Sutron Reports Second Quarter 2013 Results

Marketwired

STERLING, VA--(Marketwired - Aug 13, 2013) -  Sutron Corporation (NASDAQ: STRN) today announced results for the second quarter and six months ended June 30, 2013.

Second Quarter 2013 Highlights

  • Revenue of $6.3 million, down 2% from Q1 2013
  • Backlog of $14.6 million, up 11% from Q1 2013
  • Cash of $7.1 million, up 42% from Q1 2013

First Half 2013 Highlights

  • Record Revenue of $12.8 million, up 21% from prior year period
  • Backlog of $14.6 million as of mid-year, up 11% from prior year period

Sutron reported revenue of $6.3 million for the second quarter of 2013, down 7% from $6.8 million in the second quarter of 2012. This decrease was primarily driven by decreased international project activity. The net loss for the second quarter of fiscal year 2013 was $53,170 compared to net income of $551,670 in the second quarter of fiscal year 2012. This result was primarily due to the impact of the decline in revenue and to increased research and development investments. The Company reported a second quarter loss of $0.01 per basic and diluted share as compared to earnings of $0.12 per basic share and $0.11 per diluted share in the second quarter of 2012. 

For the first six months of calendar year 2013, Sutron recorded record revenue of $12.8 million, a 21% increase compared to $10.5 million during the first six months of 2012. Sutron reported a net loss of $22,968 for the first six months of 2013 compared to $475,561 of net income for the same period of 2012. The first six months loss results in $0.00 per basic and diluted share as compared to earning $0.10 per basic share and $0.09 per diluted share in the first six months of 2012. 

The Company's backlog as of June 30, 2013 was approximately $14.6 million, up 11% from the backlog as of June 30, 2012.

Balance Sheet and Liquidity

Sutron ended the second quarter of 2013 with $7.1 million in cash and cash equivalents, up from $5 million at March 31, 2013. Cash generated by operating activities during the first six months of 2013 was $167,222 as compared to cash generated by operating activities through the first six months of 2012 of $394,908. Capital expenditures were $164,747 for the first six months of 2013 compared to $30,264 for the first six months of 2012. As a consequence, Free Cash Flow for the first six months of 2013 was $2,475 compared to Free Cash Flow of $364,644 for the first six months 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. 

Management Commentary

Raul McQuivey, Chairman and Chief Executive Officer, said, "We have been affected this year by a perceptible slowdown in international project tender activity as well as the cancellation of some tenders prior to anticipated awards. While our second quarter results were largely impacted by these developments, we are encouraged by our record first six month's revenue of $12.8 million and our backlog of $14.6 million. After funding our recent acquisitions of Sabio and MeteoStar with cash, we have been able to build back to a strong cash balance of $7.1 million. We also continue to invest in new product development in these new divisions and, while this has increased our expenses in the near term, we anticipate that these investments will contribute to increased profitability in the upcoming quarters. As evidenced by this quarter's results, 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."

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
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
    Three Months Ended June 30,
    2013     2012
Revenue   $ 6,343,240     $ 6,804,168
Cost of goods sold     3,987,068       4,027,666
  Gross profit     2,356,172       2,776,502
Operating expenses:              
  Selling, general and administrative expenses     1,467,134       1,347,544
  Research and development expenses     976,254       627,633
  Total operating expenses     2,443,388       1,975,177
  Operating income (loss)     (87,216 )     801,325
Financing income, net     6,046       15,345
  Income (loss) before income taxes     (81,170 )     816,670
Income tax expense (benefit)     (28,000 )     265,000
Net income (loss)   $ (53,170 )   $ 551,670
Net income (loss) per share:              
  Basic income (loss) per share   $ (0.01 )   $ 0.12
  Diluted income (loss) per share   $ (0.01 )   $ 0.11
               
               
               
SUTRON CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
    Six Months Ended June 30,
    2013     2012
Revenue   $ 12,798,350     $ 10,541,349
Cost of goods sold     7,796,037       6,338,255
  Gross profit     5,002,313       4,203,094
Operating expenses:              
  Selling, general and administrative expenses     3,101,137       2,352,360
  Research and development expenses     1,946,393       1,180,901
  Total operating expenses     5,047,530       3,533,261
  Operating income (loss)     (45,217 )     669,833
Financing income, net     9,249       26,728
  Income (loss) before income taxes     (35,968 )     696,561
Income tax expense (benefit)     (13,000 )     221,000
Net income (loss)   $ (22,968 )   $ 475,561
Net income per share:              
  Basic income per share   $ 0.00     $ 0.10
  Diluted income per share   $ 0.00     $ 0.09
               
               
               
SUTRON CORPORATION  
CONSOLIDATED BALANCE SHEETS  
   
    (Unaudited)     (Audited)  
    June 30,     December 31,  
2013     2012  
                 
ASSETS                
Current Assets:                
  Cash and cash equivalents   $ 6,322,489     $ 7,576,374  
  Restricted cash and cash equivalents     818,453       810,396  
  Accounts receivable, net     5,597,267       5,771,013  
  Inventory     4,893,888       4,291,505  
  Prepaid items and other assets     310,445       248,546  
  Income taxes receivable     1,277,154       1,202,709  
  Deferred income taxes     745,000       666,000  
    Total Current Assets     19,964,696       20,566,543  
Property and Equipment, Net     1,679,802       1,698,218  
Other Assets                
  Goodwill     4,754,152       3,768,435  
  Intangibles, net of amortization     714,463       781,633  
  Other Assets     90,799       95,217  
    Total Assets   $ 27,203,912     $ 26,910,046  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current Liabilities:                
  Accounts payable   $ 1,149,407     $ 1,300,917  
  Accrued payroll     349,524       464,942  
  Deferred revenue     556,979       531,397  
  Other accrued expenses     1,431,795       1,134,279  
  Billings in excess of costs and estimated earnings     539,344       306,148  
    Total Current Liabilities     4,027,049       3,737,683  
Long-Term Liabilities                
  Deferred rent     886,672       1,006,893  
  Deferred income taxes     145,000       39,000  
    Total Long-term Liabilities     1,031,672       1,045,893  
    Total Liabilities     5,058,721       4,783,576  
Stockholders' Equity                
  Common stock, 12,000,000 shares authorized; 5,069,009 and 5,039,632 issued and outstanding     50,469       50,397  
  Additional paid-in capital     5,283,259       5,185,325  
  Retained earnings     17,050,383       17,073,351  
  Accumulated other comprehensive loss     (238,920 )     (182,603 )
    Total Stockholders' Equity     22,145,191       22,126,470  
    Total Liabilities and Stockholders' Equity   $ 27,203,912     $ 26,910,046  
                 
                 
                 
SUTRON CORPORATION  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Unaudited)  
   
    Six Months Ended June 30,  
    2013     2012  
Cash Flows from Operating Activities:                
Net income (loss)   $ (22,968 )   $ 475,561  
Noncash items included in net income:                
  Depreciation and amortization     259,850       143,365  
  Deferred income taxes     36,000       (32,134 )
  Stock based compensation     80,080       44,364  
  Tax benefit from stock options exercised     (12,996 )     (9,873 )
Change in current assets and liabilities:                
  Accounts receivable     256,599       323,534  
  Inventory     (435,285 )     (639,217 )
  Prepaid items and other assets     (58,632 )     (153,153 )
  Income taxes receivable     (61,449 )     67,636  
  Accounts payable     (151,510 )     (55,571 )
  Accrued expenses     138,976       (124,933 )
  Deferred revenues     25,582       174,860  
  Billings in excess of costs and estimated earnings     233,196       282,572  
  Deferred rent     (120,221 )     (102,103 )
Net Cash Provided by Operating Activities     167,222       394,908  
Cash Flows from Investing Activities:                
  Restricted cash and cash equivalents     (8,057 )     (131,551 )
  Purchase of property and equipment     (164,747 )     (30,264 )
  Certificate of deposit     -       (1,933 )
  Other assets     4,418       5,093  
  Business Acquisition     (1,214,330 )     (4,241,914 )
Net Cash Used by Investing Activities     (1,382,716 )     (4,400,569 )
Cash Flows from Financing Activities:                
  Tax benefit from stock options exercised     12,996       9,873  
  Proceeds from stock options exercised     4,930       89,000  
Net Cash Provided by Financing Activities     17,926       98,873  
Effect of exchange rate changes on cash and cash equivalents     (56,317 )     (17,601 )
Net increase (decrease) in cash and cash equivalents     (1,253,885 )     (3,924,389 )
Cash and Cash Equivalents, beginning of period     7,576,374       8,737,543  
Cash and Cash Equivalents, end of period   $ 6,322,489     $ 4,813,154  
                 
Contact:
Company
Sidney Hooper
+1 (703)406-2800
Email Contact
www.sutron.com
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