Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended: September 30, 1996
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:
3239 Imjin Road, Marina, CA 93933
Issuer's telephone number: (408) 582-1050
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, 1996: 1,066,748
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, 1996 (unaudited)
and June 30, 1996 Page 3
Statements of Operations
Three months ended September 30,
1996 and 1995 (unaudited) Page 5
Statements of Cash Flows
Three months ended September 30,
1996 and 1995 (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,
1996 1996
(unaudited)
______________________________________
<S> <C> <C>
CURRENT ASSETS
Cash 142,722 128,199
Receivables, net of allowance for
doubtful accounts 179,984 134,621
Inventory
Costs & estimated earnings on
long-term contracts -- 54,301
Work-in-process 4,361 14,178
Computer parts 117,526 63,958
Prepaid expenses 1,759 4,398
------- -------
Total current assets 446,352 399,655
FURNITURE AND EQUIPMENT, net of
$58,782 and $56,707 of
accumulated depreciation 24,054 20,662
PROTOTYPE EQUIPMENT, net of
$90,180 and $83,946 of
accumulated depreciation 42,053 45,708
Deposits 4,475 4,474
------- -------
516,934 470,499
======= =======
Page 3 of 10
<PAGE>
<CAPTION>
BALANCE SHEETS (CONTINUED)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, June 30,
1996 1996
(unaudited)
________________________________
CURRENT LIABILITIES
Note payable -0- -0-
Accounts Payable 65,499 69,252
Accrued Liabilities 93,772 90,530
Payables - officers/directors 140,663 140,663
Current portion of capitalized
lease obligation 9,045 8,701
Deferred Revenue/LT Contracts 2,450 6,020
------- -------
Total current liabilities 311,429 315,166
Capitalized lease obligation 5,174 7,567
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 (1,663,858) (1,716,423)
--------- ---------
Total stockholders' equity 200,323 147,766
--------- ---------
516,934 470,499
========= =========
<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
1996 1995
_____________________________
<S> <C> <C>
Revenues
Sales 313,687 390,231
Costs and expenses
Cost of sales 125,404 191,419
Marketing 61,619 16,079
Research and development 5,117 3,108
General and administrative 68,982 74,054
------- -------
261,122 284,660
------- -------
Net income (loss) 52,565 105,571
======= =======
Net income (loss) per common share .049 .099
Weighted average common shares 1,081,000 1,066,749
<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
1996 1995
____________________________
<S> <C> <C>
Cash flows from operating activities:
Net income <loss> 52,565 105,571
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 8,309 4,992
(Increase) decrease in receivables (45,363) (24,183)
(Increase) decrease in costs and
estimated earnings on long-term
contracts 54,301 6,109
(Increase) decrease in inventories (43,751) (25,254)
(Increase) decrease in prepaid
expenses/deposits 2,638 4,938
Increase (decrease) in accounts
payable (3,753) 7,927
Increase (decrease) in accrued
liabilities and customer deposits 3,242 15,619
Increase (decrease) in payables--
officers/directors -0- (1,341)
Increase (decrease) in deferred
revenue (3,570) (3,570)
------- -------
Net cash provided by (used in)
operating activities 24,618 90,808
Cash flows from investing activities
Acquisition of prototype equipment (8,046) --
------- -------
Net cash used in investing
activities (8,046) --
------- -------
Cash flows from financing activities
Payments on line of credit -0- (80,000)
Payments on capital lease (2,049) (410)
------- -------
Net cash used in financing
activities: (2,049) (80,410)
------- -------
Page 6 of 10
<PAGE>
Net increase (decrease) in cash and
cash equivalents 14,523 10,398
Cash and cash equivalents at beginning
of period 128,199 3,215
------- -------
Cash and cash equivalents at end of
period 142,722 13,613
======= =======
Supplemental disclosures of cash flow
information
Cash paid during the period for
interest 644 4,054
<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, 1996 and 1995 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, 1996 includes audited financial statements as of June 30,
1996 and 1995, 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 $52,565 on gross sales
of $313,687 for the first quarter of fiscal year 1997. This
successful quarter resulted from repeat project business with
strong margins. The Company has a backlog in excess of $112,000
as of 9/30/96, most of which is deliverable in the second quarter
of fiscal year 1997 (fourth quarter of calendar year 1996).
Proposal activity remains strong. Management remains optimistic
about the fiscal year performance.
FINANCIAL CONDITION
At September 30, 1996, the Company had a working capital surplus
of $134,923 as compared to a working capital (deficiency) of
$(33,115) at September 30, 1995.
Systems West, Inc. currently has no outstanding line of credit
financing. The Company's existing working capital is supporting
Systems West's short-term operating requirements. Current
working capital is supplemented periodically by export loans
guaranteed by the California Export Finance Office on
international business.
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)
11/8/96 Kenneth W. Ruggles
(Date) (Signature)
11/8/96 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-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 142,722
<SECURITIES> 0
<RECEIVABLES> 194,719
<ALLOWANCES> (14,735)
<INVENTORY> 121,887
<CURRENT-ASSETS> 446,352
<PP&E> 215,069
<DEPRECIATION> 148,962
<TOTAL-ASSETS> 516,934
<CURRENT-LIABILITIES> 311,429
<BONDS> 0
<COMMON> 1,703,746
0
8
<OTHER-SE> 160,435
<TOTAL-LIABILITY-AND-EQUITY> 516,934
<SALES> 313,687
<TOTAL-REVENUES> 313,687
<CGS> 125,404
<TOTAL-COSTS> 261,122
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 52,565
<INCOME-TAX> 52,565
<INCOME-CONTINUING> 52,565
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52,565
<EPS-PRIMARY> .049
<EPS-DILUTED> .049
</TABLE>
