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SEC Filings
10-Q
ARGON ST, INC. filed this Form 10-Q on 06/13/1995
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in aircraft for acquisition of data on environmental parameters.  A principal
application of the Company's remote sensing products has been the measurement
of environmental parameters in support of pollution control programs and
environmental impact studies.

       The Company is also engaged in customer-funded projects for the
development of advanced equipment in the remote sensing field.  Some of these
projects may lead to the incorporation of newly developed technology into
existing or future product lines.  These two portions of the business are
conducted by the same pool of personnel using the same equipment and operating
space and constitute a single industry segment.

       The margins associated with these two portions of the business are
different, with standard products generally having higher margins than
customer-funded development projects.  Standard product revenues are generally
of high dollar value, with each contract representing a substantial portion of
total sales each year.  Therefore, the timing of the receipt of a standard
product sales contract as well as the related manufacturing endeavor can have
a material impact on a quarter-to-quarter or year-to-year comparison of the
Company's results of operations.  Most standard product sales contracts and
some customer-funded product development contracts are also accompanied by a
significant deposit.  Therefore, the timing of the contract receipt can have a
material impact on the Company's cash flow.  The results for the remainder of
fiscal 1995 will be largely dependent upon the receipt and the timing of the
receipt of potential contracts currently under discussion.  See "Business
Development - New Orders and Backlog".

Operating Revenue

       Both standard product and product development revenue for the nine
months ended April 30, 1995 were substantially less than that for the
comparable period of fiscal 1994 due to reduced backlog at the beginning of
fiscal 1995 and delays in booking new standard product contracts. 
Customer-funded product development revenue decreased in the nine months ended
April 30, 1995 as compared to the same period of fiscal 1994 for the same
reasons.  Customer-funded product development revenue increased in the quarter
ended April 30, 1995 as compared to the same quarter of fiscal 1994 due
primarily to the low level of standard product workload allowing the Company
to focus additional resources on customer-funded product development revenue
in the three months ended April 30, 1995.

       Approximately $795,000 and $264,000 of the standard product revenue
earned in the nine months and quarter ended April 1994 was related to a
contract on which the Italian customer eventually defaulted in late fiscal
1994 (the "Defaulted Contract").  As was the case in the first nine months of
fiscal 1994, the majority of the revenue earned in the first nine months of
fiscal 1995 was attributable to contracts received prior to the beginning of
the fiscal year.  See "Business Development - New Orders and Backlog".

       The level of the Company's revenues and profits has historically
fluctuated from quarter-to-quarter and from year-to-year as the majority of
its revenue is derived from a small number of high dollar value equipment
sales to a relatively small number of customers.  Such fluctuations are normal
given the Company's reliance on a small number of high value contracts for the
majority of its revenue.  See "Business Development - Growth Plan", but
current levels of revenue are not adequate to sustain the Company, see
"Business Development - New Orders and Backlog" and "Liquidity and Sources of
Capital".

Standard Product vs. Customer-Funded Product Development Revenue and Margins

       Standard product revenue declined substantially in the three and nine

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