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, 1997
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
$9,940,555.
The aggregate market value of the voting stock held by non-
affiliates as of March 27, 1998 was approximately $2,789,500
based on the average bid and asked prices of such stock.
The number of shares outstanding of the issuer's
Common Stock, $.01 par value, as of March 27, 1998 was 4,225,851.
Documents Incorporated by Reference
Portions of the registrant's definitive proxy statement dated April 10 1998
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 Hydromet 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 Hydromet 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 in 1996 and for repairs of older units in
1997 with final delivery and acceptance of these items
anticipated in 1998.
Accubar Gauge Pressure Sensor
The Accubar Gauge Pressure sensor is a highly accurate solid state
pressure transducer capable of measuring air/dry gas pressures
from 0 to 22 psi with a maximum pressure of 35 psi. It is housed
in an aluminum case and with its low power consumption and low
maintenance requirements, it is ideal for remote monitoring
applications.
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, 1997, the Company employed eight salaried sales and
marketing personnel, including four engaged directly in field
sales activities, and four in various other marketing and sales
support functions. Internationally, the Company utilizes
sales agents to market its products and services.
Customers
During 1997, approximately 71% of the Company's products and
services were sold to the Federal Government. Revenues in 1997
among the various agencies were as follows: U.S. Army Corps of Engineers, 7%;
Department of Defense, 4%; Department of the Interior, 57%; and
various other agencies of the federal government, 3%. 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) agencies, the U.S. Geological Survey
and the Bureau of Reclamation. See Note 11
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 1997, 35% of total
revenues in 1996, and approximately 14% in 1995. 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, 1997, 1996, and 1995,
Sutron's internally funded research and development costs were $805,027,
$547,617, and $505,953 respectively. The Company initiated five major
development efforts in 1997 and completed two consisting of certain major
enhancements to the 8400 DDR and a temperature pressure engine.
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, 1997 was
$1,828,942 as compared with $3,733,466 at December 31, 1996
and $1,390,682 at December 31, 1995. The Company
anticipates that 95% of its 1997 year-end backlog will be
shipped in 1998.
Employees
The Company had a total of 60 employees as of December 31,
1997 of which 56 were full time.
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. An option for an additional five
years was exercised in 1997.
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 1997 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 1997 and 1996 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>
1997 1996
Quarter HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
First Quarter 1 5/8 1 1/4 3/8 5/16
Second Quarter 1 7/16 1 3/16 11/16 5/16
Third Quarter 1 7/8 1 5/16 1 3/16 5/8
Fourth Quarter 1 7/8 1 3/8 1 7/16 1 1/8
</TABLE>
(b) Approximate Number of Equity Shareholders:
Title of Class: Common Stock, $.01 par value
Approximate Number of Record Holders At March 27, 1998: 335
(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
1997 1996 1995
<S> <C> <C> <C>
Revenues 100.0% 100.0% 100.0%
Cost of sales 63.9 60.0 63.7
Gross profit 36.1 40.0 36.3
Selling, general and administrative expenses 19.1 21.3 23.5
Research and development expenses 8.1 6.3 9.1
Income from operations 8.9 12.4 3.7
Interest expense 1.3 1.9 3.3
Income before income taxes 7.6 10.5 .4
Provision for income taxes 2.4 1.6
Net income 5.2% 8.9% .4%
</TABLE>
Fiscal 1997 Compared to Fiscal 1996
Revenues. The Company's revenues for 1997 increased 14% to
$9,940,555 from revenues of $8,689,068 in 1996. Sales to
agencies of the federal government and other domestic
customers improved to $8,158,000 in 1997 from $5,160,000,
an increase of $2,998,000 due to increased sales of the
8400 Digital Data Recorder and the 8210 Data
Recorder/Transmitter. Revenues from international
contracts and projects decreased to $1,366,000 in 1997 from
$3,014,000 in 1996, a decrease of $1,648,000. The international
business is project driven and the Company did not win any
significant international contracts in 1997 as compared with the
prior year. Revenues from contracts with the Air Force for
FMQ-13 wind sensors, spares and repairs decreased to $417,000
in 1997 from $515,000 in 1996, a decrease of $98,000. The
Company's largest customer in each of 1997 and 1996 was the
Department of the Interior, which accounted for 57% and 39%
of revenues, respectively.
Gross Profit. Gross profit for 1997 increased 3% to $3,588,169
from $3,473,050 in 1996. Gross margin as a percentage of
revenues for 1997 decreased to 36.1% as compared to 40.0%
in 1996. The decrease in the Company's gross margin as a
percentage of sales was due to installation problems on a
foreign contract resulting in costs in excess of revenue of
$100,000 and test problems on the McClellan repair contract
resulting in costs in excess of revenue of $120,000.
Selling, General and Administrative. Selling, general and
administrative expenses increased 3% to $1,902,746 in 1997
from $1,850,899 in 1996. Selling, general and administrative
expenses as a percentage of revenues decreased to 19.1% in
1997 from 21.3% in 1996 due to the increase in sales volume.
The increase of $51,847 in 1997 over 1996 was primarily due
to increased international sales activities and increased
marketing efforts. The Company hired a new international
sales manager in June 1996 and a new marketing manager
in November 1996.
Research and Development. Research and development
expenses increased 47% to $805,027 in 1997 from $547,617
in 1996, an increase of $257,410. Research and development
expenses as a percentage of revenues increased to 8.1% in
1997 from 6.3% in 1996. The Company is focused on
expanding its product line of data recorders/transmitters,
sensors and data management software. The Company is
currently developing four new products which are expected
to be available in 1998. The Company supplemented its
engineering staff significantly in 1997 through the use of
subcontractors.
Net Interest Expense. Interest expenses for 1997 decreased
to $126,731 from $162,848 in 1996, a decrease of $36,117.
The decrease is attributed to reduced borrowings as a result
of the Company's profits in 1997 and 1996.
Fiscal 1996 Compared to Fiscal 1995
Revenues. The Company's revenues for 1996 increased 57% to
$8,689,068 from revenues of $5,532,612 in 1995. The increase
was primarily the result of sales of two products released in late 1995,
the digital data recorder (DDR) and the 8210 Data Recorder/Transmitter,
and increased international systems sales. Revenues from international
contracts and projects increased to $3,014,000 in 1996 from $757,000 in
1995, an increase of $2,257,000. Sales to agencies of the federal government
and other domestic customers improved to $5,160,000 in 1996 from
$4,321,000, an increase of $839,000. Revenues from contracts
with the Air Force for FMQ-13 wind sensors, spares and repairs
decreased to $515,000 in 1996 from $455,000 in 1995, an increase
of $50,000. The Company's largest customer in each
of 1996 and 1995 was the Department of the Interior, which
accounted for 39% and 56% of revenues, respectively.
Gross Profit. Gross profit for 1996 increased 73% to $3,473,050
from $2,011,010 in 1995. Gross margin as a percentage of
revenues for 1996 increased to 40.0% as compared to 36.3% in
1995. The increase in the Company's gross margin as a
percentage of sales was attributed to the increase in sales volume.
Selling, General and Administrative. Selling, general and
administrative expenses increased 43% to $1,850,899 in 1996 from
$1,298,411 in 1995. Selling, general and administrative
expenses as a percentage of revenues decreased to 21.3% in 1996
from 23.5% in 1995 due to the increase in sales volume.
The increase of $552,488 in 1996 over 1995
was primarily due to increased international commissions,
the addition of a new international sales manager in June 1996, and
increased sales and marketing activities. 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 8% to $547,617 in 1996 from $505,956 in 1995.
Research and development expenses as a percentage of revenues
decreased to 6.3% in 1996 from 9.1% in 1995. The increase of
$41,661 in 1996 over 1995 was primarily due to increased
product development activities. 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 1996 decreased to
$162,848 from $185,639 in 1995. This decrease is attributed to
reduced borrowings.
LIQUIDITY AND CAPITAL RESOURCES
Sutron's balance sheet grew stronger in 1997 as the Company
generated $733,004 in cash from operating activities. Cash
and cash equivalents increased to $168,548 at December 31, 1997,
compared to $78,970 at December 31, 1996. Working
capital increased $442,766 to $1,734,127 at the end 1997
compared to $1,291,361 at the end of fiscal 1996. The ratio
of current assets to current liabilities was 1.77 as of
December 31, 1997, compared to 1.46 as of
December 31, 1996.
Adding strength to the Company's financial condition is
the new banking relationship with the First National Bank
of Maryland. Under the terms of the loan and security agreement
dated June 5, 1997, the Company has been provided with a
revolving credit facility of $2,000,000 and a term note of $343,008.
This new credit facility represents a 100% increase in availability
over the previous arrangement. First National Bank of Maryland
is also making available an additional $100,000 for capital
equipment. The term of this new arrangement extends until
June 1, 1998 and is subject to renewals thereafter.
In February 1998, the Corporation entered into a contract to
sell 4.2 acres of land acquired in 1986. The land was originally
intended to be the site of a headquarters and manufacturing
facility. The contract calls for a purchase price of $700,000
and the buyer has a study period and a right to cancel.
Settlement on the property is expected in the third quarter of 1998.
Management believes that internally generated funds,
anticipated proceeds from the sale of our land and short-term
borrowings on our existing credit line will provide adequate
resources for supporting operations during fiscal 1998.
INDEPENDENT AUDITORS' 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, 1997 and 1996, and the related
statements of operations, stockholders' equity (deficit), and cash flows
for each of the three years ended December 31, 1997, 1996 and 1995.
These financial statements are the responsibility of the Corporation'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, 1997 and 1996, and the results of its operations and its
cash flows for each of the three years ended December 31, 1997, 1996 and 1995
in conformity with generally accepted accounting principles.
Thompson, Greenspon & Co.
Fairfax, Virginia
February 20, 1998
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
SUTRON CORPORATION
BALANCE SHEETS
<CAPTION>
(Unaudited)
December 31, December 31,
1997 1996
___________ ___________
<S> <C> <C>
Assets
Current Assets:
Cash $ 168,548 $ 78,970
Accounts receivables 1,804,525 1,195,281
Unbilled Contract receivables -- 15,096
Cost and estimated earnings
in excess of billings 402,523 628,344
Inventory 1,528,802 2,135,231
Prepaid and other 71,670 46,482
_________ _________
Total Current Asset 3,976,068 4,099,404
Property, Plant, and Equipment,
Furniture and Fixtures 1,298,789 1,201,030
Automative equipment 30,849 44,974
Leasehold improvements 9,264 9,264
________ _________
1,338,902 1,255,268
Accumulated deprectiation (1,154,351) (1,072,273)
_________ _________
Net property, plant and
equipment 184,551 182,995
Investment 493,118 493,118
Other Assets 38,746 50,940
Total Other Assests 531,864 544,058
_________ _________
TOTAL ASSETS $ 4,692,483 $ 4,826,457
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable $ 610,568 $ 895,524
Accrued payroll 80,521 60,224
Accrued expenses 415,021 396,841
Contract billings on contracts in
progress in excess of costs and
estimated earnings 169,238 162,702
Estimated losses on
uncompleted contracts 24,902 1,095
Income taxes payable 110,359 --
Current maturities:
Line of credit 573,171 905,000
Installment notes payable 6,657 6,657
Term notes payable 171,504 300,000
Shareholder loans payable 80,000 80,000
___________ ___________
Total Current Liabilities 2,241,941 2,808,043
Long-term liabilities:
Installment notes payable 253 16,411
Term notes payable 100,435 166,222
Total Long-term Liabilities 100,688 182,633
Total liabilities 2,342,629 2,990,676
Stockholders' Equity:
Common stock 42,259 42,259
Additional paid in capital 2,282,866 2,282,866
Accumulated Deficit 24,729 (489,344)
_____________ ___________
Total Stockholders' Equity 2,349,854 1,835,781
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 4,692,483 $ 4,826,457
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF OPERATIONS
<CAPTION>
Year Ended December 31,
1997 1996 1995
<S> <C> <C> <C>
Revenue $9,940,555 $8,689,068 $5,532,612
Cost of Goods Sold 6,352,386 5,216,018 3,521,602
Gross Profit 3,588,169 3,473,050 2,011,010
Research and Development
Expenses 805,027 547,617 505,956
Selling, General, and
Administrative
Expenses 1,902,746 1,850,899 1,298,411
Operating Income 880,396 1,074,534 206,643
Financial Expense, net 126,731 162,848 185,639
Income before
Income Taxes 753,665 911,686 21,004
Income Tax 239,592 141,929 -
Net Income $514,073 $769,757 $21,004
Net Income per
Common Share $ .12 $ .18 $ .005
Net Income per
Diluted Share $ .11 $ .18 $ .005
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
COMMON PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAl
<S> <C> <C> <C> <C> <C>
Balances, December 31, 1994 3,957,051 $39,571 $2,251,954 $(1,280,105) $1,011,420
Exercise of Stock
Options 268,800 2,688 30,912 -- 33,600
Net Income for 1995 - - - 21,004 21,004
Balances, December 31, 1995 4,225,851 42,259 2,282,866 (1,259,101) 1,066,024
Net Income for 1996 - - - 769,757 769,757
Balances, December 31, 1996 4,225,851 42,259 2,282,866 (489,344) 1,825,781
Net Income for 1997 - - - 514,073 514,073
Totals 4,225,851 $42,259 $2,282,866 $ 24,729 $2,349,854
<FN> See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF CASH FLOWS <CAPTION>
Year Ended December 31,
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income $514,073 $769,757 $21,004
Noncash items included in net income
Depreciation and amortization 111,795 109,596 102,369
Gain (loss) on sale of
equipment, net - 6,411 (4,478)
(Increase) Decrease in
Accounts receivables (609,244) 324,490 (251,579)
Costs and estimated earnings
in excess of contract billings
on contracts in progress 240,917 (262,114) 91,602
Inventory 606,429 (1,182,860) 96,089
Prepaid items and other (25,189) 10,659 (31,405)
Increase (Decrease) in
Accounts payable (284,956) 306,514 28,350
Accrued expenses 38,477 203,315 7,763
Contract billings on contracts in progress
in excess of costs and estimated earnings 6,536 (29,571) 192,273
Estimated losses on
uncompleted contracts 23,807 (9,798) 3,928
Income taxes payable 110,359 - -
Net Cash Provided by
Operating Activities 733,004 246,399 255,916
Cash Flows from Investing Activities
Purchase of property and
equipment (101,156) (71,913) (10,157)
Capitalized software costs -- -- (13,270)-
Net Cash used by Investing Activities (101,156) (71,913) (23,427)
Cash Flows from Financing Activities
Proceeds from issuance of common stock -- -- 33,600
Proceeds from sale of
property and equipment -- -- --
Proceeds from line of
credit, net - 170,000 81,000
Payments on line of
credit, net (331,829) -- --
Payments on term notes payable (194,283) (300,000) (375,000)
Payments on installment notes payable (16,158) (5,405) (2,716)_
Payments on stockholder loans payable - (10,000) (10,000)
Net Cash Used by
Financing Activities (542,270) (145,405) (273,116)
Net Increase (Decrease)
in Cash and Cash
Equivalents 89,578 29,801 (40,627)
Cash and Cash Equivalents,
beginning of year 78,970 49,889 90,516
Cash and Cash Equivalents,
end of year $168,548 $78,970 $79,889
<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 $117,438 in 1997,
$160,637 in 1996 annd $180,523 in 1995. Income taxes paid
amounted to $167,180 in 1997, $162,350 in 1996 and $0 in 1995.
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.
Financial Instruments: The estimated fair value of cash and cash
equivalents, accounts receivable, accounts payable and accrued
expenses and short term notes receivable and payable approximate
their carrying amounts in the financial statements. Based on the
borrowing rates currently available to the company for debt with
similar maturity dates and collateral, the estimated fair value of
long-term debt is $101,000 at December 31, 1997..
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.
Earnings Per Share: The Company has adopted
Statement of Financial Accounting
Standards ("SFAS") No. 128 which establishes standards for
computing and presenting earnings per share (EPS) for
entities with publicly held common stock. The standard requires
presentation of two categories of earning per share, basic EPS
and diluted EPS. Basic EPS excludes dilution and is computed
by dividing income available to common stockholders by the
weighted-average number of common shares outstanding for
the year. Diluted EPS reflects the potential dilution that could
occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the
Company. The 1996 and 1995 net income per common share
information has been restated to account for the provisions
of SFAS 128.
<TABLE>
<CAPTION>
1997 1996 1995
Per-Share Per-Share Per-Share
Income Shares Amount Income Shares Amount Income Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Income $514,073 $769,759 $21,004
Basic EPS
Income available
to common
stockholders 514,073 4,225,851 $.12 769,757 4,225,851 $.18 21,004 4,018,375 $.005
Effect of Dilutive
Securities
Stock options
unexercised - 121,013 - 130,568 - -
Dilutive EPS
Income available
to common
stockholders
plus assumed
conversions 514,073 4,346,864 $.11 769,757 4,356,419 $.18 $21,004 4,018,375 $.005
</TABLE>
(2) CONTRACTS IN PROGRESS
Information with respect to contracts in progress at December
31, is as follows:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Direct and indirect costs, including overhead $2,803,879 $ 2,162,549
Estimated losses, net (24,902) (1,095)
$2,778,977 $2,161,454
Billings $2,401,356 $1,534,215
Costs and estimated earnings in excess of billings 402,523 628,334
Estimated losses on contracts in process (24,902) (1,095)
$2,778,977 $2,161,454
</TABLE>
(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:
1997 1996
Electronic components $748,200 $702,216
Work in process 525,353 1,232,440
Finished goods 255,249 200,575
$1,528,802 $2,135,231
(4) ACCUMULATED DEPRECIATION AND AMORTIZATION
Accumulated depreciation and amortization at December 31, is as
follows:
1997 1996
Furniture and equipment $1.,133,356 $1,041,005
Automotive equipment 12,617 24,743
Leasehold improvements 8,378 6,525
$1,154,351 $1,072,273
(5) 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 1997 and 1996.
(6) LINE OF CREDIT
The Company signed a loan and security agreement dated
June 5, 1997, 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 $2,000,000 or the
Company's borrowing base as determined by the bank. Interest
on the unpaid balance is payable monthly at prime plus one half
percent. The maturity date of the line is June 1, 1998, and the
outstanding balance at December 31, 1997 amounted to $573,171
and $905,000 at December 31, 1996.
(7) 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 $343,008. The remaining principal payments under the
agreement, amount to $14,292 per month for 23 months and 1
final payment on July 1, 1999 for the remaining unpaid balance.
Interest on the unpaid balance is payable monthly at prime plus
three quarters percent. Additionally, the loan agreement contains
certain financial covenants. As of December 31, 1997, the
Corporation was in violation of one equity covenant. The bank
has waived compliance. The above referenced line of credit and
term note payable are secured by substantially all assets
of the Company.
Principal maturities for all indebtedness described in Notes 6
and 7 are as follows at December 31:
Year ending December 31:
1997 $ --
1998 744,675
1999 100,435
$ 845,110
(8) STOCKHOLDER LOANS PAYABLE
At December 31, 1997 the Company had promissory notes totaling
$80,000 payable on demand to two officers of the Company.
The promissory notes are expected to be repaid in 1998 with
interest at 10.75 percent.
(9) LEASE OBLIGATIONS
The Company signed a 5 year option under the current lease
for its headquarters and production facilities. The operating
lease calls for monthly rent of $12,975 including $3,100
estimated as the Company's pro rata share of operating expenses
and annual rent increases of 3 percent. Rent expense amounted
to $152,000 for 1997, $144,000 for 1996 and $151,125 for 1995.
Year ending December 31:
1998 $155,700
1999 160,400
2000 165,200
2001 $170,100
2002 42,500
Total $693,900
(10) INCOME TAXES
The provision for income taxes charged to continuing operations
for the years ended December 31, was as follows:
1997 1996 1995
Current income taxes $269,592 $141,929 $-
Deferred tax expense (30,000) - -
Total tax expense $239,592 $141,929 $-
Deferred tax assets, net of tax effect, are comprised of the
following at December 31:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Investment $ 307,000 $ 307,000 $307,000
Net operating loss carryforward - - 123,000
Estimated losses on contracts 10,000 - 4,000
Accrued vacation and warranty 50,000 29,000 29,000
Gross deferred tax assets 367,000 336,000 463,000
Gross deferred tax liability - depreciation (18,000) (23,000) (25,000)
Net 349,000 313,000 438,000
Deferred tax asset valuation allowance (319,000) (313,000) (438,000)
Net deferred tax asset $ 30,000 $ - $ -
</TABLE>
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:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Income before income taxes $753,665 $911,686 $21,004
Applicable statutory income tax rate 34% 34% 34%
Computed "expected" Federal tax expenses 256,000 310,000 7,000
Adjustments to Federal income
tax resulting from:
State income tax 15,000 18,000 1,000
Tax credits (37,408) (61,071) -
Change in valuation allowance 6,000 (125,000) (8,000)
Income tax $239,592 $141,929 $ -
</TABLE>
(11) 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:
1997 1996 1995
Domestic:
Department of Interior 57% 39% 56%
International 14% 35% 14%
Commercial 15% 10% 15%
(12) STOCK BONUS AND STOCK OPTION PLANS
Stock Options: The Company has granted stock options under
a stock option agreement and the 1996 Stock Option Plan to
key employees and directors for valuable services to the
Company. Under the 1996 Plan a maximum of 260,000 shares
may be granted at not less than 100 percent of the fair market
value at the grant date. All options have a ten year term from
the date of grant. The Company authorized 60,000 shares under
a 1997 stock option plan. No shares were granted in 1997. The
following summarizes the option activity under the stock option
agreement and the 1996 Stock Option Plan for the last three years:
Number of Option Price
Shares Per Share
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
Grants 259,000 1.125
Exercised - -
Canceled or expired - -
Outstanding, December 31, 1996 376,500 .53 - 1.125
Grants - -
Exercised - -
Canceled or expired (15,000) -
Outstanding, December 31, 1997 361,500 .53 - 1.125
The vesting period of the remaining options is as follows:
Vested and exercisable 154,300
November 1, 1998 51,800
November 1, 1999 51,800
November 1, 2000 51,800
November 1, 2001 51,800
361,500
Stock Compensation: In 1996, the Company adopted the
disclosure-only provisions of Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation
and will continue to apply Accounting Principles Board No. 25
and related interpretations in accounting for its plans. SFAS 123
establishes standards of financial accounting and reporting for
stock-based employee compensation plans including stock
option plans, stock purchase plans and other arrangements by
which employees receive shares of stock or other equity
instruments based on the market price of an entity's stock.
If the Company had elected to recognize compensation cost
for the plan based on the fair value at the grant dates for awards
under those plans, consistent with the method prescribed by
SFAS No. 123, net income and earnings per share would have
been changed to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1997 1996 1995
<C> <C> <C> <C>
Net income As reported $514,073 $769,757 $21,004
Pro forma 481,534 737,218 21,004
Earnings per share As reported .12 .18 .005
Pro forma .11 .17 .005
</TABLE>
The fair value of the options granted in 1996 amounted to $120,000.
Compensation costs under SFAS 123, are recognized when the
options are vested and exercisable. The fair value of Sutron
Corporation stock options used to compute pro forma net income
and earnings per share disclosures is the estimated present value
at grant date using the Black Scholes pricing model with the
following assumptions for 1996: a risk free interest rate of 6.45
percent, no estimated dividend yield, an expected volatility of
34 percent and an expected holding period of five years.
(13) 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 $128,000 for 1997, $92,660
for 1996 and $-0- for 1995.
(14) EXPORT SALES
Export Sales from the Company's operations were as follows:
(In thousands) 1997 1996 1995
South America $534 $1,844 $480
Canada 307 765 43
Asia 312 321 108
Australia/New Zealand 25 9 9
Europe 188 75 118
$1,366 $3,014 $758
<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, 1998 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, 1997, the positions and offices with
the Company held by them, the date they first became officers,
and their ages at December 31, 1997:
First
Became
Name Office an Officer Age
Raul S. McQuivey President, Chief Executive 1980 58
Officer and Chairman
Glenn A. Conover Executtive Vice President
and a Director 1985 58
Daniel W. Farrell Vice President, Secretary 1984 45
and a Director
Sidney C. Hooper Treasurer 1993 39
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)
4(g) 1996 Stock Option Plan (11)
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)
10(t) Stock Option Agreement between Sutron Corporation and
Raul S. McQuivey dated November 1, 1996 (11)
10(u) Stock Option Agreement between Sutron Corporation and
Glenn A. Conover dated November 1, 1996 (11)
10(v) Stock Option Agreement between Sutron Corporation and
Daniel W. Farrell dated November 1, 1996 (11)
10(w) Stock Option Agreement between Sutron Corporation and
Sidney C. Hooper November 1, 1996 (11)
(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.
(11) Filed as Exhibits to Registrants Annual Report on Form 10-KSB
for the year ended December 31, 1996 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, 1997.
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: March 31, 1998
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: March 31, 1998
By
/s/ Raul S. McQuivey
Raul S. McQuivey,
President
and Director
(Principal
Executive and
Financial
Officer)
Date: March 31, 1998
By
/s/ Thomas N. Keefer
Thomas N. Keefer,
Director
Date: March 31, 1998
By
/s/ Daniel W. Farrell
Daniel W. Farrell,
Vice
President and
Director
Date: March 31, 1998
By
/s/ Glenn A. Conover
Glenn A. Conover,
Vice
President and
Director
Date: March 31, 1998
By
/s/ Ronald C. Dodson
Ronald C. Dodson
Director
Date: March 31, 1998
By
/s/ Sidney C. Hooper
Sidney C. Hooper,
Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Article 5 Fin. Data Schedule for fiscal ended DEC-31-97
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 168548
<SECURITIES> 0
<RECEIVABLES> 1804525
<ALLOWANCES> 0
<INVENTORY> 1528802
<CURRENT-ASSETS> 3976068
<PP&E> 1298789
<DEPRECIATION> 1154351
<TOTAL-ASSETS> 4692483
<CURRENT-LIABILITIES> 2808043
<BONDS> 0
<COMMON> 42259
0
0
<OTHER-SE> 2307595
<TOTAL-LIABILITY-AND-EQUITY> 4692483
<SALES> 9940555
<TOTAL-REVENUES> 9940555
<CGS> 6352386
<TOTAL-COSTS> 6352386
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126731
<INCOME-PRETAX> 753665
<INCOME-TAX> 239592
<INCOME-CONTINUING> 514073
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 514073
<EPS-PRIMARY> .012
<EPS-DILUTED> .011
</TABLE>
