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

FORM 10-QSB 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934. 

| For the quarterly period ended:
June 30 2004
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 filed by Section 13or 15(d) of the Exchange Act during the past 12 months (or for such shorter period thatthe registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes [ X ] No [ ] 

The number of shares outstanding of common stock as of June 30, 2004 was 5,098,667. 
** 

 

 

**PART I - FINANCIAL INFORMATION**
**Item 1. FINANCIAL STATEMENTS. 

ELECTRONIC SYSTEMS TECHNOLOGY, INC.(as prepared by Management) (Unaudited) Six Months Ended
June 30, 2004
June 30, 2003Sales
$ 1,282,295
$ 910,912Other Revenues
61,028
83,127Gross Profit
764,160
507,439 Net Income (Loss) Before Taxes 
223,759
15,695Net Income (Loss) After Taxes
147,687
10,358 Earnings (Loss) Per Share Before TaxesBasic
$ 0.04
$ 0.00Diluted
0.04
0.00 Earnings (Loss) Per Share After TaxesBasic
$ 0.03
$ 0.00Diluted
0.03
0.00 Weighted Average Shares Outstanding (Basic)Primary
5,647,937
5,626,325Diluted
5,653,667
5,628,667 Total Assets
$ 2,921,143
$ 2,660,728 Long-Term Debt and Capital Lease    Obligations
$ 0
$ 0 Shareholders' Equity
$ 2,651,964
$ 2,457,950 Shareholders' Equity Per Share
$ 0.52
$ 0.48 Working Capital
$ 2,457,490
$ 2,260,368 Current Ratio
12.7:1
12:1 Equity To Total Assets
91%
92%
 

 
**ELECTRONIC SYSTEMS TECHNOLOGY, INC. BALANCE SHEETS(as prepared by Management) (Unaudited) ****
 
 
June 30, 2004
Dec. 31, 2003ASSETSCURRENT ASSETS Cash and Cash Equivalents
$ 572,413
$ 378,103 Available for Sale Marketable    Securities
1,345,886
1,341,491Accounts Receivable, net of    allowance for uncollectibles
249,144
284,972Inventory
490,526
511,972 Prepaid Expenses
9,300
11,958Prepaid Federal Income Taxes
--
29,433Total Current Assets
2,667,269
2,557,929 PROPERTY & EQUIPMENT net of    depreciation of $445,176 at June 30, 2004 and $420,337 at Dec. 31, 2003
 

232,522
 

222,674 OTHER ASSETS
6,752
27,486Deferred Income Tax Benefit
14,600
14,600TOTAL ASSETS
$ 2,921,143
$ 2,822,689 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIESAccounts Payable
70,512
44,848Refundable Deposits
2,792
80,372Accrued Liabilities
41,689
52,203 Distributions Payable
50,987
--Deferred Income
--
25,088Federal Income Taxes Payable
43,799
--Total Current Liabilities 
209,779
202,511 Deferred Income Taxes
59,400
59,400STOCKHOLDERS' EQUITYCommon Stock,    $.001 Par Value50,000,000 Shares Authorized 5,098,667 Shares Issued And Outstanding 
 

5,099
 

5,099 Additional Paid-in Capital
945,734
945,734 Retained Earnings
1,716,119
1,619,419 Accumulated other Comprehensive Gain (Loss)
(14,988)
(9,474) 
2,651,964
2,560,778 TOTAL LIABILITIES AND    STOCKHOLDERS' EQUITY
$ 2,921,143
$ 2,822,689 
(See "Notes to Financial Statements")

 
**ELECTRONIC SYSTEMS TECHNOLOGY, INC. STATEMENTS OF OPERATIONS (as prepared by Management) (Unaudited) **** 
Three Months    Ended
Six Months Ended
June 30, 2004
June 30, 2003
June 30, 2004
June 30, 2003 SALES
$ 662,726
$ 341,460
$ 1,282,295
$ 910,912COST OF SALESBeginning Inventory
495,514
571,388
511,972
531,599Purchases and Allocated Costs
260,388
170,004
496,689
455,294 
755,902
741,392
1,008,661
986,893Ending Inventory
490,526
583,420
490,526
583,420Total Cost of Sales
265,376
157,972
518,135
403,473Gross Profit
397,350
183,488
764,160
507,439 OPERATING EXPENSESFinance/Administration
51,257
47,296
113,675
138,797Research & Development
80,273
52,394
151,727
106,473Marketing
121,819
107,258
226,374
223,292Customer Service
30,829
30,425
65,256
48,600Total Operating Expenses
284,178
237,373
557,032
517,162OPERATING INCOME (LOSS)
113,172
(53,885)
207,128
(9,723) Other Income (expenses)Interest/Investment Income
5,447
5,889
8,686
13,637Uncollectible amount recovered
--
--
2,178
--Realized Loss on Marketable Securities
--
--
--
(2,334)Management Fee, Marketable Securities
(2,330)
(2,057)
(4,650)
(4,110)Loss on Asset Disposal
--
--
(4)
(1,245)Engineering Services
25,193
28,865
50,164
69,490Engineering Support
(22,567)
(25,266)
(39,743)
(50,020)Net Other Income (Expense)
5,743
7,431
16,631
25,418 NET INCOME (LOSS) BEFORE TAX
118,915
(46,454)
223,759
15,695Provision For Income Tax
(40,340)
15,794
(76,072)
(5,337) NET INCOME (LOSS)
$ 78,575
$ (30,660)
$ 147,687
$ 10,358 Basic Earnings (Loss) Per Share    Before Tax
$ 0.02
$ ( 0.01)
$ 0.04
$ 0.00Basic Earnings (Loss) Per Share    After Tax
$ 0.01
$ ( 0.01)
$ 0.03
$ 0.00Diluted Earnings (Loss) Per Share    Before Tax
$ 0.02
$ ( 0.01)
$ 0.04
$ 0.00Diluted Earnings (Loss) Per Share    After Tax
$ 0.01
$ ( 0.01)
$ 0.03
$ 0.00
(See "Notes to Financial Statements")

 
**STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(as prepared by Management)(Unaudited)**** 
Three Months    Ended
Six Months    Ended
June 30, 2004
June 30, 2003
June 30, 2004
June 30, 2003NET INCOME (LOSS)
$ 78,575
$ (30,660)
$ 147,687
$ 10,358 OTHER COMPREHENSIVE GAIN (LOSS):Unrealized gain (loss) on securities arising    during period (net of tax effect)
(9,524)
1,938
( 5,514)
2,874COMPREHENSIVE INCOME (LOSS)
$ 69,051
$ (28,722)
$ 142,173
$ 13,232
 

 

 

 

 

 

(See "Notes To Financial Statements")
** 

ELECTRONIC SYSTEMS TECHNOLOGY, INC. STATEMENTS OF CASH FLOWS(as prepared by Management) (Unaudited) 
Six Months Ended
June 30, 2004
June 30, 2003CASH FLOWS PROVIDED (USED) IN OPERATING    ACTIVITIES:Net Income (Loss)
$147,687
$10,359Noncash items included in income:  Depreciation
24,836
20,550Amortization
2,128
2,202Loss on Disposition of Assets
4
1,245Loss on Marketable Securities
--
2,334Provision for Federal Income Taxes
29,433
(48,663) DECREASE (INCREASE) IN CURRENT ASSETS:Accounts Receivable Net
35,828
132,870Marketable Securities Investments Purchased
(12,749)
(804,058)Marketable Securities Investments Sold
--
803,666Inventory
21,446
(13,996)Prepaid Expenses
2,658
775Deferred Tax Asset
--
87 INCREASE (DECREASE) IN CURRENT LIABILITIES:Accounts Payable and Accrued Expenses 
15,151
21,026Refundable Deposits
(77,580)
(13,487)Deferred Tax Liability
--
727Accrued Federal Income Taxes 
46,639
(104,594)************ |
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