UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 

FORM 8-K
 

Current Report
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act Of 1934
 
Date of Report (Date of earliest event reported):  May 20, 2015

Sutron Corporation
(Exact name of registrant as specified in its charter.)
 
Virginia 0-12227 54-1006352
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
                                                                                                                                                                                                              
22400 Davis Drive, Sterling, Virginia       20164
(Address of principal executive offices)     (Zip Code)
 
(703) 406-2800
(Issuer’s telephone number)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Item 2.02. Results of Operations and Financial Condition

On May 15, 2015, Sutron Corporation (the “Company”) announced via press release the Company's results for its first quarter ended March 31, 2015. A copy of the Company's press release is attached hereto as Exhibit 99.1, and is incorporated herein by reference thereto.  The information included in this Item 2.02 and the attached exhibit are provided under Item 2.02 of Form 8-K is being furnished and shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specified otherwise.

Item 5.07 of Matters to a Vote of Security Holders
 
On May 20, 2015, Sutron Corporation held its 2015 Annual Meeting of Stockholders.  The following proposals were adopted by the votes specified below.

1.  
To elect five (5) directors for the next year:
  
For
    
Withheld
      
Broker
Non-Votes
  
   
Raul S. McQuivey
   2,774,613     33,545       2,275,976  
   
John F. DePodesta
   2,643,130     165,028       2,275,976  
   
Larry C. Linton
   2,643,130     165,028       2,275,976  
   
Leland R. Phipps
   2,643,130     165,028       2,275,976  
   
Ashish H. Raval
   2,774,208     33,950       2,275,976  
                         
 
2.  
To ratify the appointment of Yount, Hyde & Barbour as the Company's independent
registered public accounting firm for fiscal year 2014
  
For
    
Against
  
Abstain
  
Broker
Non-Votes
  
        3,871,058     0  
     8,300
   1,204,776  
 
Item 9.01  Financial Statements and Exhibits
 
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:   May 26, 2015                                                           Sutron Corporation
(Registrant)

By /s/ Glen E. Goold
Glen E. Goold
Chief Financial Officer and Secretary


Exhibit 99.1

SUTRON REPORTS FIRST QUARTER 2015 RESULTS

Sterling, VA - May 14, 2015 - Sutron Corporation (NASDAQ: STRN) today announced results for the first quarter ended March 31, 2015.

First Quarter 2015 Results

·  
First Quarter 2014 Revenue of $4.5 million; down from $4.9 million Revenue First Quarter 2014

·  
First Quarter Net Loss of $735 thousand; increased from $540 thousand Net Loss in First Quarter 2014

·  
Backlog as of March 31, 2005 was $15.5 million, up 28% from Prior Year Quarter

Sutron reported revenue of $4.5 million for the first quarter of 2015, down $400 thousand, or 8% from the prior year first quarter.   The lower revenue year over year is due to slower project activity being awarded in the first quarter than prior years. Standard product revenues for the first quarter of 2015 increased to $2.5 million as compared to $2.0 million for the first quarter of 2014.  The increase in standard product revenue is attributed to increased orders from the federal, state and local sectors than compared to the previous year. Revenues for systems and services for the first quarter of 2015 was $2.0 million, a decrease from $2.9 million in 2014.

Net loss for the first quarter of fiscal year 2015 was $735 thousand, a decrease from a net loss of $540 thousand in the first quarter of fiscal year 2014.  Loss per share was $(0.14) per basic and diluted share for the first quarter of 2015 as compared to loss per share of $(0.11) per share in the first quarter of 2014.

The Company’s backlog as of March 31, 2015 was approximately $15.5 million, up 28% from the backlog as of March 31, 2014. Of the $15.5 million in backlog, we expect to convert approximately two-thirds of that backlog to revenue within 2015.

Balance Sheet and Liquidity

Sutron ended the first quarter of 2015 with $6.3 million in cash and cash equivalents, down from $8.7 million at December 31, 2014 and from $9.2 million at March 31, 2014.  Cash used by operating activities in the first quarter of 2015 was approximately $2.3 million compared to cash generated by operating activities in the first quarter of 2014 of $113 thousand.  The principal components of the use of cash in the first quarter of 2015 were the recognition of net operating loss, decrease of accounts payable and the increase of vendor advance payments contrasted against uses of cash of increased prepayments to vendors and an increase in our inventory on hand as of March 31, 2015.  Capital expenditures were $71 thousand in the first quarter of 2015 compared to $48 thousand in the first quarter of 2014.
 
 
 
 
 
Free Cash Flow in the first quarter of 2015 was approximately $(2.3) million compared to Free Cash Flow of $66 thousand for the first quarter of 2014.  Sutron defines Free Cash Flow as net cash provided or used by operating activities less cash used in the purchase of property and equipment.  The primary cause for the year over year variance was the low operating cash flow in the first quarter of 2014.

Management Commentary

“Although the first quarter is historically slow for Sutron, we are disappointed by these first quarter results,” stated Raul McQuivey, Chairman and Chief Executive Officer. “The low quarterly top line revenue was due to continuing delay for some projects and our inability to ship a couple of orders awaiting payment from customers.  Our performance in the first quarter of 2015 is significantly below our budget. One note of optimism is a $15 million backlog at quarter’s end and our deep pipeline of opportunities that we are pursuing.  Hopefully, this will position us to recover from our slow first quarter and to realize more acceptable performance for the remainder of 2015. Our focus for the remainder of 2015 will be to drive revenue growth and also to achieve steady improvement in our operating margins and net income.  We are making progress in some of our new development initiatives that we believe will produce dividends for us later in 2015.”

Conference Call

The Company will host a conference call on May 20, 2014 at 1:45 p.m. Eastern Time during its Annual Shareholders Meeting to discuss its strategic direction and focus and to review the results for the first quarter of 2015. The on-line presentation can be accessed via the following webinar link and phone number:

On-line webinar/presentation:

https://global.gotomeeting.com/join/633561373

Audio Dial-in
Phone Number: +1 (626) 425-3113
Access Code: 633-561-373
 
About Sutron

Sutron Corporation, headquartered in Sterling, Virginia, is a project driven business.  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, 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 BALANCE SHEETS
 
   
(Unaudited)
March 31,
 2015
    
(Audited)
December 31,
 2014
  
             
ASSETS
            
Current Assets:
            
     Cash and cash equivalents
   $ 5,545,940     $ 7,873,903  
     Restricted cash and cash equivalents
     767,493       809,509  
     Accounts receivable, net
     4,865,253       4,693,260  
   Costs in excess of billings
     1,446,800       1,500,603  
     Inventory, net
     4,997,806       4,747,676  
     Prepaid items and other assets
     634,708       293,568  
     Income taxes receivable
     243,163       173,537  
     Deferred income taxes
     1,450,643       1,046,593  
          Total Current Assets
     19,951,806       21,138,649  
                 
Property and Equipment, Net
     1,870,789       1,935,760  
Other Assets
                
     Goodwill
     4,452,152       4,452,152  
     Intangibles, net of amortization
     676,209       722,466  
     Other Assets
     85,444       102,514  
         Total Assets
   $ 27,036,400     $ 28,351,541  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current Liabilities:
                
     Accounts payable
   $ 721,791     $ 1,045,170  
     Accrued payroll
     1,042,594       886,367  
     Deferred revenue
     929,792       1,286,121  
   Deferred rent
     151,584       149,011  
     Other accrued expenses
     688,665       744,346  
     Billings in excess of costs and estimated earnings
     157,831       125,242  
          Total Current Liabilities
     3,692,257       4,236,257  
Long-Term Liabilities
                
     Deferred rent
     571,178       608,568  
     Deferred income taxes
     8,153       30,871  
          Total Liabilities
     4,271,588       4,875,696  
Stockholders’ Equity
                
     Common stock, 12,000,000 shares authorized;
     5,084,134 issued and outstanding at March 31, 2015 and December 31, 2014
     50,842       50,842  
     Additional paid-in capital
     5,503,775       5,465,723  
     Retained earnings
     17,619,088       18,354,164  
     Accumulated other comprehensive loss
     (408,893 )     (394,884 )
         Total Stockholders’ Equity
     22,764,812       23,475,845  
         Total Liabilities and Stockholders’ Equity
   $ 27,036,400     $ 28,351,541  
 
See accompanying notes to consolidated financial statements.
 
 
 
 
 
SUTRON CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

   
Three Months Ended March 31,
  
         
Restated
  
   
2015
    
2014
  
             
Revenue
  
$
4,502,578
    
$
4,899,345
  
                 
Cost of goods sold
    
3,173,231
      
3,263,304
  
     Gross profit
    
1,329,347
      
1,636,041
  
                 
Operating expenses:
                
  Selling, general and administrative expenses
    
1,675,479
      
1,659,849
  
  Research and development expenses
    
825,771
      
868,949
  
     Total operating expenses
    
2,501,250
      
2,528,798
  
                 
     Operating (loss) income
    
(1,171,903)
      
(892,757)
  
                 
Financing income, net
    
14,675
      
2,873
  
                 
     (Loss) income before income taxes
    
(1,157,228)
      
(889,884)
  
                 
Income tax (benefit) expense
    
(422,152)
      
(349,666)
  
Net (loss) income
  
$
(735,076)
    
$
(540,218)
  
                 
Net (loss) income per share:
                
                 
     Basic (loss) income per share
  
$
(0.14)
    
$
(0.11)
  
     Diluted (loss) income per share
  
$
(0.14)
    
$
(0.11)
  
                 
Comprehensive income:
                
                 
     Net (loss) income
  
$
(735,076)
    
$
(540,218)
  
                 
     Foreign currency translation adjustments
    
(14,009)
      
(28,032)
  
                 
Comprehensive (loss) income
  
$
(749,085)
    
$
(568,250)
  
 
 
 
 
 
SUTRON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    Three Months Ended
March 31,
         
Restated
   
2015
    
2014
Cash Flows from Operating Activities:
          
Net (loss) income
  
$
(735,076)
    
$
(540,218)
  
Noncash items included in net income:
                
    Depreciation
    
135,630
      
113,562
  
  Amortization of intangibles
    
46,257
      
46,257
  
    Deferred income taxes
    
(426,768)
      
(373,877)
  
    Stock based compensation
    
38,052
      
22,998
  
Change in current assets and liabilities, net of the impact of acquisitions:
                
    Accounts receivable
    
(171,993)
      
396,082
  
   Costs in excess of billings
    
53,803
      
(195,569)
  
    Inventory
    
(250,130)
      
(400,189)
)
    Prepaid expenses and other assets
    
(341,140)
      
(239,007)
)
   Income tax receivable
    
(69,626)
      
29,031
  
    Accounts payable
    
(323,379)
      
192,051
  
    Accrued expenses
    
100,546
      
1,124,649
)
   Deferred revenues
    
(356,329)
      
103,544
  
    Billings in excess of costs and estimated earnings
    
32,589
      
(134,917)
  
    Deferred rent
    
(34,817)
      
(31,040)
)
Net Cash (Used) Provided by Operating Activities
    
(2,302,381)
      
113,357
)
                 
Cash Flows from Investing Activities:
                
   Restricted cash and cash equivalents
    
42,016
      
(25,541)
  
   Purchase of property and equipment
    
(70,659)
      
(47,537)
)
   Other assets
    
17,070
      
1,458
  
Net Cash Used by Investing Activities
    
(11,573)
      
(71,620)
)
                 
Effect of exchange rate changes on cash and cash equivalents
    
(14,009)
      
(28,032)
  
Net (decrease) increase in cash and cash equivalents
    
(2,327,963)
      
13,705
)
Cash and Cash Equivalents, beginning of period
    
7,873,903
      
8,283,092
  
Cash and Cash Equivalents, end of period
  
$
5,545,940
    
$
8,296,797
  
 
 

Company Contact: Glen Goold
+1 (703)406-2800
ggoold@sutron.com
www.sutron.com

 
 
 
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