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SUTRON CORP
Symbol U : STRN
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Sutron Reports First Quarter 2013 Results

2013-05-07 18:51 ET - News Release

STERLING, VA -- (Marketwired) -- 05/07/13

Sutron Corporation (NASDAQ: STRN) today announced results for the first quarter ended March 31, 2013.

First Quarter 2013 Highlights

  • Revenue increased 73% to a first quarter record of $6.5 million

  • Net Income increased 140% to $30,202

  • EBITDA increased 632% to $171,924

  • Completed acquisition of Sabio Instruments on March 6, 2013

Sutron reported record revenue of $6.5 million for the first quarter of 2013, up 73% from $3.7 million in the first quarter of 2012. The drivers of the increase were $1.7 million in revenue generated from our MeteoStar Division (acquired in May 2012), an increase of approximately $350,000 in standard product revenues and an increase of approximately $567,000 in systems revenues. Our new Sabio Division, which was acquired on March 6, 2013, contributed revenues of approximately $74,000 for the quarter.

Net income for the first quarter of fiscal year 2013 was $30,202, an increase of 140% compared to a net loss of $76,109 in the first quarter of fiscal year 2012. Earnings per share were $0.01 per basic and diluted share as compared to a loss of $0.02 per share in the first quarter of 2012. Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") were approximately $172,000 as compared to negative EBITDA of approximately $32,000 in the first quarter of 2012.

The Company's backlog as of March 31, 2013 was approximately $13.2 million, up 6% from the backlog as of March 31, 2012.

Balance Sheet and Liquidity

Sutron ended the first quarter of 2013 with $5 million in cash and cash equivalents, down from $8.4 million at December 31, 2012. Cash used by operating activities in the first quarter of 2013 was $2.1 million as compared to cash generated by operating activities in the first quarter of 2012 of $1.9 million. The principal components of the use of cash in the first quarter of 2013 were the build-up of accounts receivable (approximately $1.5 million) and increase in supplier prepayments (approximately $614,000). Capital expenditures were $95,108 in the first quarter of 2013 compared to $0 in the first quarter of 2012.

As a consequence, Free Cash Flow in the first quarter of 2013 was negative in the amount of $2,153,747 compared to Free Cash Flow of $1,875,341 in the first quarter of 2012. Sutron defines Free Cash Flow as net cash provided or used by operating activities less cash used in the purchase of property and equipment.

Cash used during the first quarter of fiscal year 2013 to acquire Sabio Instruments was approximately $1.2 million. Cash used to acquire Sabio is reflected in investing activities in the statement of cash flows.

Management Commentary

"We are encouraged by our first quarter results, especially to report record first quarter revenue of $6.5 million, up 73% from the prior year quarter," noted Raul McQuivey, Chairman and Chief Executive Officer. "The revenue increase was derived from strong organic growth as well as from recent acquisitions. Our focus in 2013 will again be to drive revenue growth and also to achieve steady improvement in our operating margins and net income. We are able to pursue new opportunities domestically and internationally to cross-market our diverse portfolio of products, systems and software that have been significantly enhanced through our newly-acquired MeteoStar and Sabio Divisions. Our business remains highly project driven through competitive tender and, thus, we expect periodic fluctuations in bookings and revenue due to the uncertain timing of governmental approval and funding processes."

Conference Call

The Company will host a conference call on May 8, 2013 at 1:45 p.m. Eastern Time during its Annual Shareholders Meeting to discuss its recent acquisitions, its strategic direction and focus and to review the results for fiscal year 2012 and the first quarter of 2013. The conference call can be accessed via https://global.gotomeeting.com/join/985676629 or by dialing (213) 289-0012, Access Code: 985-676-629 (Audio PIN: Shown after joining the meeting, Meeting ID: 985-676-629).

About Sutron

Sutron Corporation, headquartered in Sterling, Virginia, is a project driven business. We provide hydrological, meteorological, oceanic and aviation real-time data collection products, systems, software and services to a diversified customer base of federal, state, local and foreign governments, engineering companies, universities, hydropower companies and other commercial entities. Our quarterly results may fluctuate substantially based upon contract awards that are difficult to project in terms of timing and may be delayed due to differing time frames in securing government approvals and funding.

Safe Harbor Statement

The statements in this press release that relate to future plans, events or performance are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. Forward-looking statements include without limitation any statements regarding our expected future financial position, results of operations, cash flows, EBITDA, financing plans, business strategy, bookings, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "should" and other similar expressions are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. We are under no obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.



                             Sutron Corporation
                Unaudited Consolidated Statements of Income

                                                     Three Months Ended
                                                          March 31,
                                                 --------------------------
                                                     2013          2012
                                                 ------------  ------------

Net revenues                                     $  6,455,110  $  3,737,181

Cost of revenues                                    3,808,969     2,310,589

                                                 ------------  ------------
    Gross profit                                    2,646,141     1,426,592
                                                 ------------  ------------
Operating expenses:
  Selling, general and administrative expenses      1,634,003     1,004,816
  Research and development expenses                   970,139       553,269
                                                 ------------  ------------
    Total operating expenses                        2,604,142     1,558,085
                                                 ------------  ------------
    Operating income                                   41,999      (131,493)
Financing income, net                                   3,203        11,384
                                                 ------------  ------------
    Income before income taxes                         45,202      (120,109)
Income tax expense                                     15,000       (44,000)
Net income                                       $     30,202  $    (76,109)
                                                 ============  ============
Net income per share:
    Basic income per share                       $       0.01  $      (0.02)
                                                 ------------  ------------
    Diluted income per share                     $       0.01  $      (0.02)
                                                 ------------  ------------



                             Sutron Corporation
                        Consolidated Balance Sheets

                                                  (Unaudited)    (Audited)
                                                   March 31,   December 31,
                                                     2013          2012
                                                 ------------  ------------

ASSETS
Current Assets:
  Cash and cash equivalents                      $  4,293,399  $  7,576,374
  Restricted cash and cash equivalents                748,696       810,396
  Accounts receivable, net                          7,301,877     5,771,013
  Inventory                                         4,608,824     4,291,505
  Prepaid items and other assets                      885,577       248,546
  Income taxes receivable                           1,230,177     1,202,709
  Deferred income taxes                               711,000       666,000
                                                 ------------  ------------
    Total Current Assets                           19,779,550    20,566,543

Property and Equipment, Net                         1,706,503     1,698,218
                                                 ------------  ------------
Other Assets
  Goodwill                                          4,754,152     3,768,435
  Intangibles, net of amortization                    748,048       781,633
  Other Assets                                         93,758        95,217
                                                 ------------  ------------
    Total Assets                                 $ 27,082,011  $ 26,910,046
                                                 ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                               $  1,361,115  $  1,300,917
  Accrued payroll                                     245,668       464,942
  Deferred revenue                                    446,870       531,397
  Other accrued expenses                            1,349,907     1,134,279
  Billings in excess of costs and estimated
   earnings                                           437,865       306,148
                                                 ------------  ------------
    Total Current Liabilities                       3,841,425     3,737,683
Long-Term Liabilities
  Deferred rent                                       921,443     1,006,893
  Deferred income taxes                                98,000        39,000
                                                 ------------  ------------
    Total Long-term Liabilities                     1,019,443     1,045,893
                                                 ------------  ------------
    Total Liabilities                               4,860,868     4,783,576
                                                 ------------  ------------
Stockholders' Equity
  Common stock, 12,000,000 shares authorized;
   5,057,009 and 5,039,632 issued and
   outstanding                                         50,469        50,397
  Additional paid-in capital                        5,245,707     5,185,325
  Retained earnings                                17,103,553    17,073,351
  Accumulated other comprehensive loss               (178,586)     (182,603)
                                                 ------------  ------------
    Total Stockholders' Equity                     22,221,143    22,126,470
                                                 ------------  ------------
    Total Liabilities and Stockholders' Equity   $ 27,082,011  $ 26,910,046
                                                 ============  ============



                             Sutron Corporation
              Unaudited Consolidated Statements of Cash Flows

                                                     Three Months Ended
                                                          March 31,
                                                 --------------------------
                                                     2013          2012
                                                 ------------  ------------
Cash Flows from Operating Activities:
Net income                                       $     30,202  $    (76,109)
Noncash items included in net income:
  Depreciation and amortization                       129,925        99,182
  Deferred income taxes                                23,000       (12,000)
  Stock based compensation                             42,528        24,978
  Tax benefit from stock options exercised            (12,996)       (3,093)
Change in current assets and liabilities:
  Accounts receivable                              (1,448,011)    2,601,836
  Inventory                                          (150,221)     (701,607)
  Prepaid items and other assets                     (633,764)        6,754
  Income taxes receivable                             (14,472)     (165,499)
  Accounts payable                                     60,198       105,867
  Accrued expenses                                    (46,768)     (146,482)
  Deferred revenues                                   (84,527)       (9,853)
  Billings in excess of costs and estimated
   earnings                                           131,717       147,063
  Deferred rent                                       (85,450)        2,211
                                                 ------------  ------------
Net Cash Provided (Used) by Operating Activities   (2,058,639)    1,873,248
                                                 ------------  ------------
Cash Flows from Investing Activities:
  Restricted cash and cash equivalents                 61,700        34,274
  Purchase of property and equipment                  (95,108)        2,093
  Certificate of deposit                                    -          (966)
  Other assets                                          1,459         3,606
  Acquisition and goodwill                         (1,214,330)            -
                                                 ------------  ------------
Net Cash Provided (Used) by Investing Activities   (1,246,279)       39,007
                                                 ------------  ------------
Cash Flows from Financing Activities:
  Tax benefit from stock options exercised             12,996         3,093
  Proceeds from stock options exercised                 4,930        22,250
                                                 ------------  ------------
Net Cash Provided (Used) by Financing Activities       17,926        25,343
                                                 ------------  ------------
Effect of exchange rate changes on cash and cash
 equivalents                                            4,017        35,621
                                                 ------------  ------------
Net increase (decrease) in cash and cash
 equivalents                                       (3,282,975)    1,973,219
Cash and Cash Equivalents, beginning of period      7,576,374     8,737,543
                                                 ------------  ------------
Cash and Cash Equivalents, end of period         $  4,293,399  $ 10,710,762
                                                 ============  ============

Company Contact:
Sidney Hooper
+1 (703)406-2800
Email Contact
www.sutron.com

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