SOURCE: Sutron Corporation

Sutron Corporation

August 14, 2009 11:30 ET

Sutron Reports Second Quarter Operating Results

STERLING, VA--(Marketwire - August 14, 2009) - Sutron Corporation (NASDAQ: STRN), a leading provider of hydrological, meteorological and oceanic monitoring, warning and control systems, announced today its financial results for three months and six months ended June 30, 2009.

Financial Highlights

Net income for the second quarter ended June 30, 2009 was $358,793 or $.08 per share compared to net income of $258,883 or $.06 per share for the same quarter last year. Net income for the six months ended June 30, 2009 was $465,451 or $.10 per share compared to net income of $505,800 or $.11 per share for the six month period last year. Revenues for the second quarter ended June 30, 2009 were $4,786,898 compared to $4,025,016 in the second quarter of 2008. Revenues for the six months ended June 30, 2009 were $8,361,929 compared to $7,844,063 in the same six month period of 2008. The backlog of customer orders at June 30, 2009 was $11,990,000 as compared to $7,737,000 at June 30, 2008.

"We are pleased to report a 19% increase in revenue and a 39% increase in earnings in the second quarter," said Raul McQuivey, Sutron's Chairman and Chief Executive Officer. "Our gross margin in the second quarter of 2009 improved to 40.6% compared to 33.3% in 2008. Our operating income increased 72% to $569,006 in the second quarter of 2009 as compared to $330,776 in 2008. During the second quarter, shipments and work performed on the Tamil Nadu Agricultural University (TNAU) contract resulted in revenue of approximately $1.3 million. We were also excited with our customer orders during the second quarter that totaled approximately $10,625,000 as compared to orders of approximately $2,389,000 in 2008. The increase was due to the TNAU contract of approximately $2,979,000 that was received in April 2009 as well as two orders from the U.S. Geological Survey that totaled approximately $3,972,000 that were received in June 2009.

"Our move into our new corporate headquarters and operations facility in Sterling, Virginia was completed during the second quarter. One-time costs associated with the move into our new facility totaled approximately $31,000 during the second quarter. Sales and marketing costs were higher in the second quarter of 2009 as compared to 2008 due to selling costs relating to our new Ilex Division, increased Integrated Systems' and Sutron HydroMet Systems' (our wholly owned subsidiary in India) selling costs and increased General Services Administration (GSA) contract funding fees due to higher orders received from the U.S. Geological Survey. Product development expenses increased due to higher use of subcontractors, an increase in R&D personnel and lower direct bill labor by R&D personnel. The effective income tax rate was higher as well in the second quarter of 2009 as compared to 2008. The exercise of employee stock options in the second quarter of 2008 resulted in tax deductible compensation which lowered income tax expense while there were no employee stock option exercises in 2009.

"We ended the quarter with cash of approximately $4.85 million which includes restricted cash of approximately $1,050,000. We continue to be optimistic in regards to future business. We are closely following global economic stimulus plans and believe that we will receive major customer orders in 2009 and 2010 as a result of increased government spending around the world."

About Sutron Corporation

Sutron was founded in 1975 and is headquartered in Sterling, Virginia. Sutron designs, manufactures and sells hydrological, meteorological and oceanic monitoring products, systems, software and services to a diversified customer base of federal, state, local and foreign governments, engineering companies, universities and hydropower companies.

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 March 31, 2009. 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 June 30,
HIGHLIGHTS OF OPERATING RESULTS                        2009        2008
                                                    ----------- -----------

Revenues                                            $ 4,786,898 $ 4,025,016
Cost of sales                                         2,843,518   2,685,418
                                                    ----------- -----------
Gross profit                                          1,943,380   1,339,598
Operating expenses                                    1,374,374   1,008,822
                                                    ----------- -----------
Operating income                                        569,006     330,776
Interest and other income                                22,487      26,107
                                                    ----------- -----------
Income before income taxes                              591,493     356,883
Income tax expense (benefit)                            232,700      98,000
                                                    ----------- -----------
Net income                                          $   358,793 $   258,883
                                                    =========== ===========
PER SHARE AMOUNTS:
Basic income per share                              $      0.08 $      0.06
                                                    =========== ===========
Diluted income per share                            $      0.07 $      0.05
                                                    =========== ===========


                                                         (Unaudited)
                                                      For the Six Months
                                                        Ended June 30,
HIGHLIGHTS OF OPERATING RESULTS                        2009        2008
                                                    ----------- -----------

Revenues                                            $ 8,361,929 $ 7,844,063
Cost of sales                                         5,032,260   5,009,866
                                                    ----------- -----------
Gross profit                                          3,329,669   2,834,197
Operating expenses                                    2,743,498   2,180,826
                                                    ----------- -----------
Operating income                                        586,171     653,371
Interest and other income                               194,980      66,429
                                                    ----------- -----------
Income before income taxes                              781,151     719,800
Income tax expense (benefit)                            315,700     214,000
                                                    ----------- -----------
Net income                                          $   465,451 $   505,800
                                                    =========== ===========
PER SHARE AMOUNTS:
Basic income per share                              $      0.10 $      0.11
                                                    =========== ===========
Diluted income per share                            $      0.09 $      0.10
                                                    =========== ===========




                              Balance Sheets

                                                (Unaudited)    (Audited)
                                                  June 30,    December 31,
                                                    2009          2008
                                                ------------  ------------
ASSETS
Current Assets:
     Cash and cash equivalents                  $  3,804,097  $  3,705,475
     Restricted cash and cash equivalents          1,050,451       784,920
     Accounts receivable, net                      5,233,444     3,872,527
     Inventory                                     3,454,200     4,053,788
     Prepaid items and other assets                  266,048       302,633
     Income taxes receivable                          98,709       983,875
     Deferred income taxes                           294,000       308,000
                                                ------------  ------------
          Total Current Assets                    14,200,949    14,011,218

Property and Equipment, Net                        2,065,184       372,745
                                                ------------  ------------
Other Assets
     Goodwill                                        570,150       570,150
     Other Assets                                    139,852        95,057
                                                ------------  ------------
         Total Assets                           $ 16,976,135  $ 15,049,170
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts payable                           $  1,144,682  $  1,200,721
     Accrued payroll                                 202,394       129,142
     Other accrued expenses                          852,123       794,307
     Notes payable - current                               -         2,765
     Billings in excess of costs and estimated
      earnings                                        85,143       139,117
                                                ------------  ------------
          Total Current Liabilities                2,284,342     2,266,052

Long-Term Liabilities
     Deferred rent                                 1,379,260             -
     Deferred income taxes                            51,000        59,000
                                                ------------  ------------
          Total Long-term Liabilities              1,430,260        59,000
                                                ------------  ------------
          Total Liabilities                        3,714,602     2,325,052
                                                ------------  ------------

Stockholders' Equity
     Common stock                                     45,707        45,707
     Additional paid-in capital                    2,841,010     2,778,775
     Retained earnings                            10,474,556    10,009,105
     Accumulated other comprehensive loss            (99,740)     (109,469)
                                                ------------  ------------
         Total Stockholders' Equity               13,261,533    12,724,118
                                                ------------  ------------
         Total Liabilities and Stockholders'
          Equity                                $ 16,976,135  $ 15,049,170
                                                ============  ============

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