UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
In the Matter of
Entergy Corporation
Entergy Enterprises, Inc.
Entergy Systems and Service, Inc.
formerly Systems and Service U.S.A., Inc. CERTIFICATE PURSUANT
TO RULE 24
File No. 70-7947
File No. 70-8509
(Public Utility Holding Company Act of 1935)
<PAGE>
Pursuant to Rule 24 promulgated by the Securities and Exchange
Commission (SEC) under the Public Utility Holding Company Act of
1935, as amended, modified by the application(s)-declaration(s) in
the above referenced files and the related orders dated December 28,
1992 and July 27, 1995 (collectively, the "Orders"), this is to
certify that the following paragraphs report transactions carried out
by Entergy Systems and Service, Inc. (ESASI) during the three (3)
months ended September 30, 1995 pursuant to the authorization of the
SEC and provide such other information as is required to be reported
in accordance with the provisions of the Orders.
I. Development of Energy Efficiency Technology and Manufacturing
Processes of Systems & Service International, Inc. (SASI)
As reported in ESASI's Supplemental Rule 24 Certificate, dated
May 5, 1995, in File No. 70-7947, on April 20, 1995 ESASI entered
into a number of transactions with SASI. These transactions included
the execution of an Asset Purchase Agreement pursuant to which ESASI
purchased all of SASI's right, title and interest in the Electronic
Ballast Device and certain other energy efficiency technologies
developed or under development by SASI (exclusive of the Monitor).
ESASI does not believe that SASI is currently pursuing the
development of any other energy efficiency technologies.
ESASI also reported in the above referenced Supplemental Rule 24
Certificate that, concurrently with the above transactions, SASI
transferred substantially all of its assets and liabilities
(including its manufacturing operations) to Systems & Service
International Manufacturing, L.P. (the "Partnership"). The
Partnership, in turn, was assigned all of SASI's rights and
obligations under the Exclusive Distribution Agreement, as amended,
and entered into a Manufacturing Agreement with ESASI pursuant to
which it agreed to continue to manufacture the Electronic Ballast
Device for ESASI at current pricing levels for a minimum term of one
year. Section D of the First Amendment to the Exclusive Distribution
Agreement provides that the Partnership "will exercise its reasonable
best efforts to reduce the cost of producing the Products." During
the third quarter of 1995, SASI continued to make significant
progress in lowering overall Product costs, largely by reducing
administrative and overhead expenses. With respect to the automation
of SASI's production process, manufacturing operations for the
Electronic Ballast Device have already been substantially automated.
However, SASI has determined that anticipated production levels do
not justify the expense associated with further automation of its
assembly lines at this time.
II. Use of SASI's Products Within the BASE Region
As set forth above, on April 20, 1995 SASI assigned the
Exclusive Distribution Agreement, as amended, to the Partnership.
The Monitor is, therefore, currently manufactured and supplied to
ESASI by the Partnership pursuant to the terms of that Agreement.
ESASI and the Partnership also entered into a Manufacturing Agreement
providing for the Partnership to continue to manufacture and supply
the Electronic Ballast Device for ESASI. ESASI has utilized the
Monitor and the Ballast in energy service applications in the "Base
Region." The following is a summary which indicates such
installations and projected energy conservation which will result in
savings of generating capacity.
Number of Annual Projected
Installations Savings
kw's kwh's
186 1,598.02 8,661,198.30
III. Summary of Total Assets and Revenues of ESASI By Type of
Activity
Energy Management Funding of other
& DSM Consulting Contractors
Total Assets * $49,192,820.88
Total Revenues ($1,118,149.00)
* Excludes assets that are not appropriately allocated to any
specific business activity, but which support ESASI's general
business operations.
IV. Summary of Total Assets and Revenues of ESASI By Geographic
Region
Base Region U.S. World
(excluding Base Region) (excluding U.S.)
Total Assets ** $12,580,305.48 $16,443,000.13
Total Revenues ($622,248.28) ($495,900.72)
** Excludes assets that are not dedicated to ESASI's business
activities in any specific geographic region.
V. Financial Statements
ESASI's unaudited Balance Sheets, as of September 30, 1995, and
as of the reporting date, respectively, and Income Statements for the
three month periods ending September 30, 1995, and for the calendar
year to date, respectively, are attached hereto.
<PAGE>
IN WITNESS WHEREOF, the undersigned companies have caused this
certificate to be executed this 16th day February, 1996.
Entergy Corporation
Entergy Enterprises, Inc.
Systems and Service U.S.A., Inc.
(now Entergy Systems and Service, Inc.)
By: /s/Michael G. Thompson
Michael G. Thompson
Entergy Systems and Service, Inc.
Statement of Operations
For the Quarter Ended September 30, 1995
(Unaudited)
Revenue $ (1,118,149.00)
Cost of Goods Sold (1,726,493.83)
------------------
Gross Margin 608,344.83
Selling, general and administrative expenses:
Salaries and wages 8,772,410.60
Other 9,483,908.72
------------------
Operating loss (17,647,974.49)
Other income 1,118,183.17
Interest expense 1,948,562.72
------------------
Loss before income taxes (18,478,354.04)
Income taxes (6,467,423.92)
------------------
Net loss $ (12,010,930.12)
==================
<PAGE>
Entergy Systems and Service, Inc.
Balance Sheet
September 30, 1995
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 51,460,342.07
Accounts receivable 1,739,640.13
Other current assets 178,501.66
------------------
Total current assets 53,378,483.86
------------------
Furniture, fixtures and equipment, net 9,127,294.00
Equipment Inventory - held for installation 20,169,515.27
Installations-in-process 2,294,902.12
Installed equipment 20,577,315.21
Loan receivable from affiliate 2,700,000.00
Goodwill, net 772,424.13
Deferred taxes 5,394,771.74
Other assets 28,740,571.49
-----------------
$ 143,155,277.82
==================
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 1,087,593.59
Accrued liabilities 950,782.65
Current portion of capital lease obligations 157,927.22
------------------
Total current liabilities 2,196,303.46
------------------
Note payable to parent 0.00
Deferred credit - Sanwa 12,997,176.76
Deferred service contract revenue 14,974,082.19
Capital lease obligations 224,987.44
Long-term Liabilities 7,765,858.00
------------------
Total liabilities 38,158,407.85
------------------
Shareholder's equity:
Common stock, no par value, 50,000 shares authorized,
13,500 shares issued and outstanding 13,500,000.00
Paid-in Capital 125,000,000.00
Accumulated deficit (33,503,130.03)
------------------
Total shareholder's equity 104,996,869.97
------------------
$ 143,155,277.82
==================
<PAGE>
Entergy Systems and Service, Inc.
Total Assets & Revenues by Activity
September 30, 1995
(Unaudited)
Assets by Activity:
Energy Management & DSM Services $ 49,192,820.88
==================
Revenues by Activity:
Energy Management & DSM Services $ (1,118,149.00)
==================
<PAGE>
Entergy Systems and Service, Inc.
Total Assets & Revenues by Geographic Region
September 30, 1995
(Unaudited)
Assets by Region:
Inside Base Region $ 12,580,305.48
Outside Base Region 16,443,000.13
------------------
Total Assets 29,023,305.61
==================
Revenues by Region:
Inside Base Region $ (622,248.28)
Outside Base Region (495,900.72)
------------------
Total Revenues (1,118,149.00)
==================
Entergy Systems and Service, Inc.
Statement of Operations
Year-to-Date January 31, 1996
(Unaudited)
Revenue $ 1,113,165.00
Operating Expense 1,425,268.00
------------------
Gross Margin (312,103.00)
Selling Expense 1,424,128.00
Marketing 62,676.00
Administrative & General Expense 1,336,926.00
Other Expense/Income 435,519.00
------------------
Net Operating Profit Before Taxes (3,571,352.00)
Income taxes (1,249,973.00)
------------------
Net loss $ (2,321,379.00)
==================
Statement of Operations as of the reporting date.
Entergy Systems and Service, Inc.
Balance Sheet
January 31, 1996
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 35,501,927.09
Accounts receivable 1,252,262.56
Other current assets 153,047.52
-------------
Total current assets 36,907,237.17
Investments:
Note Receivable - SASI, Inc. 2,430,000.00
HES Service Contracts, net 4,069,789.91
-------------
Total investments 6,499,789.91
Fixed Assets:
Furniture and equipment, net 9,506,351.73
Intangible Assets, net 652,051.81
Equipment Inventory - held for installation 16,831,958.30
Installations-in-process 9,850,421.86
Installed equipment 28,781,209.85
-------------
Total fixed assets 65,621,993.55
Deferred Debits:
Miscellaneous Debits 5,905,161.11
SASI Technology 8,752,408.55
Deferred Income Taxes 7,500,265.05
Other Assets, net 3,204,632.84
-------------
Total deferred debits 25,362,467.55
--------------
TOTAL ASSETS $ 134,391,488.18
==============
Balance Sheet as of the reporting date.
Entergy Systems and Service, Inc.
Balance Sheet
January 31, 1996
(Unaudited)
LIABILITIES AND CAPITAL
Current & Accrued Liabilities:
Accounts Payable $ 305,107.12
Accrued Liabilities 5,527,023.28
Current Portion of Capital Lease Obligations 157,873.22
-------------
Total current liabilities 5,990,003.62
Long-Term Liabilities:
Note payable to parent 0.00
Capital lease obligations 188,787.04
Long-term Liabilities 7,348,850.00
-------------
Total long-term liabilities 7,537,637.04
Deferred Credits:
Service Contract Revenue 31,389,289.49
-------------
Total deferred credits 31,389,289.49
Total liabilities 44,916,930.15
Capital:
Common stock, no par value, 50,000 shares authorized,
13,500 shares issued and outstanding 13,500,000.00
Paid-in Capital 125,000,000.00
Accumulated deficit (49,025,441.97)
--------------
Total capital 89,474,558.03
--------------
TOTAL LIABILITIES & CAPITAL $ 134,391,488.18
==============
Balance Sheet as of the reporting date.
