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SEC Filings
ARGON ST, INC. filed this Form 10-Q on 12/13/1995
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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.  The Company receives the majority
of its revenue from a small number of relatively large contracts.
Standard product contracts are generally of higher dollar value than
customer-funded product development contracts, with each contract
representing a substantial portion of total revenue 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 Company has embarked on its growth plan and is in discussion with
several potential standard product customers regarding possible
contracts.  The Company is hopeful that it will receive these contracts
in fiscal 1996, although no assurances can be given.  See "Business
Development".  The Company's future liquidity, financial position and
results of operations and its ability to successfully execute its growth
plan are dependent upon its ability to generate increases in new business
and cash flow to a level sufficient to allow the Company to maintain its
compliance with the terms and covenants of its new line of credit
agreement.  The Company's long-term financial prospects are dependent
upon the Company's ability to successfully implement its growth plan and
attain consistent profitability.  The results of fiscal 1996 will be
largely dependent upon the receipt and the timing of the receipt of
potential contracts currently under discussion.  See "Business
Development" and "Liquidity and Sources of Capital".

Operating Revenue

Operating revenue was significantly higher in the first quarter of fiscal
1996 than in the first quarter of fiscal 1995, but was not adequate to
produce a profit for the quarter.  The vast majority of the increase in
standard product revenue is attributable to the two standard product
contracts received in the fourth quarter of fiscal 1995, one of which was
completed in the first quarter of fiscal 1996; the other was completed in
November, 1995.   Product development revenue declined in the first
quarter of fiscal 1996 as compared to the same period one year earlier
due to the low level of product development backlog at the beginning of
fiscal 1996 and the low level of product-development contracts received
in the quarter.

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