Evans & Sutherland Computer Cor (OTC:ESCC)

Tuesday, November 10, 2015

Research

ESCC ($1.12) Reported Strong Q3 2015 Results

In May, we stated that despite being up 492% from our initial special situation alert on 2/28/2014, we were maintaining our long position in ESCC.  Shares are now up 700% from that point.  Over the last couple of months, the company’s settlement of a pension liability, which we wrote about here, gave shares a boost.

Yesterday, during the trading day, ESCC reported strong Q3 2015 results:

  • Sales were $9.4 million, compared to sales of $7.7 million for the third quarter 2014.

  • Net income was $0.9 million or $0.08 per share compared to a net income for the third quarter 2014 of $0.6 million or $0.06 per share.

  • Backlog as of October 2, 2015 was $29.2 million compared to backlog of $28.2 million as of December 31, 2014.

With the pension liability behind them, we believe it has enabled the company to increase order flow and continue to fill its backlog which is evident in the sequential increase from Q2.  For the first nine months of 2015, ESCC has reported NON-GAAP EPS of $0.21.  The company expects this trend of profitability to continue.  Quote from press release:

“we were profitable in each of the first three quarters of 2015 before the non-recurring pension related charges. With the healthy backlog and sales prospects, we anticipate sales at levels that should continue to yield profitable results for the remainder of 2015.”

We continue to hold our long position.