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, 1998
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. [ ]
Issuer's revenues for its most recent fiscal year were
$9,887,578.
The aggregate market value of the voting stock held by non-
affiliates as of March 24, 1999 was approximately $2,084,625
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 24, 1999 was 4,298,351.
Documents Incorporated by Reference
Portions of the registrant's definitive proxy statement dated April 6, 1999
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.
The Company received an ISO 9001 certification on March 12, 1999.
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.
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.
AccuBubble Self-Contained Bubbler
The AccuBubble Self-Contained Bubbler is a mercury-free and
nitrogen-free bubbler apparatus designed for low maintenance
water level measuring. Using the Sutron Accubar Pressure Sensor
as the control and sensing element makes the AccuBubble a very
stable and highly accurate water level measuring device.
The AccuBubble uses power conservation techniques to minimize
current consumption. The bubbler purges the orifice line prior to
each measurement. This eliminates the need for a constant bubble rate,
which has been known to consume excessive power. In addition, the
purging sequence prevents debris build up in the orifice line.
The AccuBubble uses an oil-less, non-lubricated piston and cylinder
compressor. This type of compressor is designed to give consistent
air delivery without the use of a diaphragm which can rupture over time.
The AccuBubble uses the SDI-12 communications protocol as the control
interface. This allows the unit to be configured by any data loggers
supporting the SDI-12 standard.
Services
The company provides system integration services which include
the sale of Sutron's real-time database software (PC
Base II), the design and development of customer-specific
hardware configurations and software applications, and long-
term software support for PC Base II 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, 1998, 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 sell its products and services.
Customers
During 1998, approximately 50% of the Company's products and
services were sold to the Federal Government. Revenues in 1998
among the various agencies were as follows: U.S. Army Corps of Engineers, 9%;
Department of Defense, 3%; Department of the Interior, 35%; 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.
The Company also performed on various contracts of foreign
origin. Total revenues from foreign customers amounted to
approximately 29% of total revenues in 1998, 14% in 1997 and
35% of total revenues in 1996. 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.
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, 1998, 1997, and 1996,
Sutron's internally funded research and development costs were
$937,991, $805,027 and $547,617 respectively. In 1998 the Company
developed the AccuBubble, a water level monitoring instrument
and the EDACS certified 8210 which allows the 8210 to transmit
over Ericsson trunked radio systems used primarily by
municipalities and hydropower companies.
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.
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, 1998 was $2,606,785
as compared with $1,828,942 at December 31, 1997
and $3,733,466 at December 31, 1996. The Company
anticipates that 90% of its 1998 year-end backlog will be
shipped in 1999.
Employees
The Company had a total of 64 employees as of December 31,
1998 of which 62 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 sold this property in July 1998
for $700,000.
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 1998 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 1998 and 1997 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>
1998 1997
Quarter HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
First Quarter 1 31/32 1 9/32 1 5/8 1 1/4
Second Quarter 2 3/8 1 7/8 1 7/161 3/16
Third Quarter 2 8/32 1 5/16 1 7/8 1 5/16
Fourth Quarter 1 3/4 1 5/16 1 7/8 1 3/8
</TABLE>
(b) Approximate Number of Equity Shareholders:
Title of Class: Common Stock, $.01 par value
Approximate Number of Record Holders At March 24, 1999: 325
(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
Fiscal 1998 Compared to Fiscal 1997
Revenues. The Company's revenues for 1998 decreased
.5% to $9,887,575 from revenues of $9,940,556 in 1997,
a decrease of $52,981. Sales to agencies of the
federal government and other domestic customers decreased
to $7,128,000 from $8,158,000 in 1997, a decrease of
$1,030,000. Decreased sales of the 8200 and 8400
dataloggers were partially offset by increased sales
of the newer 8210 datalogger. In 1998 the Company
won two large international projects, a $912,000
project in Chile and a $1,584,000 project in India.
Revenues from these projects caused
international revenues to improve to $2,469,000 in
1998 from $1,366,000 in 1997, an increase of $1,103,000.
Revenues from contracts with the Air Force for FMQ-13
wind sensors, spares and repairs decreased to $291,000
in 1998 from $417,000 in 1997, a decrease of $126,000.
The Company's largest customer in each of 1998 and
1997 was the Department of the Interior, which accounted
for 35% and 57% of revenues, respectively. Commercial
and international revenues represented 50% of revenues
in 1998 versus 29% in 1997. Increased
commercial sales is attributed to two new products,
the EDACS certified 8210, which helped the Company
increase sales to hydropower companies and the Accububble,
which is a new water level monitoring Instrument, and
to a new division focused on providing engineering
and modeling services for the inspection of bridges.
Gross Profit. Gross profit for 1998 increased 2.5%
to $3,679,159 from $3,588,169 in 1997. Gross margin
as a percentage of revenues for 1998 increased to 37.2%
as compared to 36.1% in 1997. Cost overruns totaling
$220,000 on the SIMEPAR Brazil and McClellan
contracts hurt margins in 1997. Gross margins improved
in 1998 but not significantly as product sales carrying
higher margins decreased approximately $606,000 and were
offset by increased sales of services and non-standard products.
Selling, General and Administrative. Selling, general
and administrative expenses increased 10.5% to $2,102,954
in 1998 from $1,902,746 in 1997. Selling, general and
administrative expenses as a percentage of revenues
increased to 21.2% in 1998 from 19.1% in 1997 due to
increased selling expenses by the Integrated Services
Division and the addition of a network admininstrator.
Research and Development. Research and development
expenses increased 16.5% to $937,991 in 1998 from $805,027
in 1997, an increase of $132,964. Research and development
expenses as a percentage of revenues increased to 9.5%
in 1998 from 8.1% in 1997. In 1998 the Company developed
the AccuBubble, a water level monitoring instrument and
the EDACS certified 8210 which allows the 8210 to transmit
over Ericsson trunked radio systems used
primarily by municipalities and hydropower companies.
Other Income. In 1998 the Company sold its 4.2 acre lot
of land which was originally valued at $1,300,000 for
$700,000. Losses of approximately $806,000 had been
recognized in prior years resulting in a gain on the
sale of $206,000. This gain was offset
by a loss of $42,211 on an investment in GenCom, a
joint venture between Sutron and Virginia Energy Services.
Net Interest Expense. Interest expenses for
1998 decreased to $51,256 from $126,731 in 1997, a
decrease of $75,475. The decrease is attributed to
the Company's reduction of debt.
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.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1998, the Company's cash and cash
equivalents were $76,204, a decrease of $92,344 from
December 31, 1997. Cash used in operating activities
during 1998 was $265,138 as compared to cash generated
by operating activities of $733,004 in 1997 primarily
due to increased unbilled contract costs and
inventory. Cash used in investing activities
as of December 31, 1998 was $438,262 due primarily
to the purchase and implementation costs of a
new enterprise resource planning software system.
Cash provided from financing activities as of
December 31, 1998 was $611,056 as a result of
the land sale.
Working capital increased $982,724 to $2,716,851
at the end 1998 compared to $1,734,127 at the
end of fiscal 1997. The ratio of current assets
to current liabilities was 2.11 as of December 31, 1998,
compared to 1.77 as of December 31, 1997.
The Company has a revolving credit facility of
$2,000,000 and a capital equipment credit facility
of $400,000, of which $100,000 had been utilized
as of December 31, 1998. The terms of the credit
facility and capital equipment facility are until
July 1, 1999 and are subject to renewals thereafter.
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 1999.
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, 1998 and 1997, and the related
statements of operations, stockholders' equity (deficit), and cash flows
for each of the three years ended December 31, 1998, 1997 and 1996.
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 Corporationas of December 31, 1998 and 1997, and
the results of its operations and its cash flows for each
of the three years ended December 31, 1998, 1997 and 1996
in conformity with generally accepted accounting principles.
Thompson, Greenspon & Co.
Fairfax, Virginia
February 12, 1999
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
SUTRON CORPORATION
BALANCE SHEETS
<CAPTION>
December 31, December 31,
1998 1997
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 76,204 $ 168,548
Accounts receivable 1,761,262 1,804,525
Costs and estimated earnings
in excess of billings on
contracts in progress 1,136,910 402,523
Inventory 1,828,240 1,528,802
Prepaid items and other 368,870 71,670
Total current assets 5,171,486 3,976,068
Property, plant, and equipment
Furniture and equipment 1,727,986 1,298,789
Automotive equipment 30,849 30,849
Leasehold improvements 18,329 9,264
1,777,164 1,338,902
Accumulated depreciation
and amortization (1,241,053) (1,154,351)
Net property, plant, and
equipment 536,111 184,551
Investment - 493,118
Other assets 36,734 38,746
Total Assets $5,744,331 $4,692,483
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Accounts payable $ 752,286 $ 610,568
Accrued payroll 106,848 80,521
Other accrued expenses 732,655 415,021
Contract billings on contracts
in progress in excess of
costs and estimated earnings 117,192 169,238
Estimated losses on
uncompleted contracts 11,673 24,902
Income taxes payable - 110,359
Line of credit 650,571 573,171
Stockholder loans payable 55,000 80,000
Current maturities of
long-term notes 28,410 178,161
Total current liabilities 2,454,635 2,241,941
Long-term notes 75,000 100,688
Total liabilities 2,529,635 2,342,629
Stockholders' equity
Common stock, 42,984 42,259
Additional paid-in capital 2,316,236 2,282,866
Retained Earnings (Deficit) 855,476 24,729
Total stockholders' equity 3,214,696 2,349,854
Total liabilities and
stockholders' equity $5,744,331 $4,692,483
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF OPERATIONS
<CAPTION>
Year Ended December 31,
1998 1997 1996
<S> <C> <C> <C>
Revenue $9,887,578 $9,940,555 $8,689,068
Cost of sales 6,208,419 6,352,386 5,216,018
Gross profit 3,679,159 3,588,169 3,473,050
Selling, general and
administrative expenses 2,102,954 1,902,746 1,850,899
Research and development
expenses 937,991 805,027 547,617
Operating income 638,214 880,396 1,074,534
Other income 163,789 - -
Interest expense, net 51,256 126,731 162,848
Income before income taxes 750,747 753,665 911,686
Income taxes (80,000) 239,592 141,929
Net income $830,747 $514,073 $ 769,757
Net income per common share .20 .12 .18
Net Income per diluted share .20 .11 .18
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
<CAPTION>
COMMON PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAl
<S> <C> <C> <C> <C> <C>
Balance, 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
Balance, December
31, 1996 4,225,851 42,259 2,282,866 (489,344) 1,835,781
Net income for 1997 - - - 514,073 514,073
Balance, December
31, 1997 4,225,851 $42,259 $2,282,866 24,729 2,349,854
Retirement of
treasury shares (5,000) (50) (6,930) - (6,980)
Exercise of stock
options 77,500 775 40,300 - 41,075
Net income for 1998 830,747 830,747
Balances, December
31, 1998 4,298,351 $42,984 $2,316,236 $855,476 $3,214,696
<FN> See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
SUTRON CORPORTION
STATEMENTS OF CASH FLOWS <CAPTION>
Year Ended December 31,
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Cash flows from operating activities:
Net income 830,747 514,073 769,757
Non-cash items included in net income:
Depreciation and amortization 86,702 111,795 109,596
Gain (loss) on sale of equipment, net (206,882) 6,411
Changes in current assets and
liabilities:
Accounts receivables 43,263 (609,244) 324,490
Costs and estimated earnings in
excess of billings on contracts
in progress (734,387) 240,917 (262,114)
Inventory (299,438) 606,429 (1,182,860)
Prepaid items and other (297,200) (25,189) 10,659
Other assets 2,012 - -
Accounts payable 141,718 (284,956) 306,514
Accrued expenses 343,961 38,477 203,315
Contract billings in excess of
costs and estimated earnings (52,046) 6,536 (29,571)
Estimated losses on uncompleted
Contracts (13,229) 23,807 (9,798)
Income taxes payable (110,359) 110,359 -
Net cash provided by operating activities (265,138) 733,004 246,399
Cash flows from investing activities:
Purchase of property and equipment (438,262) (101,156) (71,913)
Proceeds from sale of investment 700,000 - -
Net cash used by investing activities 261,738 (101,156) (71,913)
Cash flows from financing activities:
Proceeds from issuance of common stock 34,095 - -
Proceeds from line of credit, net 77,400 - 170,000
Proceeds from term notes payable 100,000 - -
Payments on line of credit, net - (331,829) -
Payments on term notes payable (271,939) (194,283) (300,000)
Payments on installment loans (3,500) (16,158) (5,405)
Payments on stockholder loans (25,000) - (10,000)
Net cash used by financing activities (88,944) (542,270) (145,405)
Net increase (decrease) in cash and
cash equivalents (92,344) 89,578 29,081
Cash and cash equivalents, beginning
of year 168,548 78,970 49,889
Cash and cash equivalents, end of year 76,204 168,548 78,970
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
SUTRON CORPORATION
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of 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, and hydropower companies.
Revenue Recognition
The Company utilizes the accrual method of
accounting for both financial statement and tax
return reporting purposes. The Company recognizes
revenue from product sales upon shipment. Selling,
general, and administrative expenses are charged
against periodic income as incurred. 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 $59,808 in 1998,
$117,438 in 1997, and $160,637 in 1996. Income
taxes paid amounted to $130,627 in 1998, $167,180
in 1997, and $162,350 in 1996.
Accounts Receivable
The Company has had no material bad debts. Because
management considers all accounts to be fully
collectible, no provision has been made
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 assets for the expected future tax consequences
of events that have been recognized in the Company's
financial statements or tax returns.
The assets 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 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 $75,000 at December 31, 1998.
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.
Capital
The Company has 12,000,000, $.01 par value, shares
authorized. There were 4,298,351 shares issued and
outstanding at December 31, 1998 and 4,225,851
issued and outstanding in 1997.
The Company's Board of Directors has authorized the
repurchase of up to 100,000 shares of its common
stock in open market transactions. As of
December 31, 1998 5,000 shares have been repurchased.
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 earnings 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. Contracts to issue common
stock which are anti dilutive in nature are not
included in the earnings per share calculations.
<TABLE>
<CAPTION>
1998 1997 1996
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>
Basic EPS
Income available
to common
stockholders $830,747 4,234,741 $.20 $514,073 4,225,851 $.12 $769,757 4,225,851 $.18
Effect of Dilutive
Securities
Stock options
Unexercised - 1,431 - 121,013 - 130,568
Dilutive EPS
Income available
to common
stockholders
plus assumed
conversions $830,747 4,236,172 $.20 $514,073 4,346,864 $.11 $769,757 4,356,419 $.18
</TABLE>
2. CONTRACTS IN PROGRESS
Information with respect to contracts in progress at
December 31, is as follows:
<TABLE>
1998 1997
<S> <C> <C>
Direct and indirect costs, including overhead $2,452,822 $2,803,879
Earnings (loss) 317,626 (123,978)
Totals $2,770,448 $2,697,901
Billings $1,645,211 $2,320,280
Costs and estimated earnings in excess of
billings 1,136,910 402,523
Estimated losses on contracts in process (11,673) (24,902)
Totals $2,770,448 $2,697,901
</TABLE>
3. INVENTORY
Inventory consists of the following at December 31:
<TABLE>
1998 1997
<S> <C> <C>
Electronic components $ 691,921 $ 748,200
Work in process 787,137 525,353
Finished goods 349,182 255,249
Totals $1,828,240 $ 1,528,802
</TABLE>
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.
4. ACCUMULATED DEPRECIATION AND AMORTIZATION
Accumulated depreciation and amortization at
December 31, is as follows:
1998 1997
Furniture and equipment $1,209,132 $1,133,356
Automotive equipment 21,750 12,617
Leasehold improvements 10,171 8,378
Totals $1,241,053 $1,154,351
5. INVESTMENT
Land, including related improvements and
architectural fees, was originally acquired as
a future plant site. In July, 1998, the Company
sold the property for $700,000. The resulting
gain of $206,106 is included in other income.
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 July 1, 1999, and the
outstanding balance at December 31, 1998, amounted
to $650,571 and was $573,171 at December 31, 1997.
7. TERM NOTE PAYABLE
The Company repaid the original loan and security
agreement during 1998 with the proceeds from the
sale of the land investment. The Company borrowed
an additional $100,000 in December, 1998. The
note calls for monthly payments of principal of
$2,083 and accrued interest. The interest rate
is 8.35 percent and matures in December, 2002.
Additionally, the note agreement contains
certain financial covenants. 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:
1999 $675,571
2000 25,000
2001 25,000
2002 25,000
Total $750,571
8. STOCKHOLDER LOANS PAYABLE
At December 31, 1998, the Company had a promissory
note totaling $55,000 payable on demand to one
officer of the Company. The promissory note is
expected to be repaid in 1999 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 $160,000 for 1998,
$152,000 for 1997, and $144,000 for 1996.
The Company entered into a lease agreement for
office space and a repair facility in Boise, Idaho.
The three year lease, expiring in November, 2001,
calls for monthly payments of $1,250 and annual rent
increases of four percent.
The following is a schedule, by years, of
future minimum payments due:
Year ending December 31:
1999 $175,400
2000 180,800
2001 186,324
2002 175,200
2003 45,125
Total $762,849
10. INCOME TAXES
The income tax (benefit) expense charged to
operations for the years ended December 31, were as follows:
<TABLE>
1998 1997 1996
<S> <C> <C> <C>
Current income tax (benefit) expense $(40,000) $269,592 $141,929
Deferred tax benefit (40,000) (30,000) -
Total tax (benefit) expense $(80,000) $239,592 $141,929
Deferred tax assets, are comprised of the
following at December 31:
1998 1997 1996
Investment $ - $ 307,000 $ 307,000
Estimated losses on contracts 4,000 10,000 -
Accrued vacation and warranty 88,000 50,000 29,000
Gross deferred tax assets 92,000 367,000 336,000
Gross deferred tax liability -
depreciation (22,000) (18,000) (23,000)
Net 70,000 349,000 313,000
Deferred tax asset valuation
allowance - (319,000) (313,000)
Net deferred tax asset $ 70,000 $ 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>
1998 1997 1996
<S> <C> <C> <C>
Income before income taxes $ 830,747 $753,665 $ 911,686
Applicable statutory tax rate 34% 34% 34%
Computed "expected" Federal tax
expense 282,500 256,000 310,000
Adjustments to Federal income tax
resulting from:
State income tax - 15,000 18,000
Tax credits (43,500) (37,408) (61,071)
Change in valuation allowance (319,000) 6,000 (125,000)
Income tax (benefit) expense $ (80,000) $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:
1998 1997 1996
Department of Interior 35% 57% 39%
International 29% 14% 35%
Commercial 21% 10% 10%
12. STOCK OPTION PLANS
Stock Options
The Company has granted stock options under
the 1998 and the 1996 Stock Option Plans 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. The Company authorized
60,000 shares and granted 5,000 shares under
the 1998 stock option plan. All options have
a ten year term from the date of grant. The
following summarizes the option activity under
the 1998 and 1996 Stock Option Plans for the
last three years:
<TABLE>
<CAPTION>
Number of Option Price
Shares Per Share
<S> <C> <C>
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
Grants 5,000 1.44
Exercised (77,500) .53
Canceled or expired (25,000) .53
Outstanding, December 31, 1998 264,000 $1.125 - 1.44
</TABLE>
The vesting period of the remaining options
is as follows:
Vested and exercisable 103,600
November 1, 1999 52,800
November 1, 2000 52,800
November 1, 2001 52,800
November 1, 2002 1,000
November 1, 2003 1,000
264,000
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 Statement No. 25 and related interpretations
in accounting for its employee compensation 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>
1998 1997 1996
<S> <C> <C> <C>
Net income
As reported $830,747 $514,073 $769,757
Pro forma 796,747 481,534 737,218
Earnings per share
As reported .20 .12 .18
Pro forma .20 .11 .18
</TABLE>
The fair value of the options granted in 1998
amounted to $7,000 and $120,000 in 1996.
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: 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 $147,000 for 1998, $128,000 for 1997, and
$92,660 for 1996.
14. EXPORT SALES
Export sales from the Company's operations
were as follow (in thousands):
<TABLE>
<CAPTION>
Year ended December 31,
1998 1997 1996
<S> <C> <C> <C>
Central and South America $ 887 $ 534 $1,844
Canada 371 307 765
Asia 1,310 312 321
Australia/New Zealand 57 25 9
Europe and other 257 188 75
$2,882 $1,366 $3,014
</TABLE>
15. SEGMENT INFORMATION
The Company adopted SFAS No. 131, Disclosures
About Segments of an Enterprise and Related
Information, in 1998 which changes the way
the Company reports information about its segments.
The Company currently reports its results in
two divisions, Hydromet Products and Integrated
Systems. Hydromet Products division produces
Sutron's standard environmental monitoring products
including dataloggers. The Integrated Systems
division produces integrated systems of Sutron
products with software, installation, training
and special parts.
(In Thousands)
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Revenue
Hydromet Products $8,141 $8,747 $7,566
Integrated Systems 1,746 1,193 1,123
Totals $9,887 $9,940 $8,689
Cost of Goods Sold
Hydromet Products $4,848 $5,200 $4,401
Integrated Systems 1,360 1,152 815
Totals $6,208 $6,352 $5,216
Gross Margin
Hydromet Products $3,293 $3,547 $3,165
Integrated Systems 386 41 308
Totals $3,679 $3,588 $3,473
</TABLE>
<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 6, 1999 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, 1998, the positions and offices with
the Company held by them, the date they first became officers,
and their ages at December 31, 1998:
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, 1999
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, 1999
By
/s/ Raul S. McQuivey
Raul S. McQuivey,
President
and Director
(Principal
Executive and
Financial
Officer)
Date: March 31, 1999
By
/s/ Thomas N. Keefer
Thomas N. Keefer,
Director
Date: March 31, 1999
By
/s/ Daniel W. Farrell
Daniel W. Farrell,
Vice
President and
Director
Date: March 31, 1999
By
/s/ Glenn A. Conover
Glenn A. Conover,
Vice
President and
Director
Date: March 31, 1999
By
/s/ Ronald C. Dodson
Ronald C. Dodson
Director
Date: March 31, 1999
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-31-98
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 76204
<SECURITIES> 0
<RECEIVABLES> 1761262
<ALLOWANCES> 0
<INVENTORY> 1828240
<CURRENT-ASSETS> 5171486
<PP&E> 1777164
<DEPRECIATION> 1241053
<TOTAL-ASSETS> 5744331
<CURRENT-LIABILITIES> 2454635
<BONDS> 0
<COMMON> 42984
0
0
<OTHER-SE> 3171712
<TOTAL-LIABILITY-AND-EQUITY> 5744331
<SALES> 9887578
<TOTAL-REVENUES> 9887578
<CGS> 6208419
<TOTAL-COSTS> 6208419
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 51256
<INCOME-PRETAX> 750747
<INCOME-TAX> (80000)
<INCOME-CONTINUING> 830747
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 830747
<EPS-BASIC> .20
<EPS-DILUTED> .20
</TABLE>
