UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549

FORM 10-QSB

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

| For the quarterly period ended:
September 30 2003
 

Commission File Number:
000-27793
 
**ELECTRONIC SYSTEMS TECHNOLOGY, INC.**
(A Washington Corporation)

I.R.S. Employer    Identification no.
91-1238077
415 N. Quay St., #4Kennewick WA 99336
Registrant’s telephone number, including area code:(509) 735-9092
 

 

Check whether the issuer (1) has filed all reports required to be filedby Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorterperiod that the registrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes [ X ] No [ ] 

The number of shares outstanding of common stock as of September 30,2003 was 5,098,667.

 

 
**PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

ELECTRONIC SYSTEMS TECHNOLOGY, INC.(as prepared by Management)(Unaudited)

SELECTED FINANCIAL DATANine Months Ended
September 30, 2003
September 30, 2002Sales
$ 1,556,664
$ 1,384,892Other Revenues
99,859
120,150Gross Profit
858,887
763,367 Net Income (Loss) Before Taxes 
133,777
232,222Net Income (Loss) After Taxes
88,293
154,841 Earnings (Loss) Per Share Before    TaxesBasic
$ 0.024
$ 0.04Diluted
0.024
0.04 Earnings (Loss) Per Share After    TaxesBasic
$ 0.016
$ 0.03Diluted
0.016
0.03 Weighted Average Shares    Outstanding Primary
5,625,064
5,624,352Diluted
5,628,667
5,633,667 Total Assets
$ 2,704,981
$ 2,670,310 Long-Term Debt and Capital Lease Obligations
$ 0
$ 0 Shareholders' Equity
$ 2,534,405
$ 2,464,991 Shareholders' Equity Per Share
$ 0.50
$ 0.48 Working Capital
$ 2,280,587
$ 2,271,608 Current Ratio
14.4:1
12:1 Equity To Total Assets
94%
92%
 

 
**ELECTRONIC SYSTEMS TECHNOLOGY, INC.BALANCE SHEETS(as prepared by Management)(Unaudited)****
September 30,    2003
December 31,    2002ASSETSCURRENT ASSETS Cash and Cash Equivalents
$ 261,798
$ 322,997 Available for Sale Marketable Securities
1,339,008
1,337,668Accounts Receivable, Net of Allowance for    Uncollectibles
286,487
302,269 Inventory
530,072
569,424 Prepaid Expenses
25,282
11,023Prepaid Federal Income Taxes
8,516
0Total Current Assets
2,451,163
2,543,381 PROPERTY & EQUIPMENT Net of    Depreciation of $405,493 at September 30, 2003    and $395,366 at December 31, 2002
    234,722
    159,182 OTHER ASSETS
9,983
30,407Deferred Income Tax Benefit
9,113
9,200TOTAL ASSETS
$ 2,704,981
$ 2,742,170 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIESAccounts Payable
100,023
38,855Refundable Deposits
6,412
21,758Deferred Tax Liability 
32,608
30,400Federal Income Taxes Payable
0
104,594Accrued Liabilities
31,533
27,019Total Current Liabilities 
170,576
222,626 STOCKHOLDERS' EQUITY    Common Stock, $.001 Par Value 50,000,000 Shares Authorized 5,098,667 Shares Issued And    Outstanding 
    5,099
    5,099 Additional Paid-in Capital
945,734
945,734 Retained Earnings
1,584,706
1,572,893Accumulated Other Comprehensive Gain (Loss)
(1,134)
(4,182)
2,534,405
2,519,544 TOTAL LIABILITIES AND    STOCKHOLDERS' EQUITY
$ 2,704,981
$ 2,742,170 
 

(See "Notes to Financial Statements")

 
**ELECTRONIC SYSTEMS TECHNOLOGY, INC.STATEMENTS OF OPERATIONS(as prepared by Management)(Unaudited)

 
Three    Months Ended
Nine Months    Ended
September 30,    2003
September    30,    2002
September 30,    2003
September    30,    2002SALES
$    645,752
$ 385,191
$ 1,556,664
$ 1,384,892COST OF SALESBeginning Inventory
583,420
576,602
569,424
531,599Purchases and Allocated Costs
240,956
208,971
658,425
690,700
824,376
785,573
1,227,849
1,222,299Ending Inventory
530,072
600,774
530,072
600,774Total Cost of Sales
294,304
184,799
697,777
621,525Gross Profit
351,448
200,392
858,887
763,367OPERATING EXPENSESFinance/Administration
40,769
35,248
179,565
139,436Research & Development
72,691
37,925
179,164
122,211Marketing
91,282
97,980
314,574
237,013Customer Service
32,158
21,313
80,759
67,410Total Operating Expense
236,900
192,466
754,062
566,070OPERATING INCOME (LOSS)
114,548
7,926
104,825
197,297Other Income    (Expenses)Interest/Investment Income
4,377
9,676
18,014
23,369Realized Loss on Marketable    Securities
--
--
(2,334)
--Management Fee, Marketable    Securities
(2,067)
--
(6,176)
--Uncollectible Amounts Recovered
--
287
--
287Loss on Asset Disposal
--
--
(1,245)
--Engineering Services
12,355
23,822
81,845
96,494Engineering Support
(11,132)
(21,157)
(61,152)
(85,225)Net Other Income (Expense)
3,533
12,628
28,952
34,925INCOME (LOSS) BEFORE TAX
118,081
20,554
133,777
232,222Provision For Income Tax
(40,147)
(6,988)
(45,484)
(77,381)NET INCOME (LOSS)
$    77,934
$ 13,566
$ 88,293
$ 154,841Basic Earnings (Loss)    Per Share Before Tax
$ 0.021
$ 0.004
$ 0.024
$ 0.041Basic Earnings (Loss) Per Share    After Tax
$ 0.014
$ 0.002
$ 0.016
$ 0.028Diluted Earnings (Loss) Per Share    Before Tax
$    0.021
$ 0.004
$ 0.024
$ 0.041Diluted Earnings (Loss) Per Share    After Tax
$    0.014
$ 0.002
$ 0.016
$ 0.028
(See "Notes to Financial Statements") 

 
** 

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(as prepared by Management)(Unaudited)
 
Three Months    Ended
Nine Months    Ended
September 30, 2003
September 30, 2002
September 30, 2003
September 30, 2002NET INCOME (LOSS)
$ 77,934
$ 13,566
$ 88,293
$ 154,841 OTHER COMPREHENSIVE GAIN (LOSS):Unrealized gain (loss) on securities arising    during period (net of tax effect)
(1,479)
--
2,874
--COMPREHENSIVE INCOME (LOSS)
$ 76,455
$ 13,566
$ 91,168
$ 154,841
 

 

 
** 

 **
(See "Notes To Financial Statements")
** 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.STATEMENTS OF CASH FLOWS(as prepared by Management)(Unaudited)
Nine Months Ended
September 30,    2003
September 30, 2002 CASH FLOWS PROVIDED (USED) IN    OPERATING ACTIVITIES:Net Income (Loss)
$88,293
$154,841Noncash items included in income:Depreciation
33,118
28,965Loss on Disposition of Assets
1,245
--Loss on Marketable Securities
2,334
--Amortization
3,302
3,304 DECREASE (INCREASE) IN CURRENT    ASSETS:Accounts Receivable Net
15,782
21,559Marketable Securities Investments Purchased
(802,000)
(1,215,681)Marketable Securities Investments Sold
803,666
--Inventory
39,352
(69,175)Prepaid Expenses
(14,259)
(20,688)Prepaid Federal Income Taxes
(8,516)
6,633Accrued Interest
--
591 INCREASE (DECREASE) IN    CURRENT LIABILITIES:Accounts Payable and Accrued Expenses 
65,682
2,298Refundable Deposits
(15,346)
40,752Accrued Federal Income Taxes
(104,594)
70,748
108,059
(975,853) CASH FLOWS PROVIDED (USED) IN    INVESTING ACTIVITIES:Deposits Applied to Property and Equipment
17,122
(23,122)Additions To Property And Equipment
(109,900)********** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|