SOURCE: Sutron Corporation

Sutron Corporation

November 11, 2010 11:15 ET

Sutron Reports 50% Growth in Third Quarter Earnings

STERLING, VA--(Marketwire - November 11, 2010) - Sutron Corporation (NASDAQ: STRN), a leading provider of hydrological, meteorological and oceanic monitoring products, systems and services, announced today its financial results for the three months and nine months ended September 30, 2010.

Financial Highlights

Net income for the third quarter ended September 30, 2010 was up 50% to $782,295 or $.17 per share as compared to net income of $521,014 or $.11 per share in the third quarter in 2009. Net income for the nine months ended September 30, 2010 was up 66% to $1,702,775 or $.37 per share as compared to net income of $1,025,517 or $.22 per share for the same nine month period in 2009. Revenues for the third quarter ended September 30, 2010 were up 29% to $5,833,904 as compared to $4,536,850 in the third quarter of 2009. Revenues for the nine months ended September 30, 2010 were up 26% to $16,206,680 as compared to $12,898,779 for the same nine month period of 2009. The backlog of customer orders and contracts at September 30, 2010 was down 16% to approximately $14,509,000 as compared to backlog of approximately $17,203,000 at September 30, 2009.

"We are pleased to report 50% growth in third quarter earnings on 29% growth in revenues", said Raul McQuivey, Sutron's Chairman and Chief Executive Officer. "As a percentage of revenues, operating income was 20% in the third quarter of 2010 as compared to 16% in the third quarter of 2009. R&D spending increased 12% in the third quarter of 2010 as compared to the third quarter of 2009. Our results for the nine months ended September 30, 2010 were similarly positive as we experienced a 66% growth in earnings on 26% growth in revenues over the same nine month period of 2009. As a percentage of revenues, operating income was approximately 16% for the nine months ended September 30, 2010 as compared to 11% over the same nine month period of 2009. R&D spending increased 16% for the nine months ended September 30, 2010 over the same nine month period of 2009."

"We are focused on enhancing our current products, adding innovative new products, expanding our project opportunities and increasing our backlog. We are focused on utilizing our cash position, which has reached a record level of approximately $10,369,000 as of September 30, 2010, to make strategic acquisitions that will complement our business and add to our growth. We are focused on achieving record results in fiscal year 2010 and expect to convert approximately 50% of our September 30th backlog into revenue during the fourth quarter of fiscal year 2010. We continue to see many world-wide opportunities in the hydro-meteorological and oceanic monitoring markets. We are hopeful of winning several large projects before year end that will expand the backlog that we plan to carry into fiscal year 2011. We are positioning ourselves to achieve record results in fiscal year 2011."

About Sutron Corporation

Sutron Corporation, headquartered in Sterling, Virginia, is a provider of products, systems, services and software to a diversified customer base of federal, state, local and foreign governments, engineering companies, universities and hydropower companies in the hydrological, meteorological and oceanic real-time data collection and control market. We have sold over 50,000 stations worldwide that use satellite, telephone, or cellular telemetry to collect, store, and transmit real-time data from remote sites. Our data collection software allows users to collect, process, calculate, analyze and distribute their data in real time via voice, text, email, pager, web page, alerts and live web-cam. Our equipment 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 field stations, sensors or base stations. Our operating results are project-driven and fluctuate substantially based upon large contract awards that are difficult to project in terms of timing.

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, financing plans, business strategy, 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. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in our filings with the SEC, including the disclosure under the heading "Business" and "Management's Discussion and Analysis" in the Company's Annual Report on Form 10-K filed on April 15, 2010. 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

                                                        (Unaudited)
                                                    For the Three Months
                                                     Ended September 30,
HIGHLIGHTS OF OPERATING RESULTS                       2010         2009
                                                  ------------ ------------

Revenues                                          $  5,833,904 $  4,536,850
Cost of sales                                        3,268,035    2,470,685
                                                  ------------ ------------
Gross profit                                         2,565,869    2,066,165
Operating expenses                                   1,408,000    1,326,923
                                                  ------------ ------------
Operating income                                     1,157,869      739,242
Interest and other income                               19,426       20,772
                                                  ------------ ------------
Income before income taxes                           1,177,295      760,014
Income tax expense                                     395,000      239,000
                                                  ------------ ------------
Net income                                        $    782,295 $    521,014
                                                  ============ ============
PER SHARE AMOUNTS:
Basic income per share                            $       0.17 $       0.11
                                                  ============ ============
Diluted income per share                          $       0.16 $       0.10
                                                  ============ ============

                                                        (Unaudited)
                                                     For the Nine Months
                                                     Ended September 30,
HIGHLIGHTS OF OPERATING RESULTS                       2010         2009
                                                  ------------ ------------

Revenues                                          $ 16,206,680 $ 12,898,779
Cost of sales                                        9,385,520    7,410,081
                                                  ------------ ------------
Gross profit                                         6,821,160    5,488,698
Operating expenses                                   4,250,486    4,103,933
                                                  ------------ ------------
Operating income                                     2,570,674    1,384,765
Interest and other income                               47,101      215,752
                                                  ------------ ------------
Income before income taxes                           2,617,775    1,600,517
Income tax expense                                     915,000      575,000
                                                  ------------ ------------
Net income                                        $  1,702,775 $  1,025,517
                                                  ============ ============
PER SHARE AMOUNTS:
Basic income per share                            $       0.37 $       0.22
                                                  ============ ============
Diluted income per share                          $       0.34 $       0.21
                                                  ============ ============




                              Balance Sheets

                                                (Unaudited)     (Audited)
                                                September 30,  December 31,
                                                    2010          2009
                                                ------------  ------------
ASSETS
Current Assets:
  Cash and cash equivalents                     $  9,479,374  $  4,666,983
  Restricted cash and cash equivalents               889,244     1,032,517
  Accounts receivable, net                         3,690,996     7,468,327
  Inventory                                        3,823,877     3,088,782
  Prepaid items and other assets                     730,572       206,338
  Income taxes receivable                                  -        70,695
  Deferred income taxes                              471,000       412,000
                                                ------------  ------------
      Total Current Assets                        19,085,063    16,945,642

Property and Equipment, Net                        1,736,115     1,884,876
                                                ------------  ------------
Other Assets
  Goodwill                                           570,150       570,150
  Other Assets                                       109,701       127,529
                                                ------------  ------------
      Total Assets                              $ 21,501,029  $ 19,528,197
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                              $  1,467,090  $  1,064,425
  Accrued payroll                                    179,200       479,507
  Other accrued expenses                           1,299,915     1,470,477
  Billings in excess of costs and estimated
   earnings                                          370,943             -
                                                ------------  ------------
      Total Current Liabilities                    3,317,148     3,014,409
Long-Term Liabilities
  Deferred rent                                    1,230,863     1,335,176
  Deferred income taxes                              113,000       148,000
                                                ------------  ------------
      Total Long-term Liabilities                  1,343,863     1,483,176
                                                ------------  ------------
      Total Liabilities                            4,661,011     4,497,585
                                                ------------  ------------

Stockholders' Equity
  Common stock                                        45,757        45,707
  Additional paid-in capital                       3,710,788     3,635,659
  Retained earnings                               13,125,260    11,422,485
  Accumulated other comprehensive loss               (41,787)      (73,239)
                                                ------------  ------------
      Total Stockholders' Equity                  16,840,018    15,030,612
                                                ------------  ------------
      Total Liabilities and Stockholders'
       Equity                                   $ 21,501,029  $ 19,528,197
                                                ============  ============

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