SOURCE: Sutron Corporation

Sutron Corporation

November 14, 2012 12:17 ET

Sutron Corporation Reports Third Quarter 2012 Results

STERLING, VA--(Marketwire - Nov 14, 2012) - Sutron Corporation (NASDAQ: STRN), a global leader in hydrological, meteorological, oceanic, and aviation monitoring products, systems, software and services, is pleased to announced results for the third quarter ended September 30, 2012.

  • Q3 Net Revenue of $7.3M, Up 34% From Prior Year's Quarter

  • Q3 Net Income of $625,395 Up 16% From Prior Year's Quarter

  • Q3 EBITDA of $1M, Up 10% From Prior Year's Quarter

  • Bookings of $20M Through First Nine Months Exceed Total Prior Year Bookings by 13%

Raul McQuivey, Chairman and Chief Executive Officer, stated, "Sutron executed on many key objectives in the third quarter, including: delivering $7.3 million of revenue, up 34% from the prior year quarter, and net income of $625,395, up 16% from the prior year quarter; generating over $1 million of EBITDA, up 10% from the prior year quarter; recording over $6.3 million of bookings, that brought the total for the first nine months of 2012 to over $20 million, already exceeding total bookings for the prior full year; and implementing sales and marketing synergies with our new MeteoStar Division."

"Subsequent to the close of the third quarter, we announced an additional $4 million of bookings involving projects in Afghanistan that continues a strong trajectory in booking activity", McQuivey added. "While fluctuations in bookings and revenue are not uncommon in our business which is highly project driven and subject to governmental approval and funding processes, based on increased backlog and planned shipments, we anticipate strong fourth quarter revenues. We continue to be encouraged regarding our opportunities as we experience significant demand -- both domestically and internationally -- for our broadened portfolio of products and systems. We are in a favorable position to support expanded activities as our balance sheet remains strong with no debt and approximately $7.4 million of cash on hand -- an increase of $.8 million from the prior quarter."

Consolidated Results

Continuing Sutron operations, including the first full quarter of the MeteoStar Division, are presented below.

Net Revenue was $7.3 million, an increase of 34% from $5.4 million in the third quarter of 2011. The primary drivers of the revenue increase were organic growth ($.7 million) and the revenue generated from the MeteoStar Division ($1.2 million).

Cost of sales was $4.1 million, or 56% of net revenue, compared to $3.1 million, or 57% of net revenue in the third quarter of 2011. 

Gross Profit was $3.2 million, or 44% of net revenue, as compared to $2.3 million, or 43% of net revenue, in the third quarter of 2011. Higher margin MeteoStar Division and Integrated Systems products were partially offset by lower margin HydroMet standard products in this year's third quarter.

Operating Expenses were $2.3 million as compared to $1.5 million in the third quarter of 2011. The increase was primarily due to $ .9 million in operating costs incurred by the new MeteoStar Division in the third quarter of 2012. 

Net Income was $625,395, or $.13 per basic and diluted common share, compared to net income of $541,000, or $.12 per basic and diluted share, in the third quarter of 2011. The number of shares outstanding used to calculate basic and diluted earnings per common share in the third quarter of 2012 were 4.7 and 5 million, respectively, compared to 4.6 and 4.9 million, respectively, for basic and diluted earnings per common share in the third quarter of 2011.

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") was $1 million as compared to EBITDA of $.9 million in the third quarter of 2011. The growth in EBITDA is primarily attributable to the growth in net revenue, partially offset by an increase in operating expenses.

Balance Sheet, Liquidity and Capital Resources

Sutron ended the third quarter 2012 with $7.4 million in cash and cash equivalents, up from $6.6 million at June 30, 2012. Cash from operating activities was generated in the third quarter of 2012 in the amount of $468,472 as compared to cash used by operating activities in the third quarter of 2011 in the amount of $335,420.

Capital expenditures were $63,735 in the third quarter 2012 compared to $16,242 in the third quarter 2011. The increase is primarily due to the purchase of additional equipment.

Free Cash Flow in the third quarter 2012 was $404,783 compared to negative free cash flow of $351,662 in the third quarter 2011. 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, 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 60,000 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 September 30,
HIGHLIGHTS OF OPERATING RESULTS   2012   2011
             
Revenues   $ 7,278,999   $ 5,415,230
Cost of sales     4,080,121     3,098,989
Gross profit     3,198,878     2,316,241
Operating expenses     2,276,711     1,489,511
Operating income     922,167     826,730
Interest and other income     17,228     21,270
Income before income taxes     939,395     848,000
Income tax expense (benefit)     314,000     307,000
Net income   $ 625,395   $ 541,000
PER SHARE AMOUNTS:            
Basic income per share   $ 0.13   $ 0.12
Diluted income per share   $ 0.12   $ 0.11
             
       
    (Unaudited)
    For the Nine Months
    Ended September 30,
HIGHLIGHTS OF OPERATING RESULTS   2012   2011
             
Revenues   $ 17,820,348   $ 14,144,357
Cost of sales     10,418,376     8,599,405
Gross profit     7,401,972     5,544,952
Operating expenses     5,809,973     4,336,984
Operating income     1,591,999     1,207,968
Interest and other income     43,957     64,237
Income before income taxes     1,635,956     1,272,205
Income tax expense (benefit)     535,000     451,000
Net income   $ 1,100,956   $ 821,205
PER SHARE AMOUNTS:            
Basic income per share   $ 0.23   $ 0.18
Diluted income per share   $ 0.22   $ 0.17
   
   
Balance Sheets  
   
    (Unaudited)     (Audited)  
        September 30,     December 31,  
        2012     2011  
                 
ASSETS                
Current Assets:                
  Cash and cash equivalents   $ 5,497,568     $ 8,737,543  
  Restricted cash and cash equivalents     953,648       760,037  
  Certificates of deposit     927,194       924,294  
  Accounts receivable, net     7,004,346       6,754,434  
  Inventory     4,155,544       3,520,530  
  Prepaid items and other assets     395,011       322,369  
  Income taxes receivable     310,816       383,943  
  Deferred income taxes     615,000       481,000  
    Total Current Assets     19,859,127       21,884,150  
                 
Property and Equipment, Net     1,721,008       1,524,880  
Other Assets                
  Goodwill     4,628,435       570,150  
  Other Assets     96,675       103,591  
    Total Assets   $ 26,305,245     $ 24,082,771  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current Liabilities:                
  Accounts payable   $ 1,056,909     $ 799,007  
  Accrued payroll     176,442       337,563  
  Other accrued expenses     1,641,508       1,573,409  
  Billings in excess of costs and estimated earnings     711,013       201,015  
    Total Current Liabilities     3,585,872       2,910,994  
Long-Term Liabilities                
  Deferred rent     990,986       1,127,860  
  Deferred income taxes     76,000       69,000  
    Total Long-term Liabilities     1,066,986       1,196,860  
    Total Liabilities     4,652,858       4,107,854  
Stockholders' Equity                
  Common stock, 12,000,000 shares authorized; 4,879,632 and 4,704,632 issued and outstanding     48,797       47,047  
  Additional paid-in capital     4,757,377       4,173,828  
  Retained earnings     17,031,507       15,930,551  
  Accumulated other comprehensive loss     (185,294 )     (176,509 )
    Total Stockholders' Equity     21,652,387       19,974,917  
    Total Liabilities and Stockholders' Equity   $ 26,305,245     $ 24,082,771  

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