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 September 30, 2000
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 November 13, 2000.
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PART I. - FINANCIAL INFORMATION
SUTRON CORPORATION
BALANCE SHEETS
<CAPTION>
(Unaudited)
September 30, December 31,
2000 1999
___________ ___________
<S> <C> <C>
Assets
Current Assets:
Cash $47,451 $159,507
Accounts receivables 2,097,516 1,682,634
Inventory 2,567,418 2,537,248
Other 392,215 225,707
___________ ___________
Total Current Asset 5,104,600 4,605,096
Property, Plant, and Equipment,
less accumulated depreciation
and amortization of $1,489,050
and $1,355,715 741,523 677,566
Deposits and Other Assets 83,631 14,247
___________ __________
TOTAL ASSETS $5,929,754 $5,296,909
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<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable $606,169 $502,961
Accrued payroll 67,971 151,661
Accrued expenses 494,500 591,194
Accrued income taxes 40,000 -
Contract billings on contracts in progress in
excess of costs and estimated earnings - 4,598
Estimated losses on uncompleted contracts - 21,907
Line of credit 491,646 -
Shareholder loans payable - -
Current maturities of long-term notes 56,579 25,000
_______ ______
Total Current Liabilities 1,756,865 1,297,321
Long-term liabilities:
Long-term notes payable 125,986 50,000
_________ __________
Total liabilities 1,882,851 1,347,321
Stockholders' Equity:
Common stock, $.01 par value, 42,984 42,984
Additional paid in capital 2,316,236 2,316,236
Retained Earnings 1,687,683 1,590,368
___________ __________
Total Stockholders' Equity 4,046,903 3,949,588
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,929,754 $5,296,909
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
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SUTRON CORPORTION
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended
September 30,
2000 1999
___________ ___________
<S> <C> <C>
Revenues $ 3,569,338 $ 3,133,389
Cost of Goods Sold 1,939,777 1,716,634
___________ __________
Gross Profit 1,629,561 1,416,755
Research and Development Expenses 338,138 357,108
Selling, General, and
Administrative Expenses 609,169 534,632
___________ ___________
Income (Loss) from Operations 682,254 525,015
Other Expense - -
Interest Expense 16,371 13,477
Income (Loss) before Provision ____________ ___________
for Income Taxes 665,883 511,538
Provisions for Income Taxes 251,619 186,000
____________ ___________
Net Income (Loss) $ 414,264 $ 325,538
Net Income (Loss) per Common Share $.10 $.08
Weighted Average Number
of Common Shares 4,298,351 4,298,351
<FN>See Accompanying Notes to Financial Statements
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SUTRON CORPORTION
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
2000 1999
___________ ___________
<S> <C> <C>
Revenues $ 7,249,800 $ 8,727,213
Cost of Goods Sold 4,329,252 4,913,045
___________ __________
Gross Profit 2,920,548 3,814,168
Research and Development Expenses 1,049,079 827,605
Selling, General, and
Administrative Expenses 1,696,580 1,750,429
___________ ___________
Income (Loss) from Operations 174,889 1,236,134
Other Income (Expense) - (7,804)
Interest Expense 19,754 33,518
Income (Loss) before Provision ____________ ___________
for Income Taxes 155,135 1,194,812
Provisions for Income Taxes 57,820 415,500
____________ ___________
Net Income (Loss) $ 97,315 $ 779,312
Net Income (Loss) per Common Share $.02 $.18
Weighted Average Number
of Common Shares 4,298,351 4,298,351
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
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SUTRON CORPORTION
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
2000 1999
___________ ___________
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ 97,315 $ 779,312
Noncash items included in net income (loss):
Depreciation and amortization 133,335 80,983
(Gain) Loss on sale of assets - -
(Increase) Decrease in:
Accounts receivables (414,882) 206,638
Costs and estimated earnings in
excess of contract billings (4,598) 980,649
Inventory (30,170) (693,757)
Prepaid items and other (235,892) 229,861
Increase (Decrease) in:
Accounts payable 103,208 (65,507)
Accrued expenses (180,384) (172,277)
Accrued income taxes 40,000 26,840
Estimated losses on uncompleted contracts (21,907) -
Net Cash Provided (Used) by Operating Activities (513,975) 1,372,742
Cash Flows from Investing Activities:
Purchase of property and equipment (197,292) (215,440)
Net Cash Used in Investing Activities (197,292) (215,440)
Cash Flows from Financing Activities:
Payments on line of credit - (650,588)
Payments on installment loans - (3,410)
Payments on stockholder loans - (55,000)
Payments on term notes payable - (18,750)
Payment for Treasury Stock - -
Proceeds from sale of land - -
Proceeds from term note 107,565 -
Proceeds from line of credit advances 491,646 -
Net Cash (Used) Provided by Financing Activities 599,211 (727,748)
Net Increase (Decrease) in Cash and Cash Equivalents (112,056) 429,554
Cash and Cash Equivalents, January 1 159,507 76,204
Cash and Cash Equivalents, September 30 $ 47,451 $505,758
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
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SUTRON CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
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 1999 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
Third Quarter 2000 Compared to 1999
Net Revenues. Sutron Corporation revenues for the
fiscal quarters ended September 30, 2000 and
September 30, 1999 were $3,569,338 and $3,133,389,
respectively (an increase of 14%). Shipments on
four international projects to Peru and
Central America represented 49% of third quarter sales
for the quarter ended September 30, 2000.
Gross Profit. The Company's gross profit for the quarter
ended September 30, 2000 increased 15% to $1,629,561
from $1,416,755 for the quarter ended September 30, 1999.
Gross profit as a percentage of sales increased to 45.7%
from 45.2%. Gross profits increased in 2000 due primarily
to the increase in sales.
Selling, General And Administrative. Selling, general
And administrative costs increased to $609,169
for the quarter ended September 30, 2000 from $534,632
for 1999. The increase is due to increased sales
commissions relating to the international projects
which shipped during the third quarter of 2000.
Research And Development. Research and development
expenses decreased 5% to $338,138 in the quarter ended
September 30, 2000 from $357,108 in the quarter ended
September 30, 1999.
Nine months ended September 30, 2000 Compared to 1999
Revenues. The Company's revenues for the nine months ended
September 30, 2000 decreased 17% to $7,249,800 from revenues
of $8,727,213 in 1999. The US Geological Survey placed two
orders totaling $1,912,000 for the 8210 Data Recorder/GOES
Transmitter during the first six months of 1999. These were
one time orders. The 8210's replaced older units which were
retired by the US Geological Survey.
Gross Profit. Gross profit for 2000 decreased to $2,920,548
from $3,814,168 in 1999. Gross margin as a percentage of
revenues for 2000 decreased to 40.3% as compared to 43.7%
in 1999. The decrease in the Company's gross margin as a
percentage of sales is attributed to the decreased sales volume.
Selling, General and Administrative. Selling, general and
administrative expenses increased to $1,696,580 in 2000 from
$1,750,429 in 1999, a decrease of $53,849 due to decreased
sales and marketing activities by the Integrated Services
Division and international selling expenses.
Research and Development. Research and development
expenses increased 27% to $1,049,079 in 2000 from $827,605
in 1999, an increase of $221,474. The Company is working
on four major new producs and has added additional
engineers and support staff and increased spending on
application and software development projects
during the nine months ended September 30, 2000.
Backlog. The Company's backlog of orders at September 30, 2000 was
approximately $3,407,000. The Company anticipates that 65%
of its backlog will be shipped in 2000.
Liquidity and Capital Resources
Cash and cash equivalents decreased to $47,451 at September 30, 2000,
compared to $159,507 at December 31, 1999.
The ratio of current assets to current liabilities was 2.9 as of
September 30, 2000, compared to 3.6 as of December 31, 1999. Working
capital increased $39,960 to $3,347,735 at the end of the third
quarter of fiscal 2000 compared to $3,307,775 at the end of fiscal 1999.
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 2000.
<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)
November 14, 2000 By /s/ Raul S. McQuivey
Date Raul S. McQuivey
Principal Executive Officer
November 14, 2000 By /s/ Sidney C. Hooper
Date Sidney C. Hooper
Treasurer and Principal
Accounting Officer
