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SEC Filings
10-Q
ARGON ST, INC. filed this Form 10-Q on 06/13/1995
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Other Revenue

       Other income, for the periods presented, is comprised principally of
interest and rental income.  The level of interest income is determined by
cash on hand and interest rates.  The timing of contract receipt and level of
deposits received have a substantial impact on such income.  The Company does
not expect significant interest or rental income for the remainder of the
current fiscal year.

Major Customers

       The customers to whom the Company sells change from year to year.  No
single customer has generated a majority of the Company's revenue during any
consecutive years. The U.S. government accounted for a majority of the
Company's operating revenue in both fiscal 1994 and the first nine months of
fiscal 1995.  It is too early to determine what impact, if any, the attempts
to balance the federal budget may have on the Company's revenue in the short
or long term. 

       Although Italian customers have been an important source of revenue for
the Company in recent years, generating 49% and 42%  of operating revenue for
the nine and three month periods ended April 30, 1994, respectively, such
customers generated only 5% and 11% of operating revenue during the comparable
periods of fiscal 1995. Had the Company not recognized revenue on the
Defaulted Contract in fiscal 1994, Italian customers would have accounted for
28% and 6% of operating revenue during the nine and three month periods ended
April 30, 1994, respectively. Sales to Italian customers  are expected to
generate a significant percentage of revenue in the remainder of fiscal 1995
as the Company  expects to substantially complete the Defaulted Contract prior
to fiscal year-end.   See "Business Development - New Orders and Backlog".

Business Development

Growth Plan

       One challenge facing the Company is to develop additional markets that
will allow future growth in revenues and profits.  Management has developed a
three-pronged growth plan to add revenue and profits to the Company's current
core business.    

       In furtherance of the growth plan, the Company successfully tested the
Airborne Digital Camera during fiscal 1995 and delivered its first production
version in March 1995.  The Company is studying various methods of
capitalizing on this new product, including selling it and using it to
establish a service segment.  The Company is researching various image
processing and Geographic Information System packages that may be bundled with
the camera developed by the Company.    

       The Company is exploring various avenues of establishing a domestic 
and/or international remote sensing service  program, including the formation
of partnerships and joint ventures.  The Company has also hired a consultant
to help the Company in developing strategies for the exploitation of the
domestic and international airborne remote sensing markets.  The Company has
built an Airborne Multispectral System (AMS) that it intends to use in
performing domestic and international remote sensing service programs.  

       If successful, these strategies are expected to reduce fluctuations in
the Company's revenue and earnings and enhance the Company's profitability and
shareholder value.  Although the Company has received one contract for a
domestic environmental monitoring project and hopes to receive additional
contracts for domestic pilot projects in fiscal 1995, revenues are not
expected to be affected materially until at least late fiscal 1996.


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