E&S drop in sales not a big surprise

Evans & Sutherland Computer Corp. suffered a 21 percent drop in sales for the first quarter of 2004, but company officials said Thursday the decline was not unexpected and better results are anticipated during the next three months.

Sales for the first quarter were $17.8 million, down 21.2 percent from the same quarter last year. The company sustained a net loss of $3 million, or 29 cents per share, compared to a net loss of $24.3 million, or $2.32 per share, for the first quarter of 2003.

"The first quarter was as expected," said James R. Oyler, E&S president and chief executive officer, in a prepared statement. "After a profit in the fourth quarter of 2003, we had projected a loss in the first quarter of 2004 because of expected lower revenue compared to the prior quarter. The lower revenue was due to the delivery pattern of our backlog, as well as the timing of new orders. Compared to the same quarter of last year, both operating expenses and the operating loss are significantly reduced."

Oyler said E&S has received a new order from the U.S. Army for visual systems used in computer simulators for tanks and ground warfare training. Volume deliveries are expected to begin in the second quarter.

"Backlog decreased slightly in the (first) quarter," Oyler said. "However, our new products are performing very well, and we expect higher orders and revenue in the second and subsequent quarters, leading to profitability in the second half."

Salt Lake-based Evans & Sutherland produces visual systems for simulation, training and visualization in defense and commercial applications and digital theaters and related applications.

The company suffered a 30 percent decline in sales in 2003 and a net loss more than triple the 2002 figure, which it attributed to several factors, including a restatement of United Kingdom operations figures for three quarters that originally were wrong. Oyler called 2003 a "transition year," which would eventually lead Evans & Sutherland back to profitability.

After dipping in early trading Thursday, shares of Evans & Sutherland stock rallied to close up 30 cents, or 6.3 percent, at $5.05 per share.

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E-mail: jnii@desnews.com