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
<PAGE>
Form 10-Q
Evans & Sutherland Computer Corporation
QUARTER ENDED March 27, 1998
<TABLE>
Page No.
PART I - FINANCIAL INFORMATION
<S> <C> <C>
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
</TABLE>
2
<PAGE>
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
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EVANS & SUTHERLAND COMPUTER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
<TABLE>
<CAPTION>
March 27, December 31,
1998 1997
------------------- -----------------
Assets (Unaudited)
------
<S> <C> <C>
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
=================== =================
</TABLE>
4
<PAGE>
EVANS & SUTHERLAND COMPUTER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------
March 27, March 28,
1998 1997
------------- ---------------
<S> <C> <C>
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
</TABLE>
5
<PAGE>
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):
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
March 27, March 28,
1998 1997
------------- -------------
<S> <C> <C>
(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
============= =============
</TABLE>
6
<PAGE>
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:
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
March 27, March 28,
1998 1997
---------- ----------
(Unaudited)
<S> <C> <C>
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
========= ==========
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
EXHIBIT 11
EVANS & SUTHERLAND COMPUTER CORPORATION
EARNINGS PER SHARE CALCULATION
Unaudited
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 27,1998 March 28,1997
-------------------------------- --------------------------------
Basic Diluted Basic Diluted
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
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
============= ============== ============== =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000276283
<NAME> EVANS & SUTHERLAND COMPUTER CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-27-1998
<CASH> 11,596
<SECURITIES> 31,419
<RECEIVABLES> 35,624
<ALLOWANCES> 889
<INVENTORY> 28,354
<CURRENT-ASSETS> 174,814
<PP&E> 124,877
<DEPRECIATION> 80,675
<TOTAL-ASSETS> 229,438
<CURRENT-LIABILITIES> 48,806
<BONDS> 18,015
0
0
<COMMON> 1,787
<OTHER-SE> 160,830
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<INCOME-TAX> 764
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</TABLE>
