SOURCE: San West Inc.

November 13, 2009 06:15 ET

San West Inc. Reports Third-Quarter 2009 Results

Management Projects Q4 Revenue to Exceed $800,000

SAN DIEGO, CA--(Marketwire - November 13, 2009) - San West Inc. (OTCBB: SNWT), an emerging leader in the design, manufacturing, sales and repairs of off-road buggies , today reported financial results for its quarter ended September, 30, 2009 and provided guidance for expected fourth-quarter 2009 results.

Operational and Corporate Highlights

--  On October 9, 2009, San West entered into a partnership agreement with
    www.CountyImports.com, the second largest online dealer in the U.S. and is
    expected to add $3.2 million to top line revenue by year end 2010.
--  On June 5, 2009, San West completed a reverse merger with Human
    BioSystems, Inc. and changed its name to San West Inc.  The Company is
    listed on the OTC Bulletin Board under the ticker symbol SNWT.
--  On August 13, 2008, San West acquired Buggy World, San Diego's
    exclusive authorized sales, service and parts distributor, in a transaction
    which is expected to add $1.6 million in annualized revenue to San West.
    The transaction was valued at approximately $615,000. Buggy World's product
    line includes brands such as Volkswagon, Subaru, Fox Racing Shox, Redline
    and Joyner parts.
    

Financial Results

The Company reported revenues for the third quarter of $217,099, an increase of 53.4% compared to $141,534 for the third quarter last year, when San West was a private company. The year-over-year increase was primarily due to the inclusion of Buggy World sales in 2009 as a result of its acquisition in August of 2008. Gross profit for the quarter was $35,695, or 16.4% gross profit margin, compared to gross margin of $32,951, or 23.3% gross profit margin last year. Total operating expenses were $284,867 compared to $146,802, with the increase due mainly to the purchase of Buggy World and resulting increases in personnel, facility, advertising, insurance and other general operating costs related to becoming a publicly traded entity. Net loss for the quarter was $262,184 or $(0.01) per share, compared to a net loss of $112,903, or $(0.01) per share in the third quarter last year.

"2009 is proving to be a transformational year for San West Inc. and we continue to put the pieces in place to grow our sales, increase our presence in this growing industry and deliver value to our shareholders," commented Frank Drechsler, President and CEO of San West Inc. "Over the course of the last 12 months, we have acquired Letz Go Racing and Buggy World, become a publicly traded company and established strategic alliances with motor-sports industry leaders including TrophyKart, San Diego SportCycles and www.CountyImports.com. We have also successfully launched an aggressive sales and marketing campaign, strategically focused on gaining acclaim in our core markets by establishing a presence at industry events and trade-shows as well as online through social media networks such as Facebook, and organic email campaigns. These efforts are already beginning to pay dividends for San West as fourth-quarter sales are expected to reach record levels. While the state of the economy provided a challenging environment for a company with such an aggressive agenda at the beginning of 2009, recent consolidation in the motor-sports industry has created an increasingly favorable opportunity for building a one-stop motor-sports superstore. A slow-down in our core markets actually blessed us with added leverage in some very important negotiations and allowed San West to diversify its offering and place increased focus on its service and repair business, which really thrived as new vehicle sales slumped."

For the first nine months of 2009, revenue was $546,620, an increase of 228.9% compared to the $166,219 for the first nine months of last year. Gross profit was $146,336, or 26.8% gross profit margin, compared to gross profit of $19,303, or 11.6% gross profit margin last year. The net loss for the first nine months of 2009 was $574,557, or $(0.03) per share, compared to a net loss of $140,530, or $(0.01) per share last year.

Outlook

For the fourth quarter, the Company expects revenue to exceed $800,000, or more than three times the revenue generated in the third quarter, due to rapid growth from the Company's internet marketing initiatives and the initial success from the sales and marketing strategy at trade shows and industry events.

Mr. Drechsler added, "Looking forward, we have a lot to be excited about. The fourth quarter is traditionally our best quarter of the year and thus far, we are experiencing abnormally high weekly and monthly sales levels. Revenues generally spike for the holiday shopping season and the rising potential of our core motor-sports markets is providing an optimal complement to an unprecedented surge in fourth quarter sales. Buggies are becoming a household name, not just a niche sport, and San West, with a growing portfolio of industry recognized brand names, is the emerging turnkey provider of all things related to this fun and exciting industry. According to the Consumer Product Safety Commission, sales of off-road vehicles have grown from less than 2,000 units in 1998 to more than 126,000 in 2008. These statistics reflect a high potential market opportunity still in its infancy and San West is positioned to grow with it. We are also particularly excited about the launch of our new media campaign and radio advertisements in the Southern California marketplace, enabling us to effectively reach our target market and bring in holiday shoppers."

About San West Inc.

San West designs, manufactures, sells and repairs off-road buggies, and additionally provides aftermarket performance products and accessories for off-road buggies. Products are sold via three divisions: at retail store locations, via the online store and through its growing dealer network. Buggy repair services are sold and fulfilled at the Santee, California retail location.

For further information about San West Inc. visit www.CountyImports.com, www.BuggyWorld.net and www.SanWestInc.com.

Contact Information

  • Contact:
    San West Inc.
    Corporate Communication
    (858) 246-6822