Value Microcaps Motherboard

[Guy]

ESCC (.34) – bought last week @.33-.35. The company
lost 13c on revenues of $12.4 for the first 6 months of 2014
vs a loss of 16c on revenues of $9.9 in the first 6 months of 2013.

Revenues for the first 6 months were up approx 25% and their Backlog is going up as well. In the end of Q2 backlog was $21.4 million, up from $19.7 on March and $17.2 million on December 2013.

In Q2 PR, the CEO said:
"With the improved backlog and strong sales prospects we still
believe that sales and overall results for 2014 will be comparable to 2013."

In 2013, their EPS was 0.11 on $29.6 in revenues. In order for the results to be comparable, they need to make approx .24c a share in Q3 & Q4 (which were the stronger Q's in 2013 as well).

"the weaker sales and resulting net loss in the first half of 2014 was primarily the result of the timing of work and deliveries on customer projects rather than a negative trend in the overall business. New bookings and the sales backlog continued to improve which creates a more encouraging outlook for the remainder of 2014."

Also, cash balances continued to improve from progress payments received on new customer orders.
Net cash provided by operating activities was $2.3 million for the first 6 months. Cash is up to $6.5 million (740k of it is restricted)

Market cap is only $3.8 million and the stock would be much higher if not for the company's pension liabilities, but they
are working on a resolution. A settlement of their pension plan
can be another catalyst:

“We have made significant progress toward the settlement of our Pension Plan liabilities through the distress termination application process. Recent correspondence with the Pension Benefit Guaranty Corporation indicates that the application process will result in a settlement of the Pension Plan liabilities on terms that will enable the Company to continue to operate as a going concern. However, the Company is uncertain of the timing or the ultimate outcome"

"The Company initiated an application process for the distress termination of the Pension Plan in accordance with provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) which it believes will result in a settlement of its Pension Plan liabilities on terms that are feasible for the Company to continue in business as a going concern through 2014 and beyond. However, as of the date of this filing, the Company is uncertain of the timing or the ultimate outcome."