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 June 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 June 30, 2000.
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<TABLE>
PART I. - FINANCIAL INFORMATION
SUTRON CORPORATION
BALANCE SHEETS
<CAPTION>
(Unaudited)
June 30, December 31,
2000 1999
___________ ___________
<S> <C> <C>
Assets
Current Assets:
Cash $556 $159,507
Accounts receivables 1,054,763 1,682,634
Cost and estimated earnings in excess
of billings - -
Inventory 2,998,949 2,537,248
Other 408,371 225,707
___________ ___________
Total Current Asset 4,462,639 4,605,096
Property, Plant, and Equipment,
less accumulated depreciation
and amortization of $1,444,605
and $1,355,715 837,505 677,566
Deposits and Other Assets 88,023 14,247
___________ __________
TOTAL ASSETS $5,388,167 $5,296,909
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Accounts payable $441,106 $502,961
Accrued payroll 142,605 151,661
Accrued expenses 456,731 591,194
Accrued income taxes - -
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 652,585 -
Shareholder loans payable - -
Current maturities of long-term notes 25,000 25,000
_______ ______
Total Current Liabilities 1,718,027 1,297,321
Long-term liabilities:
Long-term notes payable 37,500 50,000
_________ __________
Total liabilities 1,755,527 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 1,273,420 1,590,368
___________ __________
Total Stockholders' Equity 3,632,640 3,949,588
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,388,167 $5,296,909
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended
June 30,
2000 1999
___________ ___________
<S> <C> <C>
Revenues $1,762,892 $3,058,634
Cost of Goods Sold 1,184,263 1,667,260
___________ __________
Gross Profit 578,629 1,391,374
Research and Development Expenses 297,062 241,991
Selling, General, and
Administrative Expenses 487,562 609,568
___________ ___________
Income (Loss) from Operations (205,995) 539,814
Interest Expense 1,761 9,028
Income (Loss) before Provision ____________ ___________
for Income Taxes (207,756) 530,787
Provisions for Income Taxes (57,800) 184,000
____________ ___________
Net Income $(149,956) $346,787
Net Income per Common Share $(.03) $.08
Weighted Average Number
of Common Shares 4,298,351 4,298,351
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
2000 1999
___________ ___________
<S> <C> <C>
Revenues $3,680,462 $5,593,824
Cost of Goods Sold 2,385,891 3,196,332
___________ __________
Gross Profit 1,294,571 2,397,492
Research and Development Expenses 710,942 470,413
Selling, General, and
Administrative Expenses 1,090,994 1,215,960
___________ ___________
Income (Loss) from Operations (507,365) 711,119
Other Expense - 7,682
Interest Expense 3,383 20,163
Income (Loss) before Provision ____________ ___________
for Income Taxes (510,748) 683,274
Provisions for Income Taxes (193,800) 229,500
____________ ___________
Net Income $(316,948) $453,774
Net Income per Common Share $(.07) $.11
Weighted Average Number
of Common Shares 4,298,351 4,298,351
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
2000 1999
___________ __________
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $(316,948) $ 453,774
Depreciation and amortization 88,890 47,886
(Increase) Decrease in:
Accounts receivables 627,870 56,424
Costs and estimated earnings in
excess of contract billings (4,598) 584,817
Inventory (461,701) (671,494)
Prepaid and other assets (256,440) 119,348
Increase (Decrease) in:
Accounts payable (61,855) (46,420)
Accrued expenses (143,519) (400,344)
Accrued income taxes 0 124,668
Estimated losses on uncompleted
contracts (21,907) 0
__________ _______
Net Cash Provided by Operating Activities (550,208) 268,659
Cash Flows from Investing Activities:
Capital expenditures (248,828) (125,347)
__________ _______
Net Cash Used in Investing Activities (248,828) (25,347)
Cash Flows from Financing Activities:
Payments on line of credit - (63,341)
Payments on Term notes payable (12,500) (12,500)
Payments on Installment notes payable - (3,428)
Payments on shareholder notes - (55,000)
Proceeds from advances on line of credit 652,585 -
___________ __________
Net Cash (Used) by Financing Activities 640,085 (134,263)
Net Increase (Decrease) in Cash (158,951) 9,049
Cash and Cash Equivalents, January 1 159,507 76,205
___________ __________
Cash and Cash Equivalents, June 30 $ 556 $ 85,254
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
SUTRON CORPORATION
NOTES TO FINANCIAL STATEMENTS
June 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
Second Quarter 2000 Compared to 1999
Net Revenues. Sutron Corporation revenues for the
fiscal quarters ended June 30, 2000 and June 30, 1999 were
$1,762,892 and $3,058,634, respectively (a decrease of 42%).
The decrease is due to a slow-down in domestic orders and
the Company not being able to ship several large
international orders requiring significant systems integration.
Gross Profit. The Company's gross profit for the quarter
ended June 30, 2000 decreased 58% to $578,629 from $1,391,374
for June 30, 1999. Gross profit as a percentage of sales decreased
to 32.8% from 45.5%. Gross profits were higher in 1999 due to strong
sales of the 8210 Data Recorder with a GOES Satellite Transmitter
and to reduced manufacturing costs of the 8210's in 1999 due to
larger and more efficient production runs.
Selling, General And Administrative. Selling, general and
administrative costs decreased $122,006 to $487,562 for the quarter
ended June 30, 2000 from $609,568 for 1999. The decrease is due
to reduced sales and marketing activities by the Integrated Systems
Division and decreased international selling expenses.
Research And Development. Research and development
expenses increased $55,071 to $297,062 in the quarter ended June 30,
2000 from $241,991 in the quarter ended June 30, 1999. The
Company has increased its engineering staff compared with
the prior year and expanded its new product development
activities.
Six months ended June 30, 2000 Compared to 1999
Revenues. The Company's revenues for the six months ended
June 30, 2000 decreased 34% to $3,680,462 from revenues
of $5,593,824 in 1999 due to decreased sales of the
8210 Data Recorder/Transmitter product line. The US
Geological Survey placed two orders totaling $1,912,000
for the 8210 Data Recorder with a GOES transmitter during
the first six months of 1999. These orders have reduced
demand for the 8210 Data Recorder/Transmitter in 2000.
Gross Profit. Gross profit for 2000 decreased to $1,294,571
from $2,397,492 in 1999. Gross margin as a percentage of
revenues for 2000 decreased to 35.2% as compared to 42.9%
in 1999. The decrease in the Company's gross margin as a
percentage of sales is attributed to the decreased sales volume
of $1,913,363.
Selling, General and Administrative. Selling, general and
administrative expenses decreased to $1,090,994 in 2000 from
$1,215,960 in 1999, a decrease of $124,966 due to decreased
sales and marketing activities by the Integrated Services
Division and decreased international selling expenses.
Research and Development. Research and development
expenses increased $240,529 to $710,942 in 2000 from $470,413
in 1999. The Company has increased its engineering staff and
expanded product development activities in 2000.
Backlog. The Company's backlog of orders at June 30, 2000 was
approximately $3,811,000. The Company anticipates that 95%
of its June backlog will be shipped in 2000.
Liquidity and Capital Resources
Cash and cash equivalents decreased to $556 at June 30, 2000,
compared to $159,507 at December 31, 1999.
The ratio of current assets to current liabilities was 2.6 as of
June 30, 2000, compared to 3.6 as of December 31, 1999. Working
capital decreased $563,163 to $2,744,612 at the end of the second
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 4. Submission of Matters to a Vote of Security Holders
On May 10, 2000, an Annual Meeting of Shareholders
of Sutron Corporation was held. Directors elected at the
meeting were Raul S. McQuivey, Thomas N. Keefer,
Daniel W. Farrell, Glenn A. Conover and Ronald C. Dodson.
Thompson, Greenspon & Co., P.C. were appointed as
independent accountants for 2000. The election of directors
and the appointment of the independent accountants were
the only matters voted upon at the meeting. The number of
shares eligible to vote at the meeting were 4,298,351. The
results of the voting on these three matters are shown below.
<TABLE>
<CAPTION>
1. Election of Directors
Name Votes For Votes Against Votes Withheld
<S> <C> <C> <C>
Raul S. McQuivey 3,867,115 -- 1,350
Thomas N. Keefer 3,867,115 -- 1,350
Daniel W. Farrell 3,867,115 -- 1,350
Glenn A. Conover 3,867,115 -- 1,350
Ronald C. Dodson 3,867,115 -- 1,350
</TABLE>
2. Appointment of Thompson, Greenspon & Co., P.C.
as Independent Accountants.
For Against Abstain
3,867,435 380 650
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)
August 14, 2000 /s/Raul S. McQuivey
Date Raul S. McQuviey
Principal Executive Officer
August 14, 2000 /s/Sidney C. Hooper
Date Sidney C. Hooper
Principal Accounting Officer
