Selling, general and administrative expenses were slightly higher in 2019 compared to 2018, mainly due to inflationary cost increases.

Research and development expenses were higher in 2019 due to the deployment of more engineering resources to R&D activities made possible by lower customer delivery activities. Research and development expenses generally vary with use of engineering resources for product improvement projects and customer delivery activities.

Pension expense increased slightly in 2019 compared to 2018 due to an increase in the interest cost on the SERP.

Other Expense, net

The following table summarizes our other expense:

	Three Months Ended
	March 29,		March 30,
	2019		2018
Other expense, net	$	(71)	$	(75)

Other expense decreased in 2019 compared to 2018 mainly due to declining interest expense on the Pension Settlement Obligation and mortgage notes.   

LIQUIDITY AND CAPITAL RESOURCES

Outlook

As discussed above in the executive summary, we believe existing liquidity resources and funds generated from forecasted revenue will be sufficient to meet our current and long-term obligations. We continue to operate in a rapidly evolving and often unpredictable business environment that may change the timing or amount of expected future cash receipts and expenditures.

Cash Flows

In the first three months of 2019, $1,994 of cash used in operating activities was attributable to $455 of cash used by the net loss for the period, after the effect of non-cash items of $188, and cash used by changes to working capital of $1,539. The significant uses of cash from changes to working capital were an increase in accounts receivable and a decrease in billings in excess of contract revenue.  This was partially offset by a decrease in contract revenue in excess of billings.  These changes are attributable to the timing of billings, customer payments and new customer orders.   

17

In the first three months of 2018, $386 of cash used in operating activities was attributable to $318 of cash provided by the net loss for the period, after the effect of non-cash items of $389 which was offset by cash used by changes to working capital of $704. The significant uses of cash from changes to working capital were increases in accounts receivable, contract revenue in excess of billings and inventory with a decrease in accounts payable. This was mostly offset by an increase in billings in excess of contract revenue resulting from advance billings to customers.  These changes are attributable to the timing of billings, customer payments and new customer orders.

Cash used in investing activities was $58 for the three months ended March 29, 2019 compared to $11 for the same period of 2018.  Investing activities for both periods presented consisted of property and equipment purchases. In 2018 investing activities included proceeds from the sale of equipment no longer being used.

For the three months ended March 29, 2019, financing activities used $38 of cash compared to $55 in 2018 for principal payments on mortgage notes.  Proceeds of $21 for the sale of common stock pursuant to the exercise of employee stock options partially offset the principal payments on the mortgage notes in 2019.

Line of Credit

The Company is a party to a line-of-credit agreement with a commercial bank which permits borrowings of up to $1,100 to fund the working capital requirements of Spitz. Under the line of credit agreement, interest is charged on amounts borrowed at the lender’s prime rate less 0.25%.  Any borrowings under the Credit Agreement are secured by Spitz real and personal property and all of the outstanding shares of Spitz common stock. The line-of-credit agreement and mortgage notes (with the same commercial bank) contain cross default provisions whereby a default on either agreement will result in a default on both agreements. There were no borrowings outstanding under the line-of-credit agreement as of March 29, 2019.

Letters of Credit

Under the terms of financing arrangements for letters of credit, the Company is required to maintain a balance in a specific cash account equal to or greater than the outstanding value of all letters of credit issued, plus other amounts necessary to adequately secure obligations with the financial institutions who issue the letters of credit.  As of March 29, 2019, there were outstanding letters of credit and bank guarantees of $251, which are scheduled to expire during the year ending December 31, 2019.  

Mortgage Notes

As of March 29, 2019, Spitz had obligations totaling $1,481 under its two mortgage notes payable.

Item 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective at the reasonable assurance level such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company are detected.

18

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting identified in connection with the evaluation of disclosure controls and procedures discussed above that occurred during the three months ended March 29, 2019, or subsequent to that date, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies which may be identified during this process.

PART II - OTHER INFORMATION

Item 1.LEGAL PROCEEDINGS  

In the normal course of business, we become involved in various legal proceedings.  Although the final outcome of such proceedings cannot be predicted with certainty, we believe the ultimate disposition of any such proceedings will not have a material adverse effect on our consolidated financial position, liquidity, or results of operations.

Item 6.EXHIBITS 

31.1Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended, filed herewith. 

31.2Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended, filed herewith. 

32.1Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. 

101The following materials from this Quarterly Report on Form 10-Q for the period ended March 29, 2019, formatted in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Stockholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. 

19

SIGNATURE

Pursuant to the requirements of the Securities 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
Date:	May 10, 2019	By:    /s/ Paul Dailey
		Paul Dailey, Chief Financial Officer
		and Corporate Secretary
		(Authorized Officer)
		(Principal Financial and Accounting Officer)

20

EX-31.1

Exhibit 31.1

Rule 13a-14 Certification

CERTIFICATIONS*

I, Jonathan Shaw, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Evans & Sutherland Computer Corporation;  

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;  

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and  

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):  

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and  

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.  

Date: May 10, 2019

/s/ Jonathan Shaw
Jonathan Shaw
Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Rule 13a-14 Certification

CERTIFICATIONS*

I, Paul L. Dailey, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Evans & Sutherland Computer Corporation;  

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;  

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and  

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):  

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and  

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.  

Date: May 10, 2019

/s/ Paul L. Dailey
Paul L. Dailey
Chief Financial Officer
(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. 1350,

as Adopted Pursuant Section 906 of the

Sarbanes-Oxley Act of 2002

I, Jonathan Shaw, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Form 10-Q of Evans & Sutherland Computer Corporation for the quarter ended March 29, 2019, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Evans & Sutherland Computer Corporation.

Date: May 10, 2019By:     /s/ Jonathan Shaw   

Jonathan Shaw 

             Chief Executive Officer 

I, Paul L. Dailey, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Form 10-Q of Evans & Sutherland Computer Corporation for the quarter ended March 29, 2019, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Evans & Sutherland Computer Corporation.

Date: May 10, 2019By:     /s/ Paul L. Dailey   

Paul L. Dailey 

             Chief Financial Officer 

The foregoing certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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Document and Entity Information - shares	3 Months Ended
	Mar. 29, 2019	May 10, 2019
Text Block [Abstract]
Registrant Name	EVANS & SUTHERLAND COMPUTER CORPORATION
Registrant CIK	0000276283
SEC Form	10-Q
Period End date	Mar. 29, 2019
Fiscal Year End	--12-31
Trading Symbol	escc
Tax Identification Number (TIN)	870278175
Number of common stock shares outstanding		11,482,516
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Entity Small Business	true
Emerging Growth Company	false
Ex Transition Period	false
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Contained File Information, File Number	001-14677
Entity Address, Address Line One	770 Komas Drive
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	Utah
Entity Address, Postal Zip Code	84108
City Area Code	801
Local Phone Number	588-1000

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Mar. 29, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 6,244	$ 8,365
Restricted cash	251	220
Accounts receivable, net	3,794	3,250
Current portion of lease receivable	266	262
Contract revenue in excess of billings	2,525	3,484
Inventories, net	3,350	3,072
Prepaid expenses and deposits	777	655
Total current assets	17,207	19,308
Long-term lease receivable, net of current portion	506	574
Operating lease right-of-use asset	49	187
Property and equipment, net	4,387	4,395
Goodwill	635	635
Other assets	2,159	2,249
Total assets	24,943	27,348
Current liabilities:
Accounts payable	1,263	1,527
Accrued liabilities	1,303	1,059
Billings in excess of contract revenue	4,414	5,959
Current portion of operating lease liability	49	188
Current portion of retirement obligations	643	621
Current portion of pension settlement obligation	438	438
Current portion of long-term debt	240	237
Total current liabilities	8,350	10,029
Retirement obligations, net of current portion	3,533	3,601
Pension settlement obligation, net of current portion	4,042	4,042
Long-term debt, net of current portion	1,241	1,303
Total liabilities	17,166	18,975
Stockholders' equity:
Preferred stock, no par value: 10,000,000 shares authorized; no shares outstanding	0	0
Common stock, $0.20 par value: 30,000,000 shares authorized; 11,746,866 shares issued	2,349	2,323
Additional paid-in-capital	53,988	53,967
Common stock in treasury, at cost, 264,350 shares	(3,532)	(3,532)
Accumulated deficit	(43,052)	(42,409)
Accumulated other comprehensive loss	(1,976)	(1,976)
Total stockholders' equity	7,777	8,373
Total liabilities and stockholders' equity	$ 24,943	$ 27,348

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Mar. 29, 2019	Dec. 31, 2018
Text Block [Abstract]
Preferred Stock, No Par Value	$ 0	$ 0
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.20	$ 0.20
Common Stock, Shares Authorized	30,000,000	30,000,000
Common Stock, Shares, Issued	11,746,866	11,746,866
Treasury Stock, Shares	264,350	264,350

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Text Block [Abstract]
Sales	$ 7,165	$ 7,581
Cost of sales	(4,961)	(4,972)
Gross profit	2,204	2,609
Operating expenses:
Selling, general and administrative	(1,817)	(1,773)
Research and development	(902)	(767)
Pension	(57)	(54)
Total operating expenses	(2,776)	(2,594)
Operating income (loss)	(572)	15
Other expense, net	(71)	(75)
Loss before income tax provision	(643)	(60)
Income tax provision	0	(11)
Net loss	$ (643)	$ (71)
Net loss per common share - basic and diluted	$ (0.06)	$ (0.01)
Weighted average common shares outstanding - basic and diluted	11,406	11,353

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2017	$ 2,323	$ 53,818	$ (3,532)	$ (47,208)	$ (2,176)	$ 3,225
Shares, Outstanding, Beginning Balance at Dec. 31, 2017	11,617
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance, Previously Reported	$ 2,323	53,818	(3,532)	(47,208)	(2,176)	3,225
Shares, Outstanding, Beginning Balance, Previously Reported	11,617
Impact of change in accounting policy topic 606				683		683
Impact of change in accounting policy topic 842				808		808
Stockholders' Equity Adjusted balance	$ 2,323	53,818	(3,532)	(45,717)	(2,176)	4,716
Shares Outstanding, Adjusted balance	11,617
Net loss				(71)		(71)
Stock-based compensation		39				39
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 30, 2018	$ 2,323	53,857	(3,532)	(45,788)	(2,176)	4,684
Shares, Outstanding, Ending Balance at Mar. 30, 2018	11,617
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2018	$ 2,323	53,967	(3,532)	(42,409)	(1,976)	8,373
Shares, Outstanding, Beginning Balance at Dec. 31, 2018	11,617
Net loss				(643)		(643)
Exercise of stock options	$ 26	(5)				$ 21
Exercise of stock options, shares	130					(130)
Stock-based compensation		26				$ 26
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 29, 2019	$ 2,349	$ 53,988	$ (3,532)	$ (43,052)	$ (1,976)	$ 7,777
Shares, Outstanding, Ending Balance at Mar. 29, 2019	11,747

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Cash flows from operating activities:
Net loss	$ (643)	$ (71)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	66	67
Provision for excess and obsolete inventory	0	99
Noncash lease expense	138	130
Other	(16)	93
Changes in operating assets and liabilities:
Increase in accounts receivable	(502)	(1,190)
Decrease in lease receivable	64	60
Increase in inventories	(278)	(446)
Decrease (increase) in contract revenue in excess of billings	959	(752)
Increase in prepaid expenses and other assets	(32)	(95)
Decrease in accounts payable	(264)	(492)
Increase in accrued liabilities	244	347
Decrease in accrued pension and retirement liabilities	(46)	(61)
Increase (decrease) in billings in excess of contract revenue	(1,545)	2,054
Decrease in operating lease liability	(139)	(129)
Net cash used in operating activities	(1,994)	(386)
Cash flows from investing activities:
Purchases of property and equipment	(58)	(14)
Proceeds from sale of property and equipment	0	3
Net cash used in investing activities	(58)	(11)
Cash flows from financing activities:
Proceeds for shares issued on exercise of options	21	0
Principal payments on long-term debt	(59)	(55)
Net cash used in financing activities	(38)	(55)
Net decrease in cash, cash equivalents, and restricted cash	(2,090)	(452)
Cash, cash equivalents, and restricted cash as of beginning of the period	8,585	5,588
Cash, cash equivalents, and restricted cash as of end of the period	6,495	5,136
Supplemental disclosures of cash flow information
Interest	22	25
Income taxes	$ 9	$ 25

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1. General

3 Months Ended

Mar. 29, 2019

Disclosure Text Block [Abstract]

1. General

1.GENERAL 

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Evans & Sutherland Computer Corporation and subsidiaries (collectively, the “Company” or “E&S”) have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, and cash flows, in conformity with U.S. generally accepted accounting principles (“US GAAP”).  This report on Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2018.

The accompanying unaudited condensed consolidated balance sheets, statements of operations, and statements of cash flows reflect all normal recurring adjustments that 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 three months ended March 29, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.  The Company operates on a calendar year with the first three fiscal quarters ending on the last Friday of the thirteenth week in the quarter.  

Revenue Recognition

Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). In accordance with Topic 606, the Company recognizes revenue at a point of time or over the time of performance depending on the nature of the obligation.

Stock-Based Compensation

Compensation cost for all stock-based awards is measured at fair value on the date of grant and is recognized over the service period for awards expected to vest.  Determining the fair value of share-based awards at the grant date requires judgment, including estimating the value of share-based awards that are expected to be forfeited. Actual results and future estimates may differ from the Company’s current estimates.

Net Loss Per Common Share

Basic net loss per common share is computed based on the weighted-average number of common shares outstanding during the period.  Diluted net loss per common share is computed based on the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period. Stock options are considered to be common stock equivalents. When the Company incurs a loss, potentially dilutive common stock equivalents are excluded as their effect would be anti-dilutive, thereby decreasing the net loss per common share.

Inventories, net

Inventories consisted of the following:

	March 29,		December 31,
	2019		2018
Raw materials	$	6,096	$	5,979
Work in process		181		116
Finished goods		419		323
Reserve for obsolete inventory		(3,346)		(3,346)
Inventories, net	$	3,350	$	3,072

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) ("Topic 842"). Topic 842 changes the accounting for leases. In particular, lessees will recognize lease assets and lease liabilities for operating leases. Effective January 1, 2019, the Company implemented Topic 842 as described in Note 3.

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2. Revenue

3 Months Ended

Mar. 29, 2019

Disclosure Text Block [Abstract]

2. Revenue

2.    REVENUE

Disaggregation of Revenue

In the following tables, revenue reported for the periods presented is disaggregated by primary geographical market, major product line, timing of revenue recognition and product application.

Three months ended March 29, 2019
Product Application	Planetarium Theaters	Other Visitor Attractions	Architectural Treatments	Total
Primary geographic area:
North America	$4,179	$215	$76	$4,470
Europe	1,373	316	-	1,689
Asia	485	38	-	523
Other	483	-	-	483
	$6,520	$569	$76	$7,165
Products:
Audio-Visual Systems	$4,396	$151	$-	$4,547
Domes	801	418	76	1,295
Show Content	771	-	-	771
Maintenance and Service	552	-	-	552
	$6,520	$569	$76	$7,165
Timing of revenue recognition:
Goods transferred at point in time	$816	$-	$-	$816
Goods and services transferred over time	5,704	569	76	6,349
	$6,520	$569	$76	$7,165

Three months ended March 30, 2018
Product Application	Planetarium Theaters	Other Visitor Attractions	Architectural Treatments	Total
Primary geographic area:
North America	$3,133	$120	$360	$3,613
Europe	333	11	-	344
Asia	2,456	847	-	3,303
Other	321	-	-	321
	$6,243	$978	$360	$7,581
Products:
Audio-Visual Systems	$3,986	$11	$-	$3,997
Domes	1,375	967	360	2,702
Show Content	326	-	-	326
Maintenance and Service	556	-	-	556
	$6,243	$978	$360	$7,581
Timing of revenue recognition:
Goods transferred at point in time	$481	$-	$-	$481
Goods and services transferred over time	5,762	978	360	7,100
	$6,243	$978	$360	$7,581

Contract Balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers as of March 29, 2019:

	March 29, 2019	December 31, 2018
Receivables reported as accounts receivable, net	$3,794	$3,250
Contract revenue in excess of billings	2,525	3,484
Billings in excess of contract revenue	4,414	5,959

Significant changes in the contract assets and the contract liabilities balances during the period are as follows:

	Contract Assets	Contract Liabilities
Revenue recognized that was included in the contract liability balance at the beginning of the period		$(3,265)
Increases due to amounts billed to customers, excluding amounts recognized as revenue during the period		$  1,720
Transferred to receivables from contract assets recognized at the beginning of the period	$ (1,343)
Increases as a result of revenue recognized, excluding amounts transferred to receivables during the period	$       384

Contract assets arise when revenue recognized on a contract exceeds the cumulative progress billings. Contracts generally provide for an enforceable right to payment for performance completed to date but do not necessarily have a present right to consideration payment for performance completed until the event that triggers the progress billing. The contract assets are transferred to the receivables when the rights to payment occur and amounts are billed. Contract liabilities arise when progress billings on a contract exceed the revenue recognized. Contract liabilities are relieved as the performance obligation is completed and revenue is recognized. Progress billings vary among contracts and can be triggered by chronological milestones, performance events or other various measurements of performance.

Backlog of Remaining Customer Performance Obligations

The following table includes estimated revenue expected to be recognized and recorded as sales in the future from the backlog of performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

	Remainder of 2019	2020	2021	2022	2023
Sales	$14,233	$535	$256	$54	$50

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3. Operating Lease

3 Months Ended

Mar. 29, 2019

Notes to Financial Statements

3. Operating Lease

3.    OPERATING LEASE

The Company adopted Topic 842, Leases, effective January 1, 2019 and adjusted the 2018 comparative period presented by applying the new standard as of January 1, 2018. As a result, the 2018 periods presented for comparative purpose have been adjusted to reflect the application of Topic 842 with an adjustment to opening balance of stockholders’ equity at January 1, 2018 for cumulative effect of the initial application (see Note 4).

The Company leases its office, shop and warehouse space in Salt Lake City, Utah under a non-cancellable operating lease agreement with an amended term that ended on April 30, 2019 (the “Facility Lease”). On April 15, 2019, the Company signed an amendment to the Facility Lease, for newly defined space with a term beginning on May 1, 2019 (see Note 7).  

As a result of the adoption of ASC 842, the Company recognized an operating liability with a corresponding right-of-use (“ROU”) asset of the same amount based on the present value of the minimum rental payments of the Facility Lease as of January 1, 2018.   The discount rate used to compute the present value of the minimum rental payments of the lease is the Company’s estimated borrowing rate of 7.5%.  The operating lease expense is computed on straight-line basis which amounted to $142 reported as rent expense in each of the three-month periods presented.

Balance sheet information related to the lease is as follows:

	March 29,		December 31,
	2019		2018
Operating lease right-of-use asset	$	49	$	187
Operating lease liability, current portion		49		188

Maturities of the lease liability is as follows:

Future Minimum Lease Payments
2019	$	47

Other information related to the lease:

	March 29,		March 30,
	2019		2018
Operating cashflows
Cash paid related to operating lease obligation	$	143	$	137
Remaining lease term (in years)
Operating lease		0.08		1.08

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4. Changes in Accounting Principal

3 Months Ended

Mar. 29, 2019

Notes to Financial Statements

4. Changes in Accounting Principal

4.    CHANGES IN ACCOUNTING PRINCIPAL

As described in Note 3, the Company adopted Topic 842 Leases, effective January 1, 2019 resulting in the retrospective adjustment of the comparative 2018 periods presented. Prior to the application of Topic 842, the rent expense was recorded in the amount of the lease payments, adjusted on straight-line basis over the lease term, less the amortization of a deferred gain from a 2014 sale leaseback transaction.  Under Topic 842, this gain would be recognized at the time of the transaction and not deferred. As a result, there was an adjustment to eliminate the unamortized balance of the deferred gain for cumulative effect of the initial application which increased the opening balance of stockholders’ equity in the amount of $808 at January 1, 2018. The presented condensed consolidated statement of operations and condensed consolidated statement of cash flows for the three-month period ended March 30, 2018 is adjusted to reflect an increase in rent expense in the amount of $110. The balance sheet presented as of December 31, 2018 is adjusted to reflect the ROU asset and operating lease liability described in Note 3 along with an increase stockholders’ equity of $369.

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5. Stock Option Plan

3 Months Ended

Mar. 29, 2019

Disclosure Text Block [Abstract]

5. Stock Option Plan

5.STOCK OPTION PLAN  

As of March 29, 2019, options to purchase 876,981 shares of common stock under the Company’s stock option plan were authorized and reserved for future grant.  

A summary of activity in the stock option plan for the three months ended March 29, 2019 follows (shares in thousands):

		Weighted-
		Average
	Number	Exercise
	of Shares	Price
Outstanding as of beginning of the period	1,597	$	0.65
Granted	165		0.80
Exercised	(130)		0.17
Forfeited or expired	(40)		0.66
Outstanding as of end of the period	1,592		0.71
Exercisable as of end of the period	1,164	$	0.61

As of March 29, 2019, options exercisable and options outstanding had a weighted average remaining contractual term of 5.72 and 6.54 years, respectively, and had an aggregate intrinsic value of $317.

The Black-Scholes option-pricing model is used to estimate the fair value of options under the Company’s stock option plan. The weighted average values of employee stock options granted under the stock option plan, as well as the weighted average assumptions used in calculating these values during the first three months of 2019, were based on estimates as of the date of grant as follows:

Risk-free interest rate	2.64%
Dividend yield	0.00%
Volatility	81.16%
Expected life	3.5 years

Expected option life and volatility are based on historical data. The risk-free interest rate is calculated based on the average US Treasury bill rate that corresponds with the option life.  Historically, the Company has not declared dividends and there are no foreseeable plans to do so.

The options exercised in the three-month period ended March 29, 2019 had an intrinsic value of $69.

As of March 29, 2019, there was approximately $122 of total unrecognized share-based compensation cost related to grants under the stock option plan that will be recognized over a weighted-average period of 2.4 years.

Share-based compensation expense included in selling, general and administrative expense in the statements of operations for the three-month periods ended March 29, 2019 and March 30, 2018 was $26 and $39, respectively.

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6. Employee Retirement Benefit Plans

3 Months Ended

Mar. 29, 2019

Disclosure Text Block [Abstract]

6. Employee Retirement Benefit Plans

6.EMPLOYEE RETIREMENT BENEFIT PLANS  

Pension and Retirement Obligations

In 2015, the Company terminated a defined pension plan and settled the resulting liabilities in exchange for a fixed obligation secured by the Company’s assets (the “Pension Settlement Obligation”). The remaining payments due under the Pension Settlement Obligation consist of eight installments of $750 to the Pension Benefit Guaranty Corporation due annually on October 31. The Pension Settlement Obligation is recorded net of imputed interest expense at 7%, as a liability on the balance sheet.

The Company’s only remaining pension obligation is the Supplemental Executive Retirement Plan (“SERP”).

Employer Contributions

The Company is not currently required to fund the SERP.  All benefit payments are made by the Company directly to those who receive benefits from the SERP.  As such, these payments are treated as both contributions and benefits paid for reporting purposes. The Company expects to contribute and pay SERP benefits of approximately $438 in the next 12 months.  

Components of Net Periodic Benefit Expense

	Supplemental Executive
	Retirement Plan
	March 29,		March 30,
For the three months ended:	2019		2018
Interest cost	$	37	$	34
Amortization of actuarial loss		20		20
Net periodic benefit expense	$	57	$	54

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7. Subsequent Events

3 Months Ended

Mar. 29, 2019

Subsequent Events [Abstract]

7. Subsequent Events

7.SUBSEQUENT EVENTS 

On April 15, 2019, the Company signed the second amendment to the Facility Lease (“Lease Amendment”).  The Lease Amendment effectively terminated, as of April 30, 2019, the current term of the Facility Lease, which was previously set to expire October 2019.  Under the Lease Amendment, effective May 1, 2019, the Company will continue to lease 60% of the space, while the other 40% will be leased from the Landlord by a third-party tenant.  The Company will continue to pay 100% of the maintenance and utility costs for the buildings and grounds, of which approximately 40% will be reimbursed by the third-party tenant in accordance with terms set by the Lease Amendment. The lease has a seven-year term with two five-year renewal options.  The monthly base rent will be $35 during the first year with a 3% escalation per year.  

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1. General (Policies)

3 Months Ended

Mar. 29, 2019

Policy Text Block [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Evans & Sutherland Computer Corporation and subsidiaries (collectively, the “Company” or “E&S”) have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, and cash flows, in conformity with U.S. generally accepted accounting principles (“US GAAP”).  This report on Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2018.

The accompanying unaudited condensed consolidated balance sheets, statements of operations, and statements of cash flows reflect all normal recurring adjustments that 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 three months ended March 29, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.  The Company operates on a calendar year with the first three fiscal quarters ending on the last Friday of the thirteenth week in the quarter.  

Revenue Recognition

Revenue Recognition

Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). In accordance with Topic 606, the Company recognizes revenue at a point of time or over the time of performance depending on the nature of the obligation.

Stock-Based Compensation

Stock-Based Compensation

Compensation cost for all stock-based awards is measured at fair value on the date of grant and is recognized over the service period for awards expected to vest.  Determining the fair value of share-based awards at the grant date requires judgment, including estimating the value of share-based awards that are expected to be forfeited. Actual results and future estimates may differ from the Company’s current estimates.

Net Income Per Common Share

Net Loss Per Common Share

Basic net loss per common share is computed based on the weighted-average number of common shares outstanding during the period.  Diluted net loss per common share is computed based on the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period. Stock options are considered to be common stock equivalents. When the Company incurs a loss, potentially dilutive common stock equivalents are excluded as their effect would be anti-dilutive, thereby decreasing the net loss per common share.

Inventories, net

Inventories, net

Inventories consisted of the following:

	March 29,		December 31,
	2019		2018
Raw materials	$	6,096	$	5,979
Work in process		181		116
Finished goods		419		323
Reserve for obsolete inventory		(3,346)		(3,346)
Inventories, net	$	3,350	$	3,072

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) ("Topic 842"). Topic 842 changes the accounting for leases. In particular, lessees will recognize lease assets and lease liabilities for operating leases. Effective January 1, 2019, the Company implemented Topic 842 as described in Note 3.

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1. General (Tables)

3 Months Ended

Mar. 29, 2019

Table Text Block Supplement [Abstract]

Schedule of Inventory

Inventories consisted of the following:

	March 29,		December 31,
	2019		2018
Raw materials	$	6,096	$	5,979
Work in process		181		116
Finished goods		419		323
Reserve for obsolete inventory		(3,346)		(3,346)
Inventories, net	$	3,350	$	3,072

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2. Revenue (Tables)

3 Months Ended

Mar. 29, 2019

Table Text Block Supplement [Abstract]

Schedule of geographical revenues

In the following tables, revenue reported for the periods presented is disaggregated by primary geographical market, major product line, timing of revenue recognition and product application.

Three months ended March 29, 2019
Product Application	Planetarium Theaters	Other Visitor Attractions	Architectural Treatments	Total
Primary geographic area:
North America	$4,179	$215	$76	$4,470
Europe	1,373	316	-	1,689
Asia	485	38	-	523
Other	483	-	-	483
	$6,520	$569	$76	$7,165
Products:
Audio-Visual Systems	$4,396	$151	$-	$4,547
Domes	801	418	76	1,295
Show Content	771	-	-	771
Maintenance and Service	552	-	-	552
	$6,520	$569	$76	$7,165
Timing of revenue recognition:
Goods transferred at point in time	$816	$-	$-	$816
Goods and services transferred over time	5,704	569	76	6,349
	$6,520	$569	$76	$7,165

Three months ended March 30, 2018
Product Application	Planetarium Theaters	Other Visitor Attractions	Architectural Treatments	Total
Primary geographic area:
North America	$3,133	$120	$360	$3,613
Europe	333	11	-	344
Asia	2,456	847	-	3,303
Other	321	-	-	321
	$6,243	$978	$360	$7,581
Products:
Audio-Visual Systems	$3,986	$11	$-	$3,997
Domes	1,375	967	360	2,702
Show Content	326	-	-	326
Maintenance and Service	556	-	-	556
	$6,243	$978	$360	$7,581
Timing of revenue recognition:
Goods transferred at point in time	$481	$-	$-	$481
Goods and services transferred over time	5,762	978	360	7,100
	$6,243	$978	$360	$7,581

Schedule of contract balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers as of March 29, 2019:

	March 29, 2019	December 31, 2018
Receivables reported as accounts receivable, net	$3,794	$3,250
Contract revenue in excess of billings	2,525	3,484
Billings in excess of contract revenue	4,414	5,959

Schedule of changes in the contract assets and the contract liabilities

Significant changes in the contract assets and the contract liabilities balances during the period are as follows:

	Contract Assets	Contract Liabilities
Revenue recognized that was included in the contract liability balance at the beginning of the period		$(3,265)
Increases due to amounts billed to customers, excluding amounts recognized as revenue during the period		$  1,720
Transferred to receivables from contract assets recognized at the beginning of the period	$ (1,343)
Increases as a result of revenue recognized, excluding amounts transferred to receivables during the period	$       384

Schedule of backlog of performance obligations

The following table includes estimated revenue expected to be recognized and recorded as sales in the future from the backlog of performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

	Remainder of 2019	2020	2021	2022	2023
Sales	$14,233	$535	$256	$54	$50

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3. Operating Lease (Tables)

3 Months Ended

Mar. 29, 2019

Notes to Financial Statements

Balance sheet information related to the lease

Balance sheet information related to the lease is as follows:

	March 29,		December 31,
	2019		2018
Operating lease right-of-use asset	$	49	$	187
Operating lease liability, current portion		49		188

Schedule of Future Minimum Payments for Operating Leases

Maturities of the lease liability is as follows:

Future Minimum Lease Payments
2019	$	47

Other information related to the lease

Other information related to the lease:

	March 29,		March 30,
	2019		2018
Operating cashflows
Cash paid related to operating lease obligation	$	143	$	137
Remaining lease term (in years)
Operating lease		0.08		1.08

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5. Stock Option Plan (Tables)

3 Months Ended

Mar. 29, 2019

Table Text Block Supplement [Abstract]

Schedule of Stock Option Plan Activity

A summary of activity in the stock option plan for the three months ended March 29, 2019 follows (shares in thousands):

		Weighted-
		Average
	Number	Exercise
	of Shares	Price
Outstanding as of beginning of the period	1,597	$	0.65
Granted	165		0.80
Exercised	(130)		0.17
Forfeited or expired	(40)		0.66
Outstanding as of end of the period	1,592		0.71
Exercisable as of end of the period	1,164	$	0.61

Schedule of Stock Options Valuation Assumptions

The weighted average values of employee stock options granted under the stock option plan, as well as the weighted average assumptions used in calculating these values during the first three months of 2019, were based on estimates as of the date of grant as follows:

Risk-free interest rate	2.64%
Dividend yield	0.00%
Volatility	81.16%
Expected life	3.5 years

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6. Employee Retirement Benefit Plans (Tables)

3 Months Ended

Mar. 29, 2019

Table Text Block Supplement [Abstract]

Schedule of Net Periodic Benefit Cost

Components of Net Periodic Benefit Expense

	Supplemental Executive
	Retirement Plan
	March 29,		March 30,
For the three months ended:	2019		2018
Interest cost	$	37	$	34
Amortization of actuarial loss		20		20
Net periodic benefit expense	$	57	$	54

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1. General: Inventories: Schedule of Inventory (Details) - USD ($) $ in Thousands	Mar. 29, 2019	Dec. 31, 2018
Text Block [Abstract]
Raw Materials	$ 6,096	$ 5,979
Work-in-process	181	116
Finished goods	419	323
Reserve for obsolete inventory	(3,346)	(3,346)
Inventories, net	$ 3,350	$ 3,072

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2. Revenue: Schedule of geographical revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Application total
Product Application	$ 7,165	$ 7,581
Transferred at Point in Time
Product Application	816	481
Transferred over Time
Product Application	6,349	7,100
Audio-Visual Systems
Product Application	4,547	3,997
Domes
Product Application	1,295	2,702
Show Content
Product Application	771	326
Maintenance and Service
Product Application	552	556
Planetarium Theaters | Application total
Product Application	6,520	6,243
Planetarium Theaters | Transferred at Point in Time
Product Application	816	481
Planetarium Theaters | Transferred over Time
Product Application	5,704	5,762
Planetarium Theaters | Audio-Visual Systems
Product Application	4,396	3,986
Planetarium Theaters | Domes
Product Application	801	1,375
Planetarium Theaters | Show Content
Product Application	771	326
Planetarium Theaters | Maintenance and Service
Product Application	552	556
Other Visitor Attractions | Application total
Product Application	569	978
Other Visitor Attractions | Transferred at Point in Time
Product Application	0	0
Other Visitor Attractions | Transferred over Time
Product Application	569	978
Other Visitor Attractions | Audio-Visual Systems
Product Application	151	11
Other Visitor Attractions | Domes
Product Application	418	967
Other Visitor Attractions | Show Content
Product Application	0	0
Other Visitor Attractions | Maintenance and Service
Product Application	0	0
Architectural Treatments | Application total
Product Application	76	360
Architectural Treatments | Transferred at Point in Time
Product Application	0	0
Architectural Treatments | Transferred over Time
Product Application	76	360
Architectural Treatments | Audio-Visual Systems
Product Application	0	0
Architectural Treatments | Domes
Product Application	76	360
Architectural Treatments | Show Content
Product Application	0	0
Architectural Treatments | Maintenance and Service
Product Application	0	0
North America
Product Application	4,470	3,613
North America | Planetarium Theaters
Product Application	4,179	3,133
North America | Other Visitor Attractions
Product Application	215	120
North America | Architectural Treatments
Product Application	76	360
Europe
Product Application	1,689	344
Europe | Planetarium Theaters
Product Application	1,373	333
Europe | Other Visitor Attractions
Product Application	316	11
Europe | Architectural Treatments
Product Application	0	0
Asia
Product Application	523	3,303
Asia | Planetarium Theaters
Product Application	485	2,456
Asia | Other Visitor Attractions
Product Application	38	847
Asia | Architectural Treatments
Product Application	0	0
Other
Product Application	483	321
Other | Planetarium Theaters
Product Application	483	321
Other | Other Visitor Attractions
Product Application	0	0
Other | Architectural Treatments
Product Application	$ 0	$ 0

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2. Revenue: Schedule of contract balances (Details) - USD ($) $ in Thousands	Mar. 29, 2019	Dec. 31, 2018
Text Block [Abstract]
Accounts receivable, net	$ 3,794	$ 3,250
Contract revenue in excess of billings	2,525	3,484
Other Liabilities, Current	$ 4,414	$ 5,959

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2. Revenue: Schedule of changes in the contract assets and the contract liabilities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Contract revenue recognized
Increase (Decrease) in Contract with Customer, Liability	$ (3,265)
Increase (Decrease) in Contract with Customer, Asset	(1,343)
Contract receivables recorded
Increase (Decrease) in Contract with Customer, Asset	384
Contract amount billed
Increase (Decrease) in Contract with Customer, Liability	$ 1,720

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2. Revenue: Schedule of backlog of performance obligations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 29, 2019	Mar. 30, 2018
Sales		$ 7,165	$ 7,581
Backlog in sales | 2019
Sales	$ 14,233
Backlog in sales | 2020
Sales	535
Backlog in sales | 2021
Sales	256
Backlog in sales | 2022
Sales	54
Backlog in sales | 2023
Sales	$ 50

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3. Operating Lease (Details) $ in Thousands	3 Months Ended
	Mar. 29, 2019 USD ($)
Notes to Financial Statements
Estimated borrowing rate	7.50%
Rent expense	$ 142

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3. Operating Lease: Balance sheet information related to lease (Details) - USD ($) $ in Thousands	Mar. 29, 2019	Dec. 31, 2018
Notes to Financial Statements
Operating lease right-of-use asset	$ 49	$ 187
Operating lease liability, current portion	$ 49	$ 188

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3. Operating Lease: Future Minimum Lease Payments (Details) $ in Thousands	Mar. 29, 2019 USD ($)
Notes to Financial Statements
2019	$ 47

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3. Operating Lease: Other information related to lease (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018	Dec. 31, 2018
Operating cashflows
Cash paid related to operating lease obligation	$ 143	$ 137
Remaining lease term (in years) Operating lease	29 days		1 year 29 days

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4. Changes in Accounting Principal (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 30, 2018	Dec. 31, 2018	Mar. 29, 2019	Jan. 02, 2018
Notes to Financial Statements
Stockholders' equity		$ 8,373	$ 7,777	$ 808
Increase rent expense	$ 110
Increase stockholders' equity		$ 369

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5. Stock Option Plan (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Options exercisable, weighted average remaining contractual term	5 years 8 months 19 days
Options outstanding, weighted average remaining contractual term	6 years 6 months 14 days
Options, Exercisable, Aggregate Intrinsic Value	$ 69
Total unrecognized share-based compensation cost	$ 122
Total unrecognized share-based compensation, compensation cost not yet recognized, weighted-average period	2 years 15 days
Allocated Share-based Compensation Expense	$ 26	$ 39
Stock Option Plan
Number of Shares Authorized	876,981

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5. Stock Option Plan: Schedule of Stock Option Plan Activity (Details) shares in Thousands	3 Months Ended
	Mar. 29, 2019 $ / shares shares
Text Block [Abstract]
Outstanding at beginning of the period | shares	1,597
Outstanding at beginning of year, weighted average exercise price | $ / shares	$ 0.65
Granted | shares	165
Granted, weighted average exercise price | $ / shares	$ 0.80
Exercised | shares	(130)
Exercised, weighted average exercise price | $ / shares	$ 0.17
Forfeited or expired | shares	(40)
Forfeited or expired, weighted average exercise price | $ / shares	$ 0.66
Outstanding at beginning of the period | shares	1,592
Outstanding at beginning of the period, weighted average exercise price | $ / shares	$ 0.71
Exercisable as of end of the period | shares	1,164
Exercisable as of end of the period, weighted average exercise price | $ / shares	$ 0.61

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5. Stock Option Plan: Schedule of Stock Options Valuation Assumptions (Details)	3 Months Ended
	Mar. 29, 2019
Text Block [Abstract]
Risk-free interest rate	2.64%
Dividend yield	0.00%
Volatility	81.16%
Expected life (in years)	3 years 6 months

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6. Employee Retirement Benefit Plans (Details) $ in Thousands	3 Months Ended
	Mar. 29, 2019 USD ($)
Text Block [Abstract]
Pension Plan Settlement Agreement, Payment Schedule	Eight installments of $750 to the Pension Benefit Guaranty Corporation due annually on October 31
Contribution by Employer	$ 438
Imputed interest expense rate	7.00%

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6. Employee Retirement Benefit Plans: Schedule of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Text Block [Abstract]
Interest cost	$ 37	$ 34
Amortization of actuarial loss	20	20
Net periodic benefit cost	$ 57	$ 54

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7. Subsequent Events (Details) - Subsequent Event [Member] $ in Thousands	1 Months Ended
	Apr. 15, 2019 USD ($)
Lease Term	7 years
Renewal lease term	5 years
Monthly base rent	$ 35
Escalation percent	3.00%