STERLING, VA--(Marketwired - March 27, 2015) - Sutron Corporation (NASDAQ: STRN)
- 2014 Net Revenue of $26.2M, Down 4% From Prior Year
- Q4 Net Revenue of $7.2M, Down 2% From Prior Year's Quarter
- 2014 Net Income of $484,908, Down 39% From Prior Year
- Q4 Net Income of $620,599, Up 87% From Prior Year's Quarter
- 2014 Bookings of $27.1M, Up 5% From Prior Year
- Cash of $8.7M at the end of 2014, Down 4.9% From Prior Year
- 2014 Free Cash Flow of $(287,326), Compared to $1.96M at the end of 2013
Sutron Corporation (NASDAQ: STRN), a global leader in hydrological, meteorological, air quality and oceanic monitoring products, systems, software and services, announced results for the fourth quarter and full year ended December 31, 2014.
Raul McQuivey, Chairman and Chief Executive Officer, stated, "While we continue to see many new opportunities in our global marketspace, we are disappointed in this year's results in that several opportunities we expected to close in 2014 were delayed to 2015. However, our deal pipeline remains robust and growing and we believe we are well positioned to capitalize on many of these opportunities in 2015. We expect investments made in research and development efforts in 2013 and 2014 will also begin to generate returns in 2015. Given our pipeline and the progress we have made with our development efforts, I am confident we will have increased revenues and increased profitability in 2015.
"In 2014, we invested approximately $529,000 in new surface mount technology ('SMT') machinery that we believe will allow us to better control our production process, improve quality of our printed circuit boards ('PCB'), better serve our customers through faster lead times, and improve the material costs of many of our products through efficiencies gained in managing our own PCB process.
"We continue to work on expanding our bundled end-to-end solution capabilities with our recent acquisitions. As such, we have reorganized our corporate structure to align with this strategy. In 2015 we will have five Sutron divisions: Hydromet Products Division ('HPD'), Integrated Systems Division ('ISD'), Sutron India Division ('SIO'), Weather Solutions Division ('WSD'), and Air Quality Division ('AQD'). Outside of HPD, through which we deliver our standard products, we have opportunities in each of our other divisions to deliver bundled end-to-end solutions in 2015. We are beginning to see traction in the marketplace for these solutions and are committed to bring additional innovative products and solutions to market in 2015 that we believe will foster growth of sales and profitability in 2015 and beyond."
Consolidated Results
Continuing Sutron operations are presented below.
Quarter Ended December 31, 2014
Net Revenue was $7.2 million for the fourth quarter of 2014, a decrease of 2% from $7.3 million in the fourth quarter of 2013. Several projects the Company was expecting to close and deliver by year-end were delayed causing the small decrease in revenue.
Gross Profit was $3.0 million, or 41% of net revenue, as compared to $2.9 million, or 40% of net revenue, in the fourth quarter of 2013. An increase in our Hydromet standard products sales, as well as increased margin on a large project we won in November 2014, resulted in the stronger gross margin as a percentage of sales compared to the fourth quarter of 2013.
Operating Expenses were $2.3 million, or 33% of net revenue, as compared to $2.3 million, or 32% of net revenue, in the fourth quarter of 2013.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") was approximately $823,000 in the fourth quarter of 2014 as compared to EBITDA of approximately $796,000 in the fourth quarter of 2013. The slight increase over fourth quarter of 2013 was due to the slightly higher margin on product sales in the fourth quarter 2014.
Net Income was $620,599, or $.12 per basic and $.12 per diluted common share for the fourth quarter of 2014, compared to net income of $332,898, or $.07 per basic and $.06 per diluted common share, in the fourth quarter of 2013. The number of shares outstanding used to calculate basic and diluted earnings per common share in the fourth quarter of 2014 were 5.08 and 5.10 million, respectively, compared to 5.07 and 5.12 million, respectively, for basic and diluted earnings per common share in the fourth quarter of 2013.
Year Ended December 31, 2014
Net revenue for the year ended December 31, 2014 was $26.2M, down 4% from $27.2 in 2013. Sales from our legacy business were $19.6M, down 3% from $20.1M in 2013. MeteoStar generated $5.2M of revenue in 2014, down 10% from $5.8m in 2013. MeteoStar, has had a number of large projects delayed that we expect will close in 2015. Sabio generated $1.4M of revenue in 2014, up 11% from $1.3M in 2013. The increase in revenue is largely due to 2014 being the first full year of our ownership.
Gross profit for the year ended December 31, 2014 was $10.3M, or 39% of net revenue, as compared to $10.8M, or 40% of net revenue, in 2013.
Operating expenses were $10.0M in 2014, or 38% of net revenue, as compared to $9.6M, or 35% of net revenue, in 2013. The increase is due primarily to a full year of costs for running our Sabio division compared to 2013 and an increase in our sales and marketing expenditures. In 2014, we launched our renovated corporate web-site and have been integrating all divisions of the Company into that web-site.
EBITDA for the year ended December 31, 2014 was approximately $1.05M, or 4.0% of net revenues, as compared to EBITDA of approximately $1.78M, or 6.5% of net revenues, in 2013.
Net Income was $484,908 in 2014, or $.10 per basic and $.09 per diluted common share, compared to net income of $795,905, or $.16 per basic and diluted common share, in 2013. The number of shares outstanding used to calculate basic and diluted earnings per common share in 2014 were 5.08 and 5.10 million, respectively, compared to 5.07 and 5.12 million, respectively, for basic and diluted earnings per common share in 2013.
Balance Sheet, Liquidity and Capital Resources
Sutron ended 2014 with $8.6 million in cash and cash equivalents, down from $9.1 million at the end of 2013. For the year ended December 31, 2014, cash generated by operating activities was $574,204 as compared to cash generated by operating activities of $2,178,449 in 2013. For the year ended December 31, 2014, capital expenditures were $861,530 as compared to $207,407 in 2013. The increase in capital expenditures was primarily due to the Company's investment in its SMT machinery.
Free Cash Flow for the year ended December 31, 2014 was $(287,326) as compared to Free Cash Flow of $1,964,266 in 2013. Sutron defines Free Cash Flow as net cash provided or used by operating activities less cash used in the purchase of property and equipment.
Shareholder Call
The Company will hold a shareholder call to discuss its 2014 results at 11a.m. EDT on Monday, March 30th. The dial-in details for the call are:
Dial-in Number: +1 (224) 501-3412
Access Code: 186-391-485
For those not able to dial in for the call, the call will be recorded and uploaded to our website -- www.sutron.com.
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
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2014 2013
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ASSETS
Current Assets:
Cash and cash equivalents $ 7,873,903 $ 8,283,092
Restricted cash and cash equivalents 809,509 850,279
Accounts receivable, net 4,693,260 4,480,218
Costs in excess of billings 1,500,603 1,383,418
Inventory 4,747,676 4,876,641
Prepaid items and other assets 293,568 446,749
Income taxes receivable 173,537 106,897
Deferred income taxes 1,046,593 664,558
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Total Current Assets 21,138,649 21,091,852
Property and Equipment, Net 1,935,760 1,532,144
Other Assets
Goodwill 4,452,152 4,452,152
Intangibles, net of amortization 722,466 907,495
Deferred tax asset - 77,357
Other assets 102,514 81,885
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Total Assets $ 28,351,541 $ 28,142,885
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,045,170 $ 1,170,446
Accrued payroll 110,639 468,454
Deferred revenue 1,286,121 686,029
Deferred rent 149,011 139,146
Other accrued expenses 1,520,074 1,520,261
Billings in excess of costs and estimated
earnings 125,242 388,687
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Total Current Liabilities 4,236,257 4,373,023
Long-Term Liabilities
Deferred rent 608,568 751,245
Deferred tax liability 30,871 -
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Total Liabilities 4,875,696 5,124,268
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Stockholders' Equity
Common stock, $0.01 par value, 12,000,000
shares authorized; 5,084,134 and 5,066,009
issued and outstanding 50,842 50,660
Additional paid-in capital 5,465,723 5,340,277
Retained earnings 18,354,164 17,869,256
Accumulated other comprehensive loss (394,884) (241,576)
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Total Stockholders' Equity 23,475,845 23,018,617
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Total Liabilities and Stockholders' Equity $ 28,351,541 $ 28,142,885
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SUTRON CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Years Ended December 31,
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2014 2013 2012
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Net sales and revenues $26,243,398 $27,208,304 $25,229,519
Cost of sales and revenues 15,914,728 16,424,127 15,212,433
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Gross profit 10,328,670 10,784,177 10,017,086
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Operating expenses:
Selling, general and administrative
expenses 6,647,788 6,124,930 5,275,676
Research and development expenses 3,367,172 3,438,250 3,384,393
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Total operating expenses 10,014,960 9,563,180 8,660,069
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Operating income 313,710 1,220,997 1,357,017
Financing income, net 83,067 46,892 74,783
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Income before income taxes 396,777 1,267,889 1,431,800
Income tax expense (benefit) (88,131) 471,984 289,000
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Net income $ 484,908 $ 795,905 $ 1,142,800
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Net income per share:
Basic income per share $ .10 $ .16 $ .24
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Diluted income per share $ .09 $ .16 $ .23
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Comprehensive income (loss):
Net income 484,908 795,905 1,142,800
Foreign currency translation
adjustments (153,308) (58,973) (6,094)
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Comprehensive income $ 331,600 $ 736,932 $ 1,136,706
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Contact:
Glen Goold
(703)406-2800
ggoold@sutron.com
