SOURCE: Sutron Corporation

Sutron Corporation

March 28, 2014 11:00 ET

Sutron Corporation Reports Fourth Quarter & Full Year 2013 Results

STERLING, VA--(Marketwired - Mar 28, 2014) - Sutron Corporation (NASDAQ: STRN)

  • 2013 Record Net Revenue of $27.2M, Up 8% From Prior Year
  • Q4 Net Revenue of $7.3M, Down 3% From Prior Year's Quarter
  • 2013 Net Income of $795,905, Down 30% From Prior Year
  • Q4 Net Income of $331,898, Up 88% From Prior Year's Quarter
  • Cash in Hand of $9.1M at the end of 2013, Up 8% From Prior Year
  • 2013 Free Cash Flow of $1.96M, Up 48% From Prior Year

Sutron Corporation, a leading provider of hydrological, meteorological, oceanic and aviation monitoring products, systems, software and services, announced results for the fourth quarter and full year ended December 31, 2013.

Raul McQuivey, Chairman and Chief Executive Officer, stated, "We are encouraged by our second consecutive year of record revenue, particularly during a year in which there was a slowdown in international tender activity and the domestic market felt the impact of sequestration and the U.S. Government shutdown. The revenue contributions from our new MeteoStar and Sabio divisions provided some lift. While maintaining desired profitability margins has been a challenge, we continue to invest resources to develop new products and enhance existing products that we believe present solid growth opportunities for Sutron and which we believe will enhance profitability in future years. We also continue to look for strategic investments and acquisitions that complement our existing product offerings.

"I am confident that Sutron, and Sutron products, make a significant contribution to the customers we serve. We are passionate about delivering products and services that are considered 'leading edge' and that help our customers monitor many aspects of our global environment.

"Our continued priorities are revenue growth, steady improvement in operating margins and net income and maintaining a strong balance sheet. Fourth quarter, revenue was $7.3 million, down 3% from the prior year quarter, but we had strong full-year revenue growth of $27.2M in 2013.

"We believe the life-blood of our organization is our ability to bring innovative products to our customers and to educate and reach more customers through our sales and marketing efforts. We have invested resources in both of these areas and anticipate bringing new products to market during 2014 and expanding our reach to existing customers as well as winning new customers."

Consolidated Results

Continuing Sutron operations are presented below:

Quarter Ended December 31, 2013

Net Revenue was $7.3 million for the fourth quarter of 2013, a decrease of 3% from $7.6 million in the fourth quarter of 2012. Several projects the Company was expecting to close and deliver by year-end were delayed causing the small decrease in revenue compared to 2012 fourth quarter.

Gross Profit was $2.9 million, or 40% of net revenue, as compared to $2.9 million, or 37% of net revenue, in the fourth quarter of 2012. An increase in our Hydromet standard products sales as well as increased margin on some year-end projects in our MeteoStar Division resulted in the stronger gross margin as a percentage of sales compared to the fourth quarter of 2012.

Operating Expenses were $2.3 million, or 32% of net revenue, as compared to $2.9 million, or 24% of net revenue, in the fourth quarter of 2012. The decrease was primarily due to adjustments made to reserves in our warranties, sales commissions, and obsolete inventories.

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") was approximately $796,000 in the fourth quarter of 2013 as compared to EBITDA of approximately $188,000 in the fourth quarter of 2012. The increase in EBITDA is attributable to the projects won, and largely completed, in the last quarter of 2013 as well as increased operating expenses in the fourth quarter of 2012 that did not recur in 2013.

Net Income was $332,898, or $.07 per basic and $.06 per diluted common share for the fourth quarter of 2013, compared to net income of $176,787, or $.04 per basic and diluted common share, in the fourth quarter of 2012. The number of shares outstanding used to calculate basic and diluted earnings per common share in the fourth quarter of 2013 were 5.07 and 5.12 million, respectively, compared to 4.97 and 5.06 million, respectively, for basic and diluted earnings per common share in the fourth quarter of 2012.

Year Ended December 31, 2013

Net revenue for the year ended December 31, 2013 was $27.2M, an increase of 8% from $25.2 in 2012. Organic sales were $20.1M, down 8% from $21.9M in 2012. MeteoStar generated $5.8M of revenues for the first full year of Sutron's ownership of MeteoStar. Sabio generated $1.3M of revenues for the 10 months of 2013 Sutron owned Sabio.

Gross profit for the year ended December 31, 2013 was $10.8M, or 40% of net revenue, as compared to $10M, or 40% of net revenue, in 2012.

Operating expenses were $9.6M, or 35% of net revenue, as compared to $8.7M, or 34% of net revenue, in 2012. The increase was primarily due to 2013 MeteoStar and Sabio operating costs of $3.2M and increased legal and professional fees of approximately $375,000. These increases were partially offset by adjustments to our reserves for warranties, sales commissions, and obsolete inventory.

EBITDA for the year ended December 31, 2013 was approximately $1.78M, or 6.5% of net revenues, as compared to EBITDA of approximately $1.75M, or 7% of net revenues, in 2012.

Net Income was $795,905, or $.16 per basic and diluted common share, compared to net income of $1,142,800, or $.24 per basic and $.23 per diluted common share, in 2012. The number of shares outstanding used to calculate basic and diluted earnings per common share in 2013 were 5.05 and 5.11 million, respectively, compared to 4.80 and 4.89 million, respectively, for basic and diluted earnings per common share in 2012.

Balance Sheet, Liquidity and Capital Resources

Sutron ended 2013 with $9.1 million in cash and cash equivalents, up from $8.4 million at the end of 2012. For the year ended December 31, 2013, cash generated by operating activities was $2,178,449 as compared to cash generated by operating activities of $1,506,368 in 2012. For the year ended December 31, 2013, capital expenditures were $214,183 as compared to $179,131 in 2012.

Free Cash Flow for the year ended December 31, 2013 was $1,964,266 as compared to Free Cash Flow of $1,327,237 in 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.

ABOUT SUTRON CORPORATION

Sutron Corporation, headquartered in Sterling, Virginia, is a project driven business. 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. We provide hydrological, meteorological, air quality, 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 and hydropower companies. Over 70,000 Sutron stations have been installed worldwide. We manufacture our dataloggers, satellite transmitters and sensors. Our product and systems are designed to offer commonality of components and uniform interfaces in order to build modular, open, distributed systems that provide excellent performance regardless of the number of sensors or field stations.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

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 FINANCIAL SUMMARY  
FINANCIAL SUMMARY  
  (Unaudited)  
  For the Three Months  
  Ended December 31,  
HIGHLIGHTS OF OPERATING RESULTS 2013   2012  
         
Revenues $ 7,285,363   $ 7,646,114  
Cost of sales   4,380,503     4,794,058  
Gross profit   2,904,860     2,852,056  
Operating expenses   2,301,030     2,850,096  
Operating income   603,830     1,961  
Interest and other income   23,051     30,826  
Income before income taxes   626,881     32,787  
Income tax expense (benefit)   294,983     (144,000 )
Net income $ 331,898   $ 176,787  
PER SHARE AMOUNTS:            
Basic income per share $ 0.07   $ 0.04  
Diluted income per share $ 0.06   $ 0.04  
             
             
             
       
   
For the Year Ended
 
    Ended December 31,  
HIGHLIGHTS OF OPERATING RESULTS   2013     2012  
             
Revenues $ 27,208,304   $ 25,229,519  
Cost of sales   16,424,127     15,212,433  
Gross profit   10,424,127     10,017,086  
Operating expenses   9,563,180     8,660,069  
Operating income   1,220,997     1,357,017  
Interest and other income   46,892     74,783  
Income before income taxes   1,267,889     1,431,800  
Income tax expense (benefit)   471,984     289,000  
Net income $ 795,905   $ 1,142,800  
PER SHARE AMOUNTS:            
Basic income per share $ 0.16   $ 0.24  
Diluted income per share $ 0.16   $ 0.23  
             
             
   
   
Balance Sheets
 
  December 31,   December 31,  
2013   2012  
         
ASSETS        
Current Assets:        
  Cash and cash equivalents $ 8,283,092   $ 7,576,374  
  Restricted cash and cash equivalents   850,279     810,396  
  Certificates of deposit   -     -  
  Accounts receivable, net   5,863,636     5,771,013  
  Inventory   4,876,641     4,291,505  
  Prepaid items and other assets   446,749     248,546  
  Income taxes receivable   106,897     1,202,709  
  Deferred income taxes   741,915     627,000  
    Total Current Assets   21,169,209     20,527,543  
             
Property and Equipment, Net   1,532,144     1,698,218  
Other Assets            
  Goodwill   4,452,152     3,768,435  
  Intangibles, net of amortization   907,495     781,633  
  Other Assets   81,885     95,217  
    Total Assets $ 28,142,885   $ 26,871,046  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current Liabilities:            
  Accounts payable $ 1,170,446   $ 1,300,917  
  Accrued payroll   468,454     464,942  
  Deferred revenue   686,029     531,397  
  Other accrued expenses   1,520,261     1,134,279  
  Billings in excess of costs and estimated earnings   388,687     306,148  
    Total Current Liabilities   4,233,877     3,737,683  
             
Long-Term Liabilities            
  Deferred rent   890,391     1,006,893  
             
    Total Long-term Liabilities   890,391     1,006,893  
    Total Liabilities   5,124,268     4,744,576  
Stockholders' Equity            
  Common stock, 12,000,000 shares authorized; 5,066,009 and 5,039,632 issued and outstanding   50,660     50,397  
  Additional paid-in capital   5,340,277     5,185,325  
  Retained earnings   17,869,256     17,073,351  
  Accumulated other comprehensive loss   (241,576 )   (182,603 )
    Total Stockholders' Equity   23,018,617     22,126,470  
    Total Liabilities and Stockholders' Equity $ 28,142,885   $ 26,871,046  
             
             

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