UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1999
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 Identification No.)
incorporation organization)
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 [ ]
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 - 4,298,351 shares of as of March 31, 1999.
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
SUTRON CORPORATION
BALANCE SHEETS
<CAPTION>
(Unaudited)
March 31, December 31,
1999 1998
___________ ___________
<S> <C> <C>
Assets
Current Assets:
Cash $166,910 $76,204
Accounts receivables 1,330,561 1,761,262
Cost and estimated earnings in excess
of billings 595,644 1,136,910
Inventory 2,193,046 1,828,240
Other 322,690 368,870
___________ ___________
Total Current Asset 4,608,850 5,171,486
Property, Plant, and Equipment,
less accumulated depreciation
and amortization of $1,265,001
and $1,241,053 602,189 536,111
Deposits and Other Assets 32,003 36,734
___________ __________
TOTAL ASSETS $5,243,043 $5,744,331
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable $439,643 $752,286
Accrued payroll 158,173 106,848
Accrued expenses 507,135 732,655
Accrued income taxes 45,240 -
Contract billings on contracts in progress in
excess of costs and estimated earnings 117,192 117,192
Estimated losses on uncompleted contracts 11,673 11,673
Line of credit 493,143 650,571
Shareholder loans payable 55,000 55,000
Current maturities of long-term notes 25,411 28,410
_______ ______
Total Current Liabilities 1,852,609 2,454,635
Long-term liabilities:
Long-term notes payable 68,750 75,000
_________ __________
Total liabilities 1,921,359 2,529,635
Stockholders' Equity:
Common stock, $.01 par value, 42,984 42,984 Additional paid in capital 2,316,236 2,316,236
Retained Earnings 962,463 855,476 ___________ ___________
Total Stockholders' Equity 3,321,683 3,214,696
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,243,043 $5,744,331
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
1999 1998
___________ ___________
<S> <C> <C>
Revenues $2,535,190 $1,809,749
Cost of Goods Sold 1,529,072 1,108,488
___________ __________
Gross Profit 1,006,118 701,261
Research and Development Expenses 228,378 202,240
Selling, General, and
Administrative Expenses 606,436 480,951
___________ ___________
Income (Loss) from Operations 171,304 18,070
Other Expense 7,682 7,219
Interest Expense 11,135 13,802
Income (Loss) before Provision ____________ ___________
for Income Taxes 152,487 (2,951)
Provisions for Income Taxes 45,500 (10,750)
____________ ___________
Net Income $106,987 $7,799
Net Income per Common Share $.02 $.00
Weighted Average Number
of Common Shares 4,298,351 4,225,851
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
1999 1998
___________ __________
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $106,987 $ 7,799
Depreciation and amortization 26,994 21,996
(Increase) Decrease in:
Accounts receivables 370,011 714,917
Costs and estimated earnings in
excess of contract billings 601,956 197,079
Inventory (364,805) (226,077)
Other assets 47,863 (65,313)
Increase (Decrease) in:
Accounts payable (312,644) 57,330
Accrued expenses (174,194) 75,981
Accrued income taxes 45,240 (92,033)
Estimated losses on uncompleted
contracts 0 (10,926)
__________ _______
Net Cash Provided by Operating Activities 347,408 680,753
Cash Flows from Investing Activities:
Capital expenditures (90,026) (202,534)
Net Cash Used in Investing Activities (90,026) (202,534)
Cash Flows from Financing Activities:
Payments on line of credit (157,428) (573,171)
Payments on Term notes payable (6,250) (42,876)
Payments on Installment notes payable (2,999) (633)
Payments on shareholder notes - (25,000) ___________ __________
Net Cash (Used) by Financing Activities (166,677) (641,680)
Net Increase (Decrease) in Cash 90,705 163,461
Cash and Cash Equivalents, January 1 76,205 168,549
___________ __________
Cash and Cash Equivalents, March 31 $ 166,910 $ 5,088
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
SUTRON CORPORATION
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
1. Basis of Presentation
The accompanying financial statements, which should be read in conjunction
with the financial statements of Sutron Corporation ("the Company") included
in the 1998 Annual Report filed on Form 10-KSB, are unaudited but have
been prepared in the ordinary course of business for the purpose of providing
information with respect to the interim period. The Company believes that all
adjustments (none of which were other than normal recurring accruals)
necessary for a fair presentation for such periods have been included.
2. 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.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net Revenues. The Company's revenues for the three months
ended March 31, 1999 increased 40% to $2,535,190 from $1,809,749
in 1998 due to increased revenues from sales of products and
services. The Company carried a larger backlog into 1999
than into the prior year and had record bookings for the first
quarter of 1999. Sales of the 8210 datalogger product line were
significantly higher than the prior year.
Gross Profit. Gross profit for 1999 increased to $1,006,118 from
$701,261 in 1998. Gross margin as a percentage of revenues
for 1999 increased to 40% as compared to 39% in 1998. The
increase in the Company's gross margin as a percentage of sales
is attributed to increased sales volume and to increased sales
of standard products which carry higher margins than services.
Selling, General And Administrative. Selling, general
and administrative expenses increased to $606,436 in 1999
from $480,951 in 1998, an increase of $125,485. These expenses
decreased as a percentage of revenues to 24% in 1999 from
27% in 1998. Both general and administrative expenses and
selling expenses increased due to sales and administrative
personnel increases.
Research And Development. Research and development expenses
increased 12% to $228,378 in 1999 from $202,240 in 1998, an
increase of $26,138. The Company has hired three new R&D
engineers in the last nine months in an effort to expand its
R&D activities and decrease development times.
Interest Expenses. Interest expenses decreased to $11,135 in 1999
from $13,802 in 1998 as a result of the company's reduced
borrowings on the line of credit.
The Company's backlog of orders at March 31, 1999 was
$3,428,523. The Company anticipates that 90% of its
March backlog will be shipped in 1999.
Liquidity and Capital Resources
Cash and cash equivalents increased to $166,910 at March 31, 1999,
compared to $76,204 at December 31, 1998.
The ratio of current assets to current liabilities was 2.5 as of
March 31, 1999, compared to 2.1 as of December 31, 1998. Working
capital increased $39,387 to $2,756,241 at the end of the first
quarter of fiscal 1999 compared to $2,716,854 at the end of fiscal 1998.
Management believes internally generated funds and short-term
borrowings on our existing credit line will provide adequate resources
for supporting operations during the remainder of fiscal 1999.
Impact of the Year 2000 Issue
The Company's current line of products is year 2000 ready. In addition,
The Company has made available to its customers year 2000 information
Concerning its products, services and support. The Company's suppliers
Have been contacted and have informed us that they are compliant. The
Company's Information Systems group has reviewed the critical
Applications and has identified no significant problems.
The Company has determined its worst case scenario as being the
Development of service or product supply difficulities by
Business and critical suppliers. There can be no assurance that the
Systems or products of other companies on which the Company's
Systems rely will be timely converted or that any such failure to
Convert by a vendor, customer or another company would not have
An adverse effect.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
B. Reports on Form 8-K
No reports have been filed on Form 8-K during this quarter.
<PAGE>
SUTRON CORPORATION
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Sutron Corporation
(Registrant)
May 13, 1999 Raul S. McQuivey
Date Raul S. McQuviey
Principal Executive Officer
May 13, 1999 Sidney C. Hooper
Date Sidney C. Hooper
Principal Accounting Officer
<SEQUENCE>2
[DESCRIPTION]STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Exhibit 11
Sutron Corporation
Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
__________ _________
<S> <C> <C>
Basic EPS
Average shares outstanding 4,298,351 4,225,851
Net Income $106,987 $7,799
Net Income per common share $.02 $.0
Dilutive EPS
Average shares outstanding 4,298,351 4,225,851
Effect of dilutive securities 25,900 144,245
Total average shares outstanding 4,324,251 4,416,212
Net earnings $106,987 $7,799
Net income per diluted share $.02 $.0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Article 5 Fin. Data Schedule for 1st Qtr 10-QSB
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 166910
<SECURITIES> 0
<RECEIVABLES> 1330561
<ALLOWANCES> 0
<INVENTORY> 2193046
<CURRENT-ASSETS> 4608850
<PP&E> 1867190
<DEPRECIATION> 1265001
<TOTAL-ASSETS> 5243043
<CURRENT-LIABILITIES> 1852609
<BONDS> 0
<COMMON> 42984
0
0
<OTHER-SE> 3278699
<TOTAL-LIABILITY-AND-EQUITY> 4088954
<SALES> 2535190
<TOTAL-REVENUES> 2535190
<CGS> 1529072
<TOTAL-COSTS> 1529072
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11135
<INCOME-PRETAX> 152487
<INCOME-TAX> 45500
<INCOME-CONTINUING> 106987
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106987
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
