UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 KSB
Annual Report Pursuant To Section 13 Or 15(D)
Of The Securities Exchange Act Of 1934
For the fiscal year ended: December 31, 1995
Commission file number: 0-12227
Sutron Corporation
(Exact name of registrant as specified in its charter.)
Virginia 54-1006352
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21300 Ridgetop Circle, Sterling Virginia 20166
(Address of principal executive offices) (Zip Code)
(703) 406-2800
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form,
and no disclosure will be contained to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or
any amendments to this Form 10-KSB. [X]
Issuer's revenues for its most recent fiscal year were
$5,532,612.
The aggregate market value of the voting stock held by non-
affiliates as of March 12, 1996 was approximately $729,562
based on the average bid and asked prices of such stock.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
Common Stock, $.01 Par Value - 4,225,851 shares of as of March 12, 1996.
Documents Incorporated by Reference
Portions of the registrant's definitive proxy statement dated April 10 1996
are incorporated in Part III as set forth herein.
PART I
Item 1. Business
Business Development
Sutron Corporation, incorporated in 1975, is an environmental
monitoring firm. The Company designs and manufactures
environmental monitoring and control systems for use by
government agencies and industry. The Company's business is to
provide real-time data collection,
telemetry, and technical expertise to monitor, control, manage,
and forecast activities in the areas of hydrology, meteorology
and water management.
Business
The Company offers products and professional services in the
areas of hydrology, meteorology and water mangement. Sutron's
products consist of sensors, data collection platforms (DCP's)
and remote terminal units (RTU's) with telemetry capability and
system and application software. Sutron provides services in
the integration and installation of turnkey real-time data
collection systems, the support of Sutron's data management
software and in the maintenance and repair of field site
sensors and data collection platforms. Sutron's customers
include a diversified base of federal, state and foreign
government agencies, universities, the Department of Defense
and hydropower companies.
Products
The Products Division manufactures data collection platforms,
remote terminal units and sensors. Sutron's data collection
platforms and remote terminal units collect and transmit sensor
data to central facilities by radio, telephone, cable, fiber
optics, or microwave. Sutron's sensors support the collection
of hydrological and meteorological data and include a tipping
bucket rain gauge, a barometric pressure sensor, a temperature
sensor, and several water level sensors. The Company's
equipment is compatible with sensors from other companies.
Sutron has long-standing relationships with suppliers for wind
speed and wind direction, water quality, humidity and solar radiation sensors.
Sutron's Products Division maintains a MIL-Q-9858 certification
and is currently working towards an ISO 9000 certification.
The Company's principal products are described below.
8200/8210 Data Logger/Transmitter
The 8200/8210 Data Logger/Transmitter is a simple-to-
operate, low-cost data collection platform which supports a
wide variety of telemetry applications. The 8200/8210 is
environmentally hardened, capable of operating from -40 C to 60
C, making it ideal for remote locations. As a data recorder,
the 8200/8210 will store over 65,000 readings in battery backed
memory. The 8200/8210 supports a wide variety of
communications, including radio, satellite, and telephone. The
Telephone/Voice Synthesis option allows communications over
standard telephone circuits using either a synthesized voice
message or a modem connected to a computer terminal.
8400 Digital Data Logger
The 8400 Digital Data Recorder consists of a shaft encoder
and data logger integrated into a single enclosure that is
compatible with the accessories of older analog water level
recorders which it was designed to replace. The 8400 is a low
cost, low maintenance system that reduces te time required for
site servicing and data processing and makes water level
monitoring networks more efficient.
9000 RTU Family
The 9000 RTU is an expandable multitasking RTU System designed
for remote control data acquisition and control. The 9000 is
modular by design which affords its users great flexibility in
the use and application of these units. This family of plug in
modules is available for the collection of sensor data, output
control of process devices, and data communication between
other 9000 RTUs and a central site. Sutron has certified the
9000 radio transmitter on the GOES, ARGOS, GMS, and METEOSAT
satellites. The 9000 RTU in various configurations is
currently installed and collecting and transmitting seismic
data around Naples, Italy, meteorological data in Canada,
Switzerland, Australia, Pakistan and New Zealand, and tidal
information around the United States and in Taiwan as well as
controlling a series of pumping stations, near Alamosa,
Colorado and Yuma, Arizona.
8600 Wind Sensor
The 8600 Wind Sensor began under an Air Force contract awarded
to Sutron in 1985 to develop a replacement for the AN-GMQ-20,
an aging wind sensing system used by the U.S. Air Force. The
8600 combined thick film sputtering and microprocessor
technology to create a state-of-the-art wind sensor named the
AN-FMQ-13. Initial efforts to purchase components off the
shelf to meet the Air Force specifications proved unsuccessful.
During 1988 and 1989 Sutron redesigned the 8600 sensor head in
an effort to improve the accuracy and to improve the de-icing
capabilities. Acceptance testing by the Air Force began again
in April 1989, and "First Article" approval was granted in
November 1989. Items manufactured under this contract have
included 8600 wind sensors and ancillary displays and recording
equipment, ground support equipment and spares. The Company
received contracts for spares and for repairs of older units in
1995 with final delivery and acceptance of these items
anticipated in 1996.
Services
The company provides system integration services which include
the sale of Sutron's real-time database software (HYDRIS/PC
Base), the design and developement of customer-specific
hardware configurations and software applications, and long-
term software support for (HYDRIS/PC Base) users. This
capability allows the Company to provide turnkey hydrological
and meteorological systems to a variety of users.
Distribution Methods of Products and Services
The Company's products and services are currently sold in the
United States by the Company's direct sales force. As of
December 31, 1995, the Company employed six salaried sales and
marketing personnel, including four engaged directly in field
sales activities, and two in various other marketing and sales
support functions. Internationally, the Company utilizes
manufacturers' representatives to market its products and
services.
Customers
During 1995, approximately 76% of the Company's products and
services were sold to the Federal Government. Revenues in 1995
among the various agencies were as follows: Department of
Commerce NOAA, 1.5%; U.S. Army Corps of Engineers, 9%;
Department of Defense, 9%; Department of the Interior, 56%; and
various other agencies of the federal government, .5%. The
revenues from the Corps of Engineers were spread among some ten
(10) separate Districts, and the revenues from the Department
of the Interior among two (2) Regions. As all of these
districts and agencies act independently, the loss of any
single district or agency as a customer would not have a
material adverse effect on the Company's business. See Note 12
to the Financial Statments under Part II, Item 7 hereof for
this information.
The Company also performed on various contracts of foreign
origin. Total revenues from foreign customers amounted to
approximately 14% of total revenues in 1995, 22% of total
revenues in 1994, and approximately 27% in 1993. Sutron
actively markets its products and services internationally.
Contracts for products or services with federal, state and
local government agencies typically allow for termination at
the convenience of the government and for audit and annual
negotiation of overhead rates. Upon termination, the Company
would be entitled to reimbursement for allowable costs incurred
and to a proportionate share of profits or fees earned to the
date of termination. Such contracts are also typically
dependent upon compliance by the contractor with applicable
civil rights, equal employment opportunity, and contract
procurement requirements. The Company at this time has no
reason to believe that any material changes will occur in the
foreseeable future with respect to federal, state, or local
government programs or services with respect to which the
Company has been granted its contracts or provides its
services. However, due to changes in administration, national
goals and budgetary restrictions, funding of such programs or
services could be altered or abolished. If a substantial cut-
back in the level of funding by the applicable government
agency were to occur, it would have a material adverse effect
on the Company. Further, while certain of the Company's
contracts are dependent upon its continued certification by the
Small Business Administration as a "Small Business" (the
principal elements for certification being an employer
principally engaged in specified activities with less than 500
employees), the Company does not believe it would be materially
affected by the loss of such certification(s) which usually
differ for each industry.
Although the Company's military contracts are subject to audit
by the Defense Contract Audit Agency, prior audits have not
resulted in material adjustments and the Company does not
anticipate that any additional such audits would result in
material adjustments.
Competition
The Company is aware of both domestic and foreign competitors
offering complete real-time networks of their own, and
companies which fabricate real-time networks from components
manufactured by themselves and others. The Company is also
aware of numerous additional firms, ranging in size from large
to small, from general to highly specialized, and from new to
well established, offering competitive sensors and other
instruments, DCPs, telemetry equipment, satellite and other
electronic equipment, and software.
Several of these companies have financial, research and
development, marketing, management and technical resources
substantially greater than those of the Company. The Company
may also be at a competitive disadvantage because it purchases
certain sensors and other equipment components, as well as
computer hardware and peripheral equipment, from manufacturers
who are or may become competitors with respect to one or more
of the Company's products.
The Company, with respect to its professional engineering and
technical services, is in competition with numerous diverse
engineering and consulting firms, many of which have larger
staffs and facilities, and are better known, have greater
financial resources, and have more experience than the Company.
As to its maintenance services, the Company is aware that many
of the firms offering competitive products, as well as several
independent service organizations, offer maintenance services;
some of these companies have larger staffs, are better
equipped, and have greater financial, marketing and management
resources than the Company.
Price, performance and integration capabilities are believed by
the Company to be the primary competitive factors with respect
to all of its products and services.
Research and Development
During the three years ended December 31, 1995, 1994, and 1993,
Sutron's internally funded research and development costs were
$505,953, $434,300, and $409,751 respectively. New products
developed in 1995 consisted of a chart driver and new data
management modules for HYDRIS/PC Base.
Patents, Trademarks, Copyrights and Agreements
Although the Company does not deem patent protection to be of
significant importance to its industry, it has and may in the
future seek patents for certain of its products, real-time
networks, and technology as well as Company software products,
real-time networks, and technology. Company software products
and innovations may not be patentable but may be subject to
automatic but limited copyright protection. The Company has
treated its products, real-time networks, technology and
software as proprietary and relies on trade secret laws and
internal non-disclosure safeguards rather than making their
designs and processes generally available to the public by
applying for patents. Further, the Company believes that,
because of the rapid pace of technological change in the
computer, electronics and telecommunications industries, patent
and copyright protection is of less significance than factors
such as the knowledge and experience of Company personnel and
their ability to design and develop enhanced and new products,
real-time networks and their components.
Under the Company's federal contracts, the federal government
obtained, among other rights, the right to move any and all
equipment from place to place and to reproduce purchased
equipment. However, since the Company has not disclosed its
electrical schematics for its equipment or source codes for its
computer software for use in connection with such equipment,
the Company believes that it would not be economical for the
government to exercise its reproduction rights.
Raw Materials
The raw materials used by the Company, such as electronic
components and fabricated parts, are generally available from a
wide variety of sources at competitive prices. The Company does
not anticipate that its present or proposed business activities
would be substantially adversely affected by the scarcity of
any raw materials.
Backlog
The Company's backlog at December 31, 1995 was $1,390,682 as
compared with $830,000 at December 31, 1994 and $1,175,638 at
December 31, 1993. The Company anticipates that all of its
1995 year-end backlog will be shipped in 1995.
Employees
The Company had a total of 40 full-time employees as of December 31, 1995.
Item 2. Properties
On July 30, 1992, the Company entered into a five and one-half
year lease, for approximately 17,000 square feet of
manufacturing and office space in Sterling, Virginia. The
lease commenced on October 23, 1992. This facility allowed the
Company to consolidate it's manufacturing, systems integration,
research and development, and sales and administration
departments into one building.
In October, 1986, the Company purchased a 4.2-acre building
site in Sterling, Virginia and commissioned an architectural
firm to design a new facility. This site is located in the
technology park where the Company currently leases space. In
an effort to reduce the debt of the Company and the associated
interest expenses, the Company is seeking a purchaser for the
land, site plans, and architectural plans. See Note 6 to the
Financial Statements under Part II, Item 7 hereof for this
information.
The Company believes that its facility is adequate for its
present needs and that its properties are in good condition,
well maintained and adequately insured.
Item 3. Legal Proceedings
The Company is not a party to any pending legal proceeding nor
is its property the subject of a pending legal proceeding.
Item 4. Submission of Matters To A Vote of Security Holders
No matter was submitted during the fourth quarter of 1995 to a
vote of the Company's security holders, either through the
solicitation of proxies or otherwise.
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters
(a) Market Information
The common stock of Sutron Corporation is quoted over the
counter through the NASD Bulletin Board supplied by the
National Association of Securities Dealers, Inc. under the
symbol STRN, and through the Pink Sheet Service of the National
Quotation Bureau, Inc. The following table shows the high and
low bid quotations in 1995 and 1994 by quarter as reported by
the National Quotation Bureau, Inc. and the National
Association of Securities Dealers, Inc. These quotations
represent prices between dealers in securities, do not include
retail mark-ups, mark-downs, or commissions and do not
necessarily represent actual transactions.
<TABLE>
MARKET INFORMATION
<CAPTION>
1995 1994
Quarter HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
First Quarter 5/8 1/4 5/8 1/4
Second Quarter 9/16 1/4 9/16 1/4
Third Quarter 9/16 1/8 9/16 1/4
Fourth Quarter 5/16 1/16 3/8 1/4
</TABLE>
(b) Approximate Number of Equity Shareholders:
Title of Class: Common Stock, $.01 par value
Approximate Number of Record Holders At March 12,1996: 341
(c) Dividends:
The Company has never paid a dividend on its common stock and the Board of
Directors intends for the foreseeable future to retain all earnings for use
in the Company's business.
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations
<TABLE>
The following table sets forth for the periods indicated the
percentage of net sales represented by each line item in the
Company's Statement of Operations:
<CAPTION>
Fiscal Year
1995 1994 1993
<S> <C> <C> <C>
Revenues 100.0% 100.0% 100.0%
Cost of sales 63.7 62.8 59.7
Gross profit 36.3 37.2 40.3
Selling, general
and administrative
expenses 23.5 23.4 20.1
Research and
development
expenses 9.1 8.3 6.9
Income from operations 3.7 5.5 13.3
Other expense 3.1
Interest expense 3.3 3.8 3.4
Income before income
taxes .4 1.7 6.8
Provision for income
taxes
Net income .4% 1.7% 6.8%
</TABLE>
Fiscal 1995 Compared to Fiscal 1994
Revenues. The Company's revenues for 1995 increased 6% to
$5,532,612 from revenues of $5,217,951 in 1994. The increase
was primarily the result of increased sales of data collection
platforms, sensors and services to agencies of the Federal
government. Sales to agencies of the federal government and
other domestic customers improved to $4,321,000 in 1995 from
$3,597,000, an increase of $724,000. Revenues from contracts
with the Air Force for FMQ-13 wind sensors, spares and repairs
decreased to $455,000 in 1995 from $463,000 in 1994, a decrease
of $8,000. Revenues from international contracts and projects
declined to $757,000 in 1995 from $1,158,000 in 1994, a
decrease of $401,000. The Company's largest customer in each
of 1995 and 1994 was the Department of the Interior, which
accounted for 56% and 35% of revenues, respectively.
Gross Profit. Gross profit for 1995 increased 4% to $2,011,010
from $1,939,137 in 1994. Gross margin as a percentage of
revenues for 1995 decreased to 36.3% as compared to 37.2% in
1994. The decrease in the Company's gross margin as a
percentage of sales was attributed to an increase in direct
material costs primarily associated with data collection
platforms, higher contract costs than anticipated and
competitive pricing pressure. Although there can be no
assurance that Sutron can improve its current gross margin,
management negotiated a new General Services Administration
contract, effective December 1, 1995, resulting in price
increases on many products. There had been no previous price
increases on the contract since June 1992. Revenues from the
General Services Administration contract represented
approximately 59% and 43% of revenues in 1995 and 1994,
respectively.
Selling, General and Administrative. Selling, general and
administrative expenses increased 9% to $1,298,411 in 1995 from
$1,221,041 in 1994. Selling, general and administrative
expenses as a percentage of revenues increased to 23.5% in 1995
from 23.4% in 1994. The increase of $77,370 in 1995 over 1994
was primarily due to increased selling costs as a result of
adding a new direct salesperson and the development and
printing of a new product catalog. The new salesperson is
responsible for an eleven state territory in the Pacific
northwest and allows for expanded coverage of customers in that
region. The new product catalog covers the years 1995 to 1996
and provides the Company with a significant sales and marketing
tool not previously available. The Company has been
proactively engaged in expanding its sales and marketing
activities in an effort to increase its customer base and to
improve its market share.
Research and Development. Research and development expenses
increased 17% to $505,956 in 1995 from $434,300 in 1994.
Research and development expenses as a percentage of revenues
increased to 9.1% in 1995 from 8.3% in 1994. The increase of
$71,656 in 1995 over 1994 was primarily due to a new
development engineer being employed for a full year in 1995 as
compared with eight months in 1994 and reduced assistance by
development engineeers on contract work. The increase in
expenditures was associated with projects to modify and enhance
existing products and to meet new product development
schedules. The Company continues to focus on expanding its
product line of data recorders/transmitters, sensors and data
management software and reducing product development cycles.
Net Interest Expense. Interest expenses for 1995 decreased to
$185,639 from $195,677 in 1994. This decrease is attributed to
a reduced interest rate on bank borrowings from prime plus
three percent to prime plus two percent and reduced borrowings.
Fiscal 1994 Compared to Fiscal 1993
Revenues. The Company's revenues for 1994 decreased 12% to
$5,217,951 from revenues of $5,905,682 in 1993. The decrease
was attributed to decreased revenues from the Company's
contracts with the Air Force for FMQ-13 wind sensors, spares
and repairs and to decreased international sales. Revenues
from contracts with the Air Force for FMQ-13 wind sensors,
spares and repairs declined to $463,000 in 1994 from $1,338,000
in 1993, a decrease of $875,000. Revenues from international
contracts and projects declined to $1,158,000 in 1994 from
$1,586,000 in 1993, a decrease of $428,000. Sales to agencies
of the federal government and other domestic customers of data
collection platforms, sensors and services improved to
$3,597,000 from $2,982,000 in 1993, an increase of $615,000.
Gross Profit. Gross profit for 1994 decreased 19% to
$1,939,137 from $2,381,216 in 1993. Gross margin as a
percentage of revenues for 1994 decreased to 37.2% as compared
to 40.3% in 1993. The decrease in the Company's gross margin
as a percentage of sales was a result of reduced absorption of
fixed costs due to decreased shipment levels and a result of
higher contract costs than anticipated.
Selling, General and Administrative. Selling, general and
administrative expenses increased 3% to $1,221,041 in 1994 from
$1,184,955 in 1993. Selling, general and administrative
expenses as a percentage of net sales increased to 23.4% in
1994 from 20.1% in 1993. The increase of $36,086 in 1994 over
1993 was primarily due to a new direct salesperson being
employed for a full year in 1994 as compared with six months in
1993.
Research and Development. Research and development expenses
increased 6% to $434,300 in 1994 from $409,751 in 1993.
Research and development expenses as a percentage of revenues
increased to 8.3% in 1994 from 6.9% in 1993. The increase of
$24,549 in 1994 over 1993 was associated with projects to
develop a new digital data recorder, to reengineer an existing
data recorder and to develop new data management software.
Other Expense. Other expenses in 1993 included a charge
against earnings of $183,400 representing the Company's write-
down in the value of land held for sale.
Net Interest Expense. Interest expenses for 1994 decreased to
$195,677 from $199,367 in 1993. Interest expenses did not
decrease significantly due to higher interest rates and
increased borrowings on the line of credit.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1995, the Company had working capital of
$784,071 compared to working capital of $963,220 at January 1,
1995. Cash and cash equivalents at December 31, 1995 were
$49,889 compared to $90,516 at January 1, 1995. In 1995, the
Company's major use of cash was for payments on bank notes
payable.
In August 1994, the Company restructured its term note with the
bank. Principal payments of $40,000 under the agreement were
suspended in August, 1994 and were resumed in February, 1995 in
the amount of $25,000 per month for 45 months and 1 final
payment on July 15, 1998 for the remaining unpaid balance. The
current portion of the term note at December 31, 1995 was
$300,000 and the long term portion was $466,222.
Borrowings on the Company's revolving credit facility, which
has a maximum limit of $1,000,000, are subject to a defined
borrowing base composed primarily of certain accounts
receivables and unbilled receivables. Borrowings outstanding
against the revolving credit facility as of December 31, 1995
were $735,000. The revolving credit facility expires on April
30, 1996. The Company believes the credit facility will be
extended on the renewal date.
The term note and the credit facility bear interest at prime
plus two percent. The credit facility and the term note are
secured by accounts receivable, inventory, and equipment. The
agreements contain restrictive covenants pertaining to the
maintenance of tangible net worth and operating cash flows and
limiting capital expenditures, acquisitions by the Company of
its own stock and other matters. The agreements also restrict
the payment of dividends.
Management believes that its working capital, cash flows from
operations, and credit facilities will provide adequate
resources to finance the current needs of the Company's
operations and to satisfy its anticipated cash requirement for
more than twelve months. In addition, Sutron will continue to
consider and review other financing arrangements which could be
used to reduce the outstanding balance of both current and long
term debt.
Independent Accountants Report
To the Board of Directors and Stockholders
Sutron Corporation
Sterling, Virginia
We have audited the accompanying balance sheets of Sutron
Corporation as of December 31, 1995 and 1994, and the related
statements of operations, stockholders' equity, and cash flows
for the years ended December 31, 1995, 1994 and 1993. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Sutron Corporation as of December 31, 1995 and
1994, and the results of its operations and its cash flows for
the years ended December 31, 1995, 1994 and 1993 in conformity
with generally accepted accounting principles.
Thompson, Greenspon & Co.
Fairfax, Virginia
March 8, 1996
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
SUTRON CORPORATION
BALANCE SHEETS
<CAPTION>
(Unaudited)
December 31, December 31,
1995 1994
___________ ___________
<S> <C> <C>
Assets
Current Assets:
Cash $ 49,889 $ 90,516
Accounts receivables 1,498,737 1,222,004
Unbilled Contract receivables 36,130 61,284
Cost and estimated earnings
in excess of billings 366,230 457,832
Inventory 952,371 1,048,460
Prepaid and other 57,141 25,736
_________ _________
Total Current Asset 2,960,498 2,905,832
Property, Plant, and Equipment,
Furniture and Fixtures 1,382,161 1,374,853
Automative equipment 44,974 13,785
Leasehold improvements 9,264 9,264
_________ _________
1,436,399 1,397,902
Accumulated deprectiation (1,221,504) (1,133,575)
_________ _________
Net property, plant and
equipment 214,895 264,327
Investment 493,118 493,118
Other Assets 63,134 56,977
___________ ___________
TOTAL ASSETS $ 3,731,645 $ 3,720,254
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable $ 589,010 $ 560,660
Accrued payroll 35,187 33,683
Accrued expenses 218,563 212,304
Contract billings on contracts in
progress in excess of costs and
estimated earnings 192,273 0
Estimated losses on
uncompleted contracts 10,893 6,965
Current maturities:
Line of credit 735,000 654,000
Installment notes payable 5,501 0
Term notes payable 300,000 375,000
Shareholder loans payable 90,000 100,000
___________ ___________
Total Current Liabilities 1,942,612 1,942,612
Long-term liabilities:
Installment notes payable 22,972 0
Term notes payable 466,222 766,222
___________ ___________
Total liabilities 2,665,621 2,708,834
Stockholders' Equity:
Common stock, $.01 par value,
12,000,000 shares authorized;
4,225,851 shares issued and
outstanding in 1995,
3,957,051 shares issued and
outstanding in 1994 43,540 40,852
Additional paid in capital 2,281,585 2,250,673
Accumulated Deficit (1,259,101) (1,280,105)
_____________ ___________
Total Stockholders' Equity 1,066,024 1,011,420
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 3,731,645 $ 3,720,254
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF OPERATIONS
<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Revenue $5,532,612 $5,217,951 $ 5,905,682
Cost of Goods Sold 3,521,602 3,278,814 3,524,466
Gross Profit 2,011,010 1,939,137 2,381,216
Research and Development
Expenses 505,956 434,300 409,751
Selling, General, and
Administrative
Expenses 1,298,411 1,221,041 1,184,955
Operating Income 206,643 283,796 786,510
Other Expense, net 0 0 183,994
Financial Expense, net,
includinginterest expense
of $188,250 in 1995,
$197,717 in 1994, and
$200,572 in 1993 185,639 195,677 199,367
Income before _______________________________
Income Taxes 21,004 88,119 403,149
Income Tax 0 1,000 0
Net Income $21,004 $87,119 $403,149
Net Income per
Common Share $.01 $.02 $.10
Weighted Average Number
of Common Shares 4,018,375 3,927,676 3,918,300
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
<CAPTION>
COMMON PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
<S> <C> <C> <C> <C>
Balances,
December 31, 1992 3,863,051 $39,912 $2,239,863 $(1,770,373)
Exercise of Stock
Options 59,000 590 6,785 -
Net Income for
1993 - - - 403,149
Balances,
December 31, 1993 3,922,051 40,502 2,246,648 (1,367,224)
Exercise of Stock
Options 35,000 350 4,025 -
Net Income for
1994 - - - 87,119
Balances,
December 31, 1994 3,957,051 40,852 2,250,673 (1,280,105)
Exercise of Stock
Options 268,800 2,688 30,912 -
Net Income for 1995 - - - 21,004
Balances,
December 31, 1995 4,225,851 $43,540 $2,281,585 $(1,259,101)
<FN> See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF CASH FLOWS <CAPTION> Year Ended December 31,
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income $21,004 $87,119 $403,149
Noncash items included in
net income
Depreciation and
amortization 102,369 82,813 80,709
Valuation allowance, land
held for sale - - 183,400
Gain (loss) on sale of
equipment, net (4,478) 42 2,306
(Increase) Decrease in
Accounts receivables (251,579) 445,291 (712,879)
Costs and estimated earnings
in excess of contract billings
on contracts in progress 91,602 72,115 (158,901)
Inventory 96,089 144,357 (178,799)
Prepaid items and other (31,405) (11,068) 10,284
Other assets - (475) -
Increase (Decrease) in
Accounts payable 28,350 (154,450) 557,452
Accrued expenses 7,763 (85,766) 10,259
Contract billings on
contracts in progress
in excess of costs and
estimated earnings 192,273
Estimated losses on
uncompleted contracts 3,928 (47,768) (152,459)
Net Cash Provided by
Operating Activities 255,916 532,210 44,521
Cash Flows from Investing
Activities
Purchase of property and
equipment (10,157) (66,105) (151,050)
Capitalized software
costs (13,270) (47,700) -
Net Cash used by
Investing Activities (23,427) (113,805) (151,050)
Cash Flows from Financing
Activities
Proceeds from issuance of
common stock 33,600 4,375 7,375
Proceeds from sale of
property and equipment - 2,701 -
Proceeds from line of
credit, net 81,000 - 675,000
Payments on line of
credit, net - (321,000) -
Payments on term notes
payable (375,000) (300,000) (720,000)
Advance on term notes
payable - 100,000 -
Payments on installment
notes payable (2,716) - -
Payments on stockholder
loans payable (10,000) - -
Proceeds from stockholder
loans payable 100,000 -
Net Cash Used by
Financing Activities (273,116) (413,924) (37,625)
Net Increase (Decrease)
in Cash and Cash
Equivalents (40,627) 4,481 (144,154)
Cash and Cash Equivalents,
beginning of year 90,516 86,035 230,189
Cash and Cash Equivalents,
end of year $49,889 $90,516 $86,035
Schedule of Noncash
Investing and Financing
Activities
Purchase of equipment
through issuance of
installment ntoes payable $ 31,189 $ - $ -
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
SUTRON CORPORATION
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business: Sutron Corporation ("the Company") was incorporated
on December 30, 1975 under the General Laws of the Commonwealth
of Virginia. The Company designs and manufactures
environmental monitoring and control systems for use by
government agencies and industry. The Company's products
include sensors, data collection platforms and remote terminal
units with telemetry capability and system and application
software. Sutron's customers include a diversified base of
federal, state and foreign government agencies, universities,
the Department of Defense and hydropower companies.
Revenue Recognition: The Company utilizes the accrual method
of accounting for both financial statement and tax return
reporting purposes. Thus, revenue from manufacturing is
recognized when it is earned, and expenses are recognized when
incurred. Selling, general, and administrative expenses are
charged against periodic income. Revenue from cost-plus-fee
contracts is recognized to the extent of costs incurred, plus a
proportionate amount of fees earned. Revenue from fixed-price
contracts is recognized on the percentage-of-completion method
based on costs incurred in relation to total estimated costs.
Revenue from time-and-materials contracts is recognized to the
extent of billable rates, times hours delivered, plus materials
costs incurred. Contract costs include allocated indirect
costs and general and administrative expenses. Anticipated
losses are recognized as soon as they become known.
Cash and Cash Equivalents: For purposes of the statements of
cash flows, cash equivalents include time deposits, and all highly liquid
debt instruments with original maturities of three months or less.
Interest paid amounted to $180,523 in 1995, $193,186 in 1994, and $196,000
in 1993. Income taxes paid amounted to $-0- in 1995, $1,000 in 1994 and
$-0- in 1993.
Accounts Receivables: The Company has had no material bad
debts. Because management considers all accounts to be fully
collectible, no provision has been made for accounts that may
not be collected in future periods. Amounts earned on
completed contracts and receivables that have not yet been
billed, are recorded as unbilled receivables.
Property, Plant, and Equipment: Equipment is recorded at cost
and depreciated over estimated useful lives ranging from 3 to 7
years using the straight-line method for financial statement
purposes and the straight-line and accelerated methods for
income tax purposes. Expenditures for maintenance, repairs,
and improvements which do not materially extend the useful
lives of the assets are charged to earnings. When items of
property, plant, and equipment are disposed of, the cost of the
asset and the related accumulated depreciation are removed from
the accounts. Any gain or loss resulting from the removal from
service is taken into the current period earnings.
Investment: Land held for sale is recorded at lower of cost or
net realizable value, based on management's estimate.
Income Taxes: The Company utilizes an asset and liability
approach to accounting for income taxes. The objective is to
recognize the amount of income taxes payable or refundable in
the current year based on the Company's income tax return and
the deferred tax liabilities and assests for the expected
future tax consequences of events that have been recognized in
the Company's financial statements or tax returns.
The asset and liability method accounts for deferred income
taxes by applying enacted statutory rates to temporary
differences, the difference between financial statement amounts
and tax bases of assets and liabilities. The resulting
deferred tax liabilities or assets are classified as current or
noncurrent based on the classification of the related asset or
liability. Deferred income tax liabilities or assets are
adjusted to reflect changes in tax laws or rates in the year of
enactment.
Earnings Per Share: Earnings per average common share is
computed using the weighted average number of common shares
outstanding during the periods. Fully-diluted earnings per
share is the same as earnings per average common share because
there are no outstanding warrants at December 31, 1995, 1994,
and 1993; and conversion of outstanding stock options at these
dates, would have been anti-dilutive.
Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could
vary from the estimates that were used.
(2) CONTRACTS IN PROGRESS
Information with respect to contracts in progress at December
31, is as follows:
1995 1994
Direct and indirect
costs, including overhead $12,376,952 $12,004,024
Estimated losses, net (1,911,754) (1,522,642)
Total $10,465,198 $10,481,382
Billings $10,109,861 $10,030,515
Costs and estimated
earnings in excess of
billings 366,230 457,832
Estimated losses on
contracts in process (10,893) (6,965)
Total $10,465,198 $10,481,382
(3) INVENTORY
Inventory is stated at the lower of cost or market. Electronic
components costs are based on the weighted average method.
Work in process and finished goods costs consist of materials,
labor and overhead and are recorded at a standard cost.
Inventory consists of the following at December 31:
1995 1994
Electronic components $408,035 $436,366
Work in process 426,996 478,091
Finished goods 117,340 134,003
$952,371 $1,048,460
(4) ADVERTISING
In 1995, the Company developed and produced a 1995-1996 product
catalog to advertise its environmental monitoring instruments
and systems. The Company, per Statement of Position 93-7,
Reporting on Advertising Costs, is able to capitalize the
$102,000 cost of the catalog. Costs of the catalog consist of
iprinting costs, incremental direct costs and payroll and
payroll related costs for individuals who devoted their time to
the catalog. The costs are included in Prepaid Items and Other
and being charged to income over the expected benefit periods
of 1995 and 1996. Advertising costs of $40,800 have been
charged to income in 1995, with a net remaining asset of
$61,200 available as of December 31, 1995.
(5) ACCUMULATED DEPRECIATION AND AMORTIZATION
Accumulated depreciation and amortization at December 31, is as
follows:
1995 1994
Furniture and equipment $1,199,007 $1,116,965
Automotive equipment 17,817 13,785
Leasehold improvements 4,678 2,825
$1,221,504 $1,133,575
(6) INVESTMENT
Land, including related improvements and architectural fees,
which was originally acquired as a future plant site, is now
being held for sale. The total amount presented as investment
consists of land and building design fees of $1,300,311 net of
a valuation allowance of $807,192 in 1995 and 1994.
(7) LINE OF CREDIT
The Company signed a loan and security agreement dated December
11, 1992, with its bank which extends the Company a revolving
line of credit. The maximum amount of borrowing under the line
is not to exceed the lesser of $1,000,000 or the Company's
borrowing base as determined by the bank. Interest on the
unpaid balance is payable monthly at prime plus two percent.
The maturity date of the line is April 30, 1996, and the
outstanding balance at December 31, 1995 amounted to $735,000
and $654,000 in 1994.
(8) TERM NOTE PAYABLE
Under the above referenced loan and security agreement, the
Company was also extended a term note payable with a principal
amount of $2,121,222. Management and the bank agreed to
restructure the term note in August, 1994. Principal payments
of $40,000 under the agreement were suspended in August, 1994
and were resumed in February, 1995 in the amount of $25,000 per
month for 45 months and 1 final payment on July 15, 1998 for
the remaining unpaid balance. Interest on the unpaid balance
is payable monthly at prime plus two percent. The
restructuring allows the Company to defer a portion of its
current debt burden over a longer term. Additional principal
payments may be due under the agreement if the Company reaches
specified cash flow levels described by the bank.
The above referenced line of credit and term note payable are
secured by substantially all assets of the Company.
Additionally, the loan agreement contains certain restrictive
financial covenants. As of December 31, 1995, the Company was
in violation of certain equity covenants. The bank has waived
compliance. Principal maturities for all indebtedness
described in Notes 7 and 8 are as follows at December 31:
Year ending December 31: 1995 1994
1995 $ -- $1,029,000
1996 1,035,000 300,000
1997 300,000 300,000
1998 166,222 166,222
$1,501,222 $1,795,222
(9) STOCKHOLDER LOANS PAYABLE
At December 31, 1995 the Company had promissory notes totaling
$90,000 payable on demand to three officers of the Company.
The promissory notes are expected to be repaid in 1996 with
interest at 10.75 percent.
(10) LEASE OBLIGATIONS
The Company entered into a lease on October 23, 1992 for its
headquarters and production facilities. The 5.5-year operating
lease calls for monthly rent of $12,021, including $3,090
estimated as the Company's pro rata share of operating
expenses, and annual rent increases of 3%. Rent expense
amounted to $151,125 for 1995, $134,000 for 1994 and $124,000
for 1993. The following is a schedule, by years, of future
payments due:
Year ending December 31: 1995 1994
1995 $0 $132,372
1996 135,517 135,517
1997 138,756 138,756
1998 35,310 35,310
$309,583 $441,955
(11) INCOME TAXES
The provision for income taxes charged to continuing operations
for the years ended December 31, was as follows:
1995 1994 1993
Current income taxes $ $1,000 $0
Deferred tax expense 0 0 0
Total tax expense $0 $1,000 $0
Deferred tax assets, net of tax effect, are comprised of the
following at December 31:
1995 1994
Net operating loss carry forward $ 123,000 $140,000
Investment 307,000 307,000
Estimated losses on contracts 4,000 2,000
Accrued vacation 29,000 5,000
Gross deferred tax assets 463,000 454,000
Depreciation (25,000) (24,000)
Gross deferred tax liability (25,000) (24,000)
Deferred tax asset valuation
allowance (438,000) (430,000)
Net deferred tax asset
At December 31, 1995, the Company had net operating loss
carryforward of $325,000 and general business credits of
$31,000, both will expire in 2004.
A reconciliation between the amount of reported income tax
expense and the amount computed by multiplying the applicable
statutory Federal income tax rate is as follows:
1995 1994 1993
Income before income taxes $21,005 $87,119 $403,149
Applicable statutory income
tax rate 34% 34% 34%
Computed "expected" Federal
tax expenses 7,000 30,000 137,000
Adjustments to Federal income
tax resulting from:
State income tax 1,000 6,000 19,000
Alternative minimum tax
Change in valuation allowance (8,000) (35,000) (156,000)
Provision for Income Taxes $ $ 1,000 $
(12) MAJOR CUSTOMERS
Set forth below are customers, including agencies of the U. S.
Government, from which the Company received more than 10
percent of total revenue, for the years ended December 31:
1995 1994 1993
Domestic:
Department of Defense 9% 10% 24%
Department of Interior 56% 35% 25%
Army Corp. of Engineer's 9% 15% 14%
International 14% 22% 27%
(13) STOCK BONUS AND STOCK OPTION PLANS
Stock Bonus Plan: A Company stock bonus plan rewards Company
employees rendering extraordinary services to the Company.
These shares are subject to restrictions upon transfer for
periods of time varying from a few months for grants of 25 or
fewer shares to four to ten years for larger grants. The
Company has a thirty-day option to purchase the restricted shares on the
employee's termination at a price equal to 50 percent of the market
value on the termination date.
Incentive Stock Option Plan: Under the terms of a stock option
plan, as amended by the stockholders in 1985, employees may be
granted stock options to purchase up to an aggregate of 35,000
shares of the Company's common stock. The option price per
share is determined by the Board of Directors but shall be no
less than the fair market value on the date of the grant. Each
option is exercisable within the period and in the increments
as determined by the Board of Directors. No options were
exercised as of December 31, 1995 and 1994, under the Stock
Bonus Plan or the Incentive Stock Option Plan.
Stock Option Agreement: The Company has granted stock options
to key employees and directors for valuable services to the
Company. The options are not granted under the Company's
Incentive Stock Option Plan or Stock Bonus Plan. The following
summarizes the option activity under the agreements for the
last three years:
Number of Shares Option Price
Per Share
Outstanding, December 31, 1992 385,000 $.125
Grants 117,500 .53
Exercised (59,000) .125
Canceled or expired
Outstanding, December 31, 1993 443,500 .125 - .53
Grants
Exercised (35,000) .125
Canceled or expired
Outstanding, December 31, 1994 408,500 .125 - .53
Grants
Exercised (268,800) .125
Canceled or expired (22,200) .125
Outstanding, December 31, 1995 117,500 $.53
The vesting period of the remaining options is as follows:
December 6, 1996 23,500
December 6, 1997 23,500
47,000
(14) PROFIT SHARING PLAN
The 401(k) Profit Sharing plan covers substantially all full
time employees. The contributions, if any, to the plan will be
determined each year by the Board of Directors based on
profits. The contribution was $-0- for 1995 and 1994 and
$85,000 for 1993.
(15) EXPORT SALES
Export Sales from the Company's operations were as follows:
(In thousands) 1995 1994 1993
Asia $108 $671 $348
South America 480 186 471
Australia 9 15 96
Mexico 1 69 417
Other 160 217 255
$758 $1,158 $1,587
<PAGE>
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None
PART III
Information required by Item 10 - Executive Compensation, Item
11 - Security Ownership of Certain Beneficial Owners and
Management and Item 12 - Certain Relationships and Related
Transactions and certain information required by Item 9 -
Directors, Executive Officers, Promoters and Control Persons
will be contained on pages 2 through 8 of the registrant's
definitive proxy statement to be filed on April 10, 1996 and is
incorporated herein by reference.
Item 9. Directors, Executive Officers, Promoters and Control
Persons
Executive Officers
The following tabulation sets forth the names of the executive
officers at December 31, 1995, the positions and offices with
the Company held by them, the date they first became officers,
and their ages at December 31, 1995:
First
Became
Name Office an Officer Age
Raul S. McQuivey President, Chief Executive 1980 56
Officer and Chairman
Thomas N. Keefer Vice President and a Director 1981 51
Daniel W. Farrell Vice President, Secretary 1984 43
and a Director
Glenn A. Conover Vice President and a Director 1985 56
Sidney C. Hooper Treasurer 1993 37
Item 13. Exhibits and Reports on Form 8-K.
(A) Index to Exhibits
Exhibit No. Description
3(a) Copy of Articles of Incorporation of Sutron Corporation,
received and approved December 30, 1975 (1)
3(b) Copy of Articles of Amendment to the Articles of
Incorporation and Articles of Reduction of Stated
Capital of Sutron Corporation received and approved
September 7, 1983(1)
3(c) By-laws of the Registrant(1)
3(d) Copy of Articles of Amendment to the Articles of
Incorporation received and approved June 8, 1995(10)
4(a) Specimen Shares of Common Stock Certificate(2)
4(b) Form of Warrant to be issued as part of Unit (2)
4(c) Amended Form of Warrant issued as part of Unit(3)
4(d) Incentive Stock Option Plan dated August 31, 1983(1)
4(e) Stock Bonus Plan dated August 31, 1983(1)
4(f) Loan and Security Agreement, dated December 11, 1992
between the Company and Crestar Bank (8)
10(a) Employment Agreement dated as of July 1, 1983 with
Kenneth W. Whitt(1)
10(b) Employment Agreement dated as of July 1, 1983 with
Dr.
Raul S. McQuivey(1)
10(c) Employment Agreement dated as of July 1, 1983 with
Dr.
Thomas N. Keefer(1)
10(d) Employment Agreement dated as of July 1, 1983 with
Duane
M. Preble(1)
10(e) Purchase Agreement dated as of July 1, 1983 with Eric
S.
Clyde(1)
10(f) Stock Option Agreement between Registrant and Gerald
Calhoun dated July 1, 1983(1)
10(g) Certified Copy of Resolution of Commissioners of
Fairfax
County Economic Development Authority, adopted October 12,
1982, approving $425,000 Industrial revenue bond loan
to registrant(1)
10(h) Certified Copy of Resolution of Commissioners of
Fairfax County Economic Development Authority, adopted
March 8, 1983, approving $400,000 industrial revenue
bond loan to registrant (1)
10(i) Certified Copy of Resolution of Board of Supervisors
of Fairfax County, adopted March 21, 1983, approving
issuance of industrial revenue bonds for purpose of
$400,000 loan to Registrant(1)
10(j) License agreement dated January 29, 1987, with TSUKASA
SOKKEN Co., Ltd. of Japan, to use U.S. Patent No.
3,677,085 (4)
10(k) License agreement dated November 10, 1986, with S.A.
Des Caliberies et Trefileries de Cossonay of
Switzerland, to use U.S. Patent No. 4,279,147 and
Canada Patent No. 1,120,286 (4)
10(l) Lease agreement dated September 18, 1987, with Squire
Court Limited Partnership to lease building space
(9,000 sq. ft.) (4)
10(m) Copy of termination agreement with Duane Preble dated April 1, 1988 (5)
10(n) Sale agreement with National Hospital Health System
Corporation, dated November 29, 1989, and subsequent
amendments dated December 29, 1989, February 28, 1990,
and March 27, 1990, to sell land and building in
Herndon, Virginia (6)
10(o) Lease agreement dated May 9, 1990 with National
Hospital Health SystemCorporation to lease building
space (5545 sq.ft.) (7)
10(p) Stock Option Agreement between Sutron Corporation and
Glenn A. Conover dated October 15, 1990 (7)
10(q) Stock Option Agreement between Sutron Corporation and
Daniel W. Farrell dated October 15, 1990 (7)
10(r) Lease agreement dated July 30, 1992 with Loudoun
Holding Inc. to lease building space (16,794 sq. ft.)
(8)
10(s) Stock Option Agreement between Sutron Corporation and
Ronald C. Dodson dated December 6, 1993 (9)
(1) Filed as Exhibits to Registrant's Registration Statement
on Form S-18 (File No. 2-86573-W) dated September 16, 1983, and
incorporated herein by reference.
(2) Filed as Exhibits to Amendment No. 1 to Registrant's
Registration Statement on Form S-18 (File No. 2-86573-W) dated
October 26, 2983, and incorporated herein by reference.
(3) Filed as Exhibits to Amendment No. 2 to Registrant's
Registration Statement on form S-18 (File No. 2-896573-W) dated
November 4, 1983 and incorporated herein by reference.
(4) Filed as Exhibits to Registrant's Annual Report on Form
10-K for the year ended December 31, 1987, and incorporated
herein by reference.
(5) Filed as Exhibit on Form 8-K dated April 1, 1990, and
incorporated herein by reference.
(6) Filed as Exhibits to Registrant's Annual Report on Form
10-K for the year ended December 31, 1989, and incorporated
herein by reference.
(7) Filed as Exhibits to Registrant's Annual Report on Form
10-K for the year ended December 31, 1990 and incorporated
herein by reference.
(8) Filed as Exhibits to Registrants Annual Report on Form 10-
KSB for the year ended December 31, 1992 and incorporated
herein by reference.
(9) Filed as Exhibits to Registrants Annual Report on Form 10-
KSB for the year ended December 31, 1993 and incorporated
herein by reference.
(10) Filed as Exhibits to Registrants Annual Report on Form
10-KSB for the year ended December 31, 1995 and incorporated
herein by reference.
(B) Reports on Form 8-K
The registrant did not file any reports on Form 8-K during
the fourth quarter of the fiscal year ended December 31, 1995.
<PAGE>
SUTRON CORPORATION
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Sutron Corporation
(Registrant)
Date: April 1, 1996 By /s/ Raul S. McQuivey
Raul S. McQuviey, President
and Director (Principal
Executive and Financial
Officer)
In accordance with the Securities Exchange Act, this report has
been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date: April 1, 1996 By /s/ Raul S. McQuivey
Raul S. McQuivey, President
and Chairman
Date: April 1, 1996 By /s/ Thomas N. Keefer
Thomas N. Keefer, Vice
President and Director
Date: April 1, 1996 By /s/ Daniel W. Farrell
Daniel W. Farrell, Vice
President and Director
Date: April 1, 1996 By /s/ Glenn A. Conover
Glenn A. Conover, Vice
President and Director
Date: April 1, 1996 By /s/ Ronald C. Dodson
Ronald C. Dodson
Date: April 1, 1996 By /s/ Sidney C, Hooper
Sidney C. Hooper
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Article 5 Fin. Data Schedule for fiscal ended DEC-31-95
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 49889
<SECURITIES> 0
<RECEIVABLES> 1498737
<ALLOWANCES> 0
<INVENTORY> 952371
<CURRENT-ASSETS> 2960498
<PP&E> 1436399
<DEPRECIATION> 1221504
<TOTAL-ASSETS> 3731645
<CURRENT-LIABILITIES> 2176427
<BONDS> 0
<COMMON> 43540
0
0
<OTHER-SE> 1022484
<TOTAL-LIABILITY-AND-EQUITY> 3731645
<SALES> 5532612
<TOTAL-REVENUES> 5532612
<CGS> 3521612
<TOTAL-COSTS> 3521612
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 185639
<INCOME-PRETAX> 21004
<INCOME-TAX> 0
<INCOME-CONTINUING> 21004
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21004
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
