SOURCE: San West

May 17, 2010 08:01 ET

San West, Inc. Reports Record Revenue for First Quarter 2010

Revenue for the First Quarter Increases 175% vs. Q1 2009

SANTEE, CA--(Marketwire - May 17, 2010) - San West, Inc. (OTCBB: SNWT), an emerging leader in the off-road vehicle (ORV) industry and operator of the industry leading On Road Vehicle portal, www.CountyImports.com, today reported financial results for its first quarter of 2010, the period ended March 31, 2010 and provided guidance for expected second quarter 2010 results.

Operational and Corporate Highlights

--  www.CountyImports.com introduced a new motorized scooter, a 300cc
    Chariot, with best-in-class power and unprecedented range targeted to
    the mass market. The 300cc Chariot attracts a full spectrum of riders
    and generates enough power to literally drive across the United States
    at speeds of 100 miles per hour with 80 mile per gallon efficiency. To
    complement the power and environmentally favorable performance, all
    49cc-300cc Trikes sold by CountyImports.com -- including the 300cc
    Chariot -- are equipped with a fully automatic CVT power train and
    reverse-drive capabilities.

--  The Company announced significant improvements to a number of key
    business metrics pertaining to efficiency of the online advertising
    strategy employed by partner website, www.CountyImports.com. The
    keyword marketing overhaul campaign, launched in early February and
    announced March 4, 2010, has rapidly transformed www.CountyImports.com
    into the leading online on and off-road vehicle (ORV) dealer with
    regard to "natural" or "organic" web traffic, driving a record flow of
    free, highly-targeted web traffic to the website, and in turn
    facilitating a 37% decrease in overall online advertising costs
    compared to both 2008 and 2009, the two most lucrative years in the
    website's history.

--  San West and Buggy World awarded a custom Buggy World "Truggy" to
    Solana Beach resident Kim Thompson at the KSON 97.3 and 92.1 FM
    CountryFest on May 1, 2010 at the Lakeside Rodeo Grounds in Lakeside,
    Calif.

--  The Company announced that management is now aggressively searching for
    a new Orange County, CA retail location to focus primarily on further
    accelerating sales of San West's burgeoning motorized scooter
    offerings, as well as its traditional selection of high performance
    buggies. San West, Inc. management is now in the final stages of
    negotiations with a number of prime locations and intends to announce
    an agreement within the next 30 to 90 days.

First Quarter Financial Results

The Company reported revenues for the first quarter of $493,615, an increase of 175.1% compared to revenue of $179,423 for the first quarter of 2009. This represents the highest sales for any first quarter in San West's history. Gross profit for the quarter was $135,492, or 27.4% gross profit margin, compared sequentially with gross profit margin of $111,641, or 22.3% for the fourth quarter of 2009 and compared to gross profit of $65,544 or 36.5% gross profit margin for the first quarter of 2009. Total operating expenses were $924,422, an increase compared to $215,547 for the three months ended March 31, 2009. The increase in expense is mainly due to the recognition of $642,175 in non-cash stock compensation primarily related to our new director, Jesse Gonzales, receiving five million shares of restricted common stock valued at $467,500 and other stock compensation expenses. Excluding stock compensation, SG&A was $282,267, or 31.0% higher than the first quarter of 2009. Net loss for the quarter was $(952,404), or ($0.01) per share, compared to a net loss of $160,154, or ($0.00) per share, for the first quarter last year.

"This was a strong start to what we believe will be a record 2010, including the highest sales volume in any first quarter in our company's history," commented Frank Drechsler, President and CEO of San West, Inc. "We exceeded our guidance for the first quarter of the year, a quarter that is typically seasonally lower than other periods, and our efforts to attract natural traffic to our online properties is continuing to result in higher conversion rates, more revenue per sales, and repeat customers. We continue to believe that as we execute our strategic plan, the advertising adjustments, combined with our search engine optimization and marketing strategies, will result in significant growth in our online revenues. In addition, our efforts to bolster our retail, brick-and-mortar presence in Southern California, should benefit our financial results as well."

Outlook

For the second quarter ended June 30, 2010, management expects revenue of at least $1 million, which would be the highest revenues in San West history.

Mr. Drechsler concluded, "San West and CountyImports.com management continue to be excited about the future. As we move into the seasonally stronger part of our fiscal year, coinciding with the start of the ORV season, we are well positioned as a recognized leader in the ORV industry. Our efforts to bolster our online properties and reduce our customer acquisition costs position us for success in the future, and we continue to believe 2010 will be a record year for San West."

About San West, Inc.

San West is an emerging leader in the on and off-road vehicle (ORV) industry and operator of the industry leading ORV portal, www.CountyImports.com. The Company's web properties have emerged as the established home for all facets of the ORV industry, including off-road buggies, scooters, ATVs, parts and accessories. San West's retail store locations in Southern California specialize in the design, manufacture, sales and repairs off-road buggies. Additionally, the retail and online stores provide aftermarket performance products and accessories for off-road buggies and other ORVs. 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.CountyImportParts.com, and www.SanWestInc.com.

Forward-Looking Statements

This release contains forward-looking statements, including, without limitation, statements concerning our business and possible or assumed future results of operations. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including: our ability to continue as a going concern, adverse economic changes affecting markets we serve; competition in our markets and industry segments; our timing and the profitability of entering new markets; greater than expected costs, customer acceptance of our products or difficulties related to our integration of the businesses we may acquire; and other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law. There is no assurance that a definitive agreement will be completed.


San West, Inc.
Consolidated Balance Sheets


                                                  March 31,   December 31,
                   ASSETS                           2010          2009
                                                ------------  ------------
CURRENT ASSETS
Cash                                            $     47,804  $     50,659
Accounts receivable                                    6,694           840
Inventory (Note B)                                   232,501       287,921
Other current assets                                  36,765        33,897
                                                ------------  ------------
  Total current assets                               323,764       373,317

Fixed assets (Note C)                                130,226       130,226
Accumulated depreciation                             (37,434)      (31,974)
                                                ------------  ------------
  Net fixed assets                                    92,792        98,252

Deposits                                              12,599        12,599
Goodwill (Note D)                                    234,100       234,100
                                                ------------  ------------
  Total assets                                  $    663,255  $    718,268
                                                ============  ============

 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable (Note E)                       $    725,169  $    749,257
Other current liabilities                            176,276       187,689
Floorplan notes payable (Note F)                     108,679       117,962
Convertible promissory notes (Note G)                150,000             -
Notes payable (Note H)                               276,000       510,000
Subsidiary purchase-current portion (Note I)          29,000        32,292
                                                ------------  ------------
  Total current liabilities                        1,465,124     1,597,200

Subsidiary purchase (Note I)                         227,112       223,820
Loans from shareholder (Note J)                      216,950       216,950
                                                ------------  ------------
  Total liabilities                                1,909,186     2,037,970

Commitments and contingencies

        STOCKHOLDERS' DEFICIT (Note K)
Preferred stock, no par value, 10,000,000
 shares authorized; none issued and outstanding            -             -
Common stock, no par value, 300,000,000 shares
 authorized; issued and outstanding 146,446,540
 and 124,960,826 at March 31, 2010 and December
 31, 2009, respectively.                           3,032,743     2,028,648
Common stock payable                                 461,905       439,825
Accumulated deficit                               (4,740,579)   (3,788,175)
                                                ------------  ------------
  Total stockholders' deficit                     (1,245,931)   (1,319,702)
                                                ------------  ------------
Total liabilities and shareholder's deficit     $    663,255  $    718,268
                                                ============  ============


The accompanying notes are an integral part of these financial statements


San West, Inc.
Consolidated Statements of Operations (Unaudited)


                                                     Three Months Ended
                                                          March 31,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------

Revenue                                           $   493,615  $   179,423
Cost of goods sold                                    358,123      113,879
                                                  -----------  -----------
Gross profit                                          135,492       65,544

Expenses
  Selling, general and administrative                 924,442      215,547
                                                  -----------  -----------
    Total expenses                                    924,442      215,547

Loss from operations                                 (788,950)    (150,003)

Other income (expense)
  Other income                                              4            -
  Amortization of beneficial conversion feature      (150,000)           -
  Amortization of deferred financing costs               (862)           -
  Interest expense                                    (12,596)     (10,151)
                                                  -----------  -----------
    Total other income (expense)                     (163,454)     (10,151)
                                                  -----------  -----------
Net loss                                          $  (952,404) $  (160,154)
                                                  ===========  ===========

Net (loss) per common share basic                 $     (0.01) $     (0.00)
Weighted average shares outstanding basic and
 diluted                                          134,487,651   76,307,556
                                                  ===========  ===========

The average shares listed below were not included in the computation of
 diluted losses per share because to do so would have been antidilutive
 for the periods presented:

Convertible promissory notes                        3,991,350    7,727,890
                                                  ===========  ===========

 The accompanying notes are an integral part of these financial statements