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
============ ============