UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON 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:
March 31 2005
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(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 March 31, 2005was 5,148,667. 
**PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.**
ELECTRONIC SYSTEMS TECHNOLOGY, INC.

SELECTED FINANCIAL DATA(as prepared by Management)(Unaudited)
Three Months Ended
Mar. 31, 2005
Mar. 31, 2004Sales
$ 555,248
$ 619,569Other Revenues
$ 34,082
$ 30,388Gross Profit
$ 313,505
$ 366,810 Net Income (Loss) Before Taxes 
$ 37,325
$ 104,844Net Income (Loss) 
$ 24,719
$ 69,112 Earnings (Loss) Per Share Before TaxesBasic
$ 0.01
$ 0.02Diluted
$ 0.01
$ 0.02 Earnings (Loss) Per Share Basic
$ 0.01
$ 0.01Diluted
$ 0.01
$ 0.01 Weighted Average Shares Outstanding (Basic)Primary
5,148,667
5,098,667Diluted
5,253,050
5,253,580 Total Assets
$ 2,951,679
$ 2,815,144 Long-Term Debt and Capital Lease    Obligations
$ 0
$ 0 Shareholders' Equity
$ 2,724,669
$ 2,633,900 Shareholders' Equity Per Share
$ 0.53
$ 0.52 Working Capital
$ 2,496,897
$ 2,384,184 Current Ratio
17.5:1
21.1:1 Equity To Total Assets
92 %
94 %
 

 

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

BALANCE SHEET(as prepared by Management)(Unaudited)
 
Mar. 31, 2005
Dec. 31 ,2004ASSETSCURRENT ASSETS Cash and Cash Equivalents
$ 404,281
$ 488,480 Short Term    Certificates of Deposit Investments
359,370
--Available for Sale    Marketable Securities
1,016,381
1,344,619Accounts Receivable,    net of allowance for uncollectibles
229,526
257,080 Inventory
602,368
605,159 Accrued Interest
943
--Prepaid Expenses
19,232
12,578Prepaid Software/Network    Services-current portion
16,306
--Total Current Assets
2,648,407
2,707,916 PROPERTY &    EQUIPMENT net of Depreciation of $489,468 at Mar. 31, 2005 and $476,185 at Dec. 31, 2004
251,350
253,456 OTHER ASSETS
3,911
4,624DEFERRED INCOME TAX BENEFIT
15,400
17,300PREPAID SOFTWARE/NETWORK    SERVICES-long term portion
32,611
--TOTAL ASSETS
$ 2,951,679
$ 2,983,296 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable
86,952
96,949Refundable Deposits 
6,574
3,630Federal Income Taxes Payable
11,319
39,201Accrued Liabilities
46,665
69,255 Total Current Liabilities 
151,510
209,035 DEFERRED INCOME TAXES 
75,500
75,500 STOCKHOLDERS' EQUITYCommon Stock, $.001    Par Value 50,000,000 Shares Authorized 5,148,667 Shares Issued And Outstanding
5,149
5,149 Additional Paid-in Capital
966,184
966,184 Retained Earnings
1,767,971
1,743,252 Accumulated other comprehensive    loss
(14,635)
(15,824) 
2,724,669
2,698,761 TOTAL LIABILITIES AND    STOCKHOLDERS' EQUITY
$    2,951,679
$ 2,983,296 
(See "Notes To Financial Statements")

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

STATEMENTS OF INCOME (LOSS)(as prepared by Management)(Unaudited)
Three Months Ended
Mar. 31, 2005
Mar. 31, 2004 SALES
$ 555,248
$ 619,569COST OF SALESBeginning Inventory
605,159
511,972Purchases and Allocated Costs
238,952
236,301 
844,111 
748,273 Ending Inventory
602,368
495,514Total Cost of Sales
241,743
252,759Gross Profit
313,505
366,810 OPERATING EXPENSESFinance/Administration
76,004
62,417Research & Development
66,692
71,454Marketing
105,033
104,555Customer Service
29,262
34,428Total Operating Expense
276,991
272,854OPERATING INCOME (LOSS)
36,515
93,956 Other Income (expenses)Interest Income
6,324
3,239Uncollectible Accounts Recovered
--
2,178Realized Loss on Marketable Securities
(5,642)
--Management Fee, Marketable Securities
(2,324)
(2,320)Loss on Asset Disposal
(132)
(4)Engineering Services
27,758
24,971Engineering Support
(25,173)
(17,176)Net Other Income (expense)
(811)
10,888 NET INCOME BEFORE TAX
37,325
104,844Provision For Income Tax
( 12,606)
( 35,732)NET INCOME 
$ 24,719
$ 69,112 Basic Earnings Per    Share Before Tax
$ 0.01
$ 0.02Basic Earnings Per    Share After Tax
$ 0.01
$ 0.01 Diluted Earnings Per    Share Before Tax
$ 0.01
$ 0.02Diluted Earnings Per    Share After Tax
$ 0.01
$ 0.01
(See "Notes To Financial Statements")

 

 

 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(as prepared by Management)(Unaudited)

 
Three Months Ended
Mar. 31, 2005
Mar. 31, 2004NET INCOME 
$ 24,719
$ 69,112 OTHER COMPREHENSIVE LOSS:Unrealized gain (loss) on securities arising    during period (net of tax effect)
(2,535)
4,010COMPREHENSIVE INCOME 
$ 22,184
$ 73,122
 

 

 

 

 

 

 

 

 

 

(See "Notes To Financial Statements")

ELECTRONIC SYSTEMS TECHNOLOGY, INC.

STATEMENT OF CASH FLOWS(as prepared by Management)(Unaudited)
Three Months Ended
Mar. 31, 2005
Mar. 31, 2004 CASH FLOWS PROVIDED (USED) IN OPERATING    ACTIVITIES:Net Income 
$ 24,719
$ 69,112Noncash items included in income:
Depreciation

17,678
14,552
Amortization

713
1,064
Loss on Disposition of Assets

132
4
Loss on Marketable Securities

5,642
--
Provision for Federal Income Taxes

( 612)
29,433
Accrued Interest

( 943)
-- DECREASE (INCREASE) IN CURRENT ASSETS:Accounts Receivable Net
27,554
19,732Certificates of Deposit Purchased
( 360,000)
--Marketable Securities Investments Purchased
--
( 2,749)Marketable Securities Investments Sold
325,028
--Inventory
2,791
16,458Prepaid Software and Network Services
( 16,306)
--Deferred Tax Benefit
1,900
--Prepaid Expenses
( 6,654)
( 1,235) DECREASE (INCREASE) IN LONG TERM ASSETS:Prepaid Software and Network Services
( 32,611)
-- INCREASE (DECREASE) IN CURRENT LIABILITIES:Accounts Payable and Accrued Expenses 
( 32,587)
12,110Refundable Deposits
2,944
( 75,925)Accrued Federal Income Taxes
( 27,882)
6,299Deferred Income
--
( 25,088) 
( 68,494) 
63,767 CASH FLOWS PROVIDED (USED) IN INVESTING    ACTIVITIES:Additions To Property And    Equipment
( 15,705)
( 576) 
( 15,705)
( 576)CASH FLOWS PROVIDED (USED) IN FINANCING    ACTIVITIES:No Financing Activities Recorded
--
-- NET INCREASE (DECREASE) IN CASH    AND EQUIVALENTS
(84,199) 
63,191Cash and Equivalents At Beginning    Of Period
488,480
378,103Cash and Equivalents At Ending of Period 
$ 404,281
$ 441,294 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS    INFORMATION:Cash Paid Year To Date:Interest
0
0Federal Income Taxes
$ 39,201
$ 0 Cash and Equivalents:Cash
$ 10,560
$ 11,100Money Market Accounts
393,721
430,194 
$ 404,281
$ 441,294
(See "Notes To Financial Statements")

ELECTRONIC SYSTEMS TECHNOLOGY, INC.NOTES TO FINANCIAL STATEMENTS(as prepared by Management)(Unaudited)
**NOTE 1 - BASIS OF PRESENTATION**
The financial statements of Electronic Systems Technology, Inc. (the"Company"), presented in this Form 10QSB are unaudited and reflect, in theopinion of Management, a fair presentation of operations for the three month periods endedMarch 31, 2005 and March 31, 2004. Certain information and footnote disclosure normallyincluded in financial statements prepared in accordance with generally accepted accountingprincipals have been condensed or omitted pursuant to the applicable rules and regulationsof the Securities and Exchange Commission. In preparation of the financial statements,certain amounts and balances have been restated from previously filed reports to conformto the format of this quarterly presentation. These financial statements should be read inconjunction with the audited financial statements and notes thereto included in theCompany's Form 10K for the year ended December 31, 2004 as filed with Securities andExchange Commission.

The results of operation for the three-month periods ended March 31, 2005 and March 31,2004 are not necessarily indicative of the results expected for the full fiscal year orfor any other fiscal period.
**NOTE 2 - INVENTORIES**
Inventories are stated at lower of cost or market with cost determined using the FIFO(first in, first out) method. Inventories consist of the following:
 
March 31 2005
December 312004Parts
$ 313,499
$ 248,433Work in progress
130,513
104,488Finished goods
158,356
252,238 
$ 602,368
$ 605,159**NOTE 3 - EARNINGS PER SHARE**
Basic EPS excludes dilution and is computed by dividing incomeavailable to common stockholders by the weighted-average number of common sharesoutstanding for the period. Diluted EPS reflects potential dilution occurring ifsecurities or other contracts to issue common stock were exercised or converted intocommon stock or resulted in the issuance of common stock that then shared in the earningsof the Company. The primary weighted average number of common shares outstanding was5,148,667 and 5,098,667 for the quarters ended March 31, 2005 and 2004 respectively.

For the Quarter Ended    March 31, 2005 
Income (Numerator)
Shares (Denominator)
Per Share Amount
Basic EPS

Income available to common stockholders
    $24,719
    5,148,667
    $0.01
Diluted EPS

Income available to common stockholders + assumed conversions
 

    $24,719**