Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended: September 30, 1995
Commission file number: 33-15682-LA
Exact name of small business issuer as specified in its charter:
Systems West, Inc.
State or other jurisdiction of incorporation or organization:
Colorado
IRS Employer Identification No.: 94-3026545
Address of principal executive offices:
27880 Dorris Drive, Carmel, CA 93923
Issuer's telephone number: (408) 625-6911
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
November 1, 1995: 1,066,749
This Form 10-QSB is not covered by an accountant's report
Page 1 of 10
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
September 30, 1995 (unaudited)
and June 30, 1995 Page 3
Statements of Operations
Three months ended September 30,
1995 and 1994 (unaudited) Page 5
Statements of Cash Flows
Three months ended September 30,
1995 and 1994 (unaudited) Page 6
Notes to Financial Statements
(unaudited) Page 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations Page 9
PART II. OTHER INFORMATION Page 10
SIGNATURES Page 10
EXHIBITS: Exhibit 27 - Financial Data Schedule
Page 2 of 10
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
ASSETS
September 30, June 30,
1995 1995
(unaudited)
______________________________________
<S> <C> <C>
CURRENT ASSETS
Cash 13,613 3,215
Receivables, net of allowance for
doubtful accounts 323,676 299,493
Inventory
Costs & estimated earnings on
long-term contracts -- 6,109
Work-in-process 35,852 29,204
Computer parts 67,891 49,285
Prepaid expenses 3,085 8,023
_______ _______
Total current assets 444,117 395,329
FURNITURE AND EQUIPMENT, net of
$50,696 and $48,878 of
accumulated depreciation 20,951 22,769
PROTOTYPE EQUIPMENT, net of
$67,479 and $64,305 of
accumulated depreciation 36,835 40,009
Deposits 1,474 1,474
_______ _______
503,377 459,581
Page 3 of 10
<PAGE>
<CAPTION>
BALANCE SHEETS (CONTINUED)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, June 30,
1995 1995
(unaudited)
________________________________
CURRENT LIABILITIES
Note payable 50,000 130,000
Accounts Payable 106,612 98,685
Accrued Liabilities 162,867 147,248
Payables - officers/directors 139,285 140,626
Current portion of capitalized
lease obligation 1,738 1,738
Deferred Revenue/LT Contracts 16,730 20,300
Total current liabilities 477,232 538,597
Capitalized lease obligation 6,697 7,107
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
1,000,000 shares authorized,
Series A, 812.5 shares issued
and outstanding (liquidation
preference of $32,500) 8 8
Common stock, no par value;
5,000,000 shares authorized,
1,066,749 shares issued and
outstanding 1,703,746 1,703,746
Additional paid-in capital 160,435 160,435
Accumulated deficit (1,844,741) (1,950,312)
Total stockholders' equity 19,448 (86,123)
503,377 459,581
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
Page 4 of 10
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
September 30
1995 1994
_____________________________
<S> <C> <C>
Revenues
Sales 390,231 115,257
Costs and expenses
Cost of sales 191,419 107,533
Marketing 16,079 15,992
Research and development 3,108 301
General and administrative 74,054 66,220
_______ _______
284,660 190,046
Net income (loss) 105,571 (74,789)
Net income (loss) per common share .099 (.068)
Weighted average common shares 1,066,749 1,095,320
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
Page 5 of 10
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended September 30
1995 1994
____________________________
<S> <C> <C>
Cash flows from operating activities:
Net income <loss> 105,571 (74,789)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 4,992 5,005
(Increase) decrease in receivables (24,183) (35,881)
(Increase) decrease in costs and
estimated earnings on long-term
contracts 6,109 383,732
(Increase) decrease in inventories (25,254) (40,110)
(Increase) decrease in prepaid
expenses/deposits 4,938 9,673
Increase (decrease) in accounts
payable 7,927 18,553
Increase (decrease) in accrued
liabilities and customer deposits 15,619 (4,791)
Increase (decrease) in payables--
officers/directors (1,341) 2,953
Increase (decrease) in deferred
revenue (3,570) -0-
Net cash provided by (used in)
operating activities 90,808 264,345
Cash flows from investing activities
Acquisition of prototype equipment -- (1,076)
______ _______
Net cash used in investing
activities -- (1,076)
______ _______
Cash flows from financing activities
Payments on line of credit 80,000 334,688
Payments on capital lease 410 351
______ _______
Net cash used in financing
activities: (80,410) (335,039)
Page 6 of 10
<PAGE>
Net increase (decrease) in cash and
cash equivalents 10,398 (71,770)
Cash and cash equivalents at beginning
of period 3,215 87,442
______ _______
Cash and cash equivalents at end of
period 13,613 15,672
Supplemental disclosures of cash flow
information
Cash paid during the period for
interest 4,054 4,383
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
Page 7 of 10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared by
the Company without audit. In the opinion of management, the
accompanying unaudited financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary for a fair presentation of the Company's financial
position as at September 30, 1995 and 1994 and the results of its
operations, changes in its stockholders' equity and cash flows
for the respective periods then ended. Management has elected to
omit certain disclosure required by generally accepted accounting
principles. The Company's Form 10-KSB for fiscal year ended June
30, 1995 includes audited financial statements as of June 30,
1995 and 1994, complete with the auditors' report and footnotes
to the financial statements, and should be read in conjunction
with this Form 10-QSB.
2. STOCKHOLDERS' EQUITY
On May 25, 1993, the Company's shareholders approved a 1 for 400
reverse split of the Company's common stock and preferred stock,
and increased the authorized capital stock of the Company to
5,000,000 shares of no par value common stock and 1,000,000
shares of $.01 par value preferred stock. Retroactive effect has
been given to all share and per share data in the accompanying
financial statements.
The Series A preferred stock has a $40.00 per share liquidation
preference and is convertible to common stock on an eighteen for
one basis at the option of the holders. The preferred stock may
be redeemed at any time at $40.00 per share, at the election of
the Board of Directors of the Company.
The Company has authorized but unissued shares of preferred stock
which may be issued in such series and preferences as determined
by the Board of Directors.
Page 8 of 10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Systems West, Inc. posted net income of $105,571 on gross sales
of $390,231 in the first quarter of fiscal year 1996. This
successful quarter resulted from healthy revenue increases and
repeat project business with strong margins. The Company has a
firm backlog in excess of 375,000 as of 9/30/95, most of which is
deliverable in quarter two and three of 1996. Management remains
optimistic about the fiscal year sales projections and overall
performance.
The Company continues to be constrained by insufficient working
capital to support effective levels of production and sales
activity. Current working capital is supplemented by export
loans guaranteed by the California Export Finance Office on
international business.
Additional investors and/or partners are currently actively being
sought, to enable the Company to capitalize on the significant
worldwide opportunities available with the current products.
FINANCIAL CONDITION
At September 30, 1995, the Company had a working capital
(deficiency) of $(33,115) as compared to a working capital
(deficiency) of $(23,170) at September 30, 1994.
Systems West, Inc. has received an extended line of credit
valuedat $95,000 guaranteed by the California Export Finance
Office. This directed line of credit, along with the Company's
limited working capital, is supporting Systems West's short-term
working capital requirements.
Page 9 of 10
<PAGE>
PART II. OTHER INFORMATION
No information is included in answer to Items 1, 2, 3, 4, 5, or 6
under Part II as the Items are either not applicable or, if
applicable, the answer is negative.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SYSTEMS WEST, INC.
(Registrant)
11/10/95 Kenneth W. Ruggles
(Date) (Signature)
11/10/95 Douglas S. Timms
(Date) (Signature)
Page 10 of 10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 13,613
<SECURITIES> 0
<RECEIVABLES> 323,676
<ALLOWANCES> 0
<INVENTORY> 103,743
<CURRENT-ASSETS> 444,117
<PP&E> 57,786
<DEPRECIATION> 118,175
<TOTAL-ASSETS> 503,377
<CURRENT-LIABILITIES> 477,232
<BONDS> 0
<COMMON> 1,703,746
0
8
<OTHER-SE> 160,435
<TOTAL-LIABILITY-AND-EQUITY> 503,377
<SALES> 390,231
<TOTAL-REVENUES> 390,231
<CGS> 191,419
<TOTAL-COSTS> 284,660
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 105,571
<INCOME-TAX> 105,571
<INCOME-CONTINUING> 105,571
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 105,571
<EPS-PRIMARY> .099
<EPS-DILUTED> .099
</TABLE>
