STERLING, VA--(Marketwired - May 14, 2014) - Sutron Corporation (NASDAQ: STRN) today announced results for the first quarter ended March 31, 2014.

First Quarter 2014 Results

  • First Quarter 2014 Revenue of $4.9 million; down from $6.5 million Revenue first quarter 2013

  • First Quarter Net Loss of $619 thousand; down from $30 thousand Net Income in first quarter 2013

  • Cash balance of $9.2 million at March 31, 2014; up from $5.0 million at March 31, 2013 and from $9.1 million at December 31, 2013

Sutron reported revenue of $4.9 million for the first quarter of 2014, down $1.6 million, or 25% from the prior year first quarter. Standard product revenues for the first quarter of 2014 declined to $1.5 million as compared to $2.8 million for the first quarter of 2013. The decrease in standard product revenue is attributed to fewer and unexpected order delays from the federal, state and local sectors than compared to the previous year. The MeteoStar Division revenues for the first quarter were $924 thousand, down from $1.7 million for the first quarter 2013, primarily due to unanticipated delays in projects expected to be awarded at the end of 2013 and the beginning of 2014. The Integrated Services Division, the India subsidiary, as well as the Sabio Division all reported increases in revenue over the prior year, but those aggregate increases were not sufficient to overcome the declines in the Company's standard product and MeteoStar divisions.

Net loss for the first quarter of fiscal year 2014 was $587,476, a decrease from net income of $30,202 in the first quarter of fiscal year 2013. Loss per share was $(0.12) per basic and diluted share for the first quarter of 2014 as compared to earnings of $0.01 per share in the first quarter of 2013. 

The Company's backlog as of March 31, 2014 was approximately $12.1 million, down 8% from the backlog as of March 31, 2013.

Balance Sheet and Liquidity

Sutron ended the first quarter of 2014 with $9.2 million in cash and cash equivalents, up from $9.1 million at December 31, 2013 and from $5.0 million at March 31, 2013. Cash generated by operating activities in the first quarter of 2014 was approximately $113 thousand compared to cash used by operating activities in the first quarter of 2013 of $2.1 million. The principal components of the generation of cash in the first quarter of 2014 were the decrease of accounts receivable, the increase of customer advance payments, and non-cash items such as depreciation, amortization, and stock-based compensation contrasted against uses of cash of increased prepayments to vendors and an increase in our inventory on hand as of March 31, 2014. Capital expenditures were $47,536 in the first quarter of 2014 compared to $95,108 in the first quarter of 2013.

Free Cash Flow in the first quarter of 2014 was approximately $66 thousand compared to negative Free Cash Flow of $(2,153,747) for the first quarter of 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. The primary cause for the year over year variance was the acquisition of Sabio in a cash transaction in March, 2013.

Management Commentary

"While our first quarter has historically been a slow quarter for Sutron, we are not pleased with our first quarter results," stated Raul McQuivey, Chairman and Chief Executive Officer. "The decrease in revenue over the same period in the previous year was largely due to fewer projects awarded at the end of 2013 and beginning of 2014 than we had anticipated and a particularly slow quarter in the amount of orders received by our standard product division. Our performance in the first quarter of 2014 is significantly below our budget, and we have a lot of work to do in the remainder of 2014 to meet our goals. Our focus for the remainder of 2014 will be to drive revenue growth and also to achieve steady improvement in our operating margins and net income. We are encouraged that the Company had good bookings in the month of April recording just over $4 million in new orders and believe that our sales pipeline is robust enough to help us recover from the slow start. We are investing in initiatives we believe will lead to increased market penetration and sales and revenue growth going forward. One of those initiatives is our new website that has been launched and available at www.sutron.com. The new website is interactive and better enables customers to identify Sutron products that will make a difference to their needs. Moreover, to improve our margins, we are making investments to automate some processes that should allow us to produce certain products more efficiently and more cost effectively. Although these initiatives are not immediate cures for Sutron's performance, we believe they will foster and sustain growth for Sutron in the near future."

Conference Call

The Company will host a conference call on May 14, 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 fiscal year 2013 and the first quarter of 2014. The on-line presentation can be accessed via the following webinar link and phone number:

On-line webinar/presentation:

https://attendee.gotowebinar.com/register/8787621643492568577

Audio:
 Toll:+1 (646) 307-1708
 Access Code: 948-227-484

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