Electro-Sensors, Inc. Announces Third Quarter 2022 Financial Results

Rhea-AI Summary

Electro-Sensors, Inc. (NASDAQ: ELSE) reported Q3 2022 revenue of $2.216 million, a 2.9% increase year-over-year. The gross margin stood at 52.5%, down from 55.9% a year ago. Operating income surged 495% to $119,000, with a margin of 5.4%. Net income reached $122,000, translating to earnings per share of $0.04. Despite challenges in the macroeconomic environment, the growth was driven by increased sales of HazardPRO systems and traditional wired products.

Positive

• Q3 revenue increased by 2.9% year-over-year.
• Operating income rose by 495%, indicating strong operational efficiency.
• Earnings per share improved to $0.04 from $0.00.

Negative

• Gross margin decreased by 340 basis points compared to the previous year.
• Nine-month net loss of $171,000, a decline from a net income of $229,000 in the prior year.

MINNETONKA, Minn., Nov. 14, 2022 /PRNewswire/ -- Electro-Sensors, Inc. (NASDAQ: ELSE), a leading global provider of machine monitoring sensors and hazard monitoring systems, today announced financial results for the third quarter ended September 30, 2022.

• Third quarter revenue of $2,216,000, up 2.9% from prior-year period
• Gross margin of 52.5%
• Cash and investments of approximately $9.6 million

Selected Financial Information (unaudited; in thousands, except per share data)

	Q3 2022				Q3 2021			Change
Net Sales		$	2,216		$	2,154		2.9	%
Gross Margin			52.5	%		55.9	%	-340	bps
Operating Income		$	119		$	20		495.0	%
Operating Income Margin			5.4	%		0.9	%	450	bps
Income Before Income Taxes		$	154		$	21		633.3	%
Earnings Per Share (diluted)		$	0.04		$	0.00		100.0	%

 

Net sales in the third quarter increased 2.9% to $2,216,000 from $2,154,000 in the prior-year quarter.  For the first nine months of 2022, net sales increased 6.1% to $6,915,000 from $6,517,000 for the first nine months of the prior year.  The increase in net sales for the quarter was primarily due to increased sales of HazardPRO wireless hazard monitoring systems.  The increase for the nine month-period was primarily a result of increased domestic sales of traditional wired products for industrial automation and agricultural applications.

Gross margin for the 2022 nine-month period was 54.0%, down slightly from 54.8% in the corresponding nine months in 2021, primarily due to an increase in raw material costs across all product lines.

"Our third quarter revenue represents another solid quarter, with revenue growing 2.9% over the comparable prior-year period," said David L. Klenk, Electro-Sensors' president. "While the macroeconomic environment has certainly become more challenging in recent quarters, our results demonstrate continued success in providing industry-leading sensors and hazard monitoring systems to customers for a broad range of applications."

A full analysis of results for the period ended September 30, 2022 is available in the Company's Form 10-Q, which is available on the Company's website at www.electro-sensors.com or through the Securities and Exchange Commission's Edgar database at www.sec.gov.

 

Electro-Sensors, Inc. Statements of Income For the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited) (in thousands except share and per share amounts)
	Three Months Ended September 30,
	2022			2021
Sales	$	2,216		$	2,154
Cost of goods sold		1,053			950
Gross profit		1,163			1,204
Operating expenses		1,044			1,184
Operating income		119			20
Non-operating income		35			1
Income before income taxes		154			21
Provision for income taxes		32			4
Net income	$	122		$	17
Earnings per share – diluted	$	0.04		$	0.00
Average shares outstanding - diluted		3,482,996			3,439,377

 

	Nine Months Ended September 30,
	2022			2021
Sales	$	6,915		$	6,517
Cost of goods sold		3,178			2,947
Gross profit		3,737			3,570
Operating expenses		3,997			3,283
Operating income (loss)		(260)			287
Non-operating income		43			3
Income (loss) before income taxes		(217)			290
Provision for (benefit from) income taxes		(46)			61
Net income (loss)	$	(171)		$	229
Earnings (loss) per share – diluted	$	(0.05)		$	0.07
Average shares outstanding - diluted		3,397,664			3,435,595

 

Electro-Sensors, Inc. Balance Sheets September 30, 2022 and December 31, 2021 (in thousands)
	September 30,			December 31,
	2022			2021
Assets	(unaudited)
Current Assets
Cash and investments	$	9,574		$	9,769
Trade receivables, net		1,180			1,005
Inventories		1,790			1,663
Other current assets		231			191
Total current assets		12,775			12,628
Deferred income tax asset, long-term		223			208
Intangible assets, net		0			38
Property and equipment, net		955			1,017
Total assets	$	13,953		$	13,891
Liabilities and Stockholders' Equity
Current Liabilities
Current maturities of financing lease	$	7		$	6
Accounts payable and accrued expenses		893			691
Total current liabilities		900			697
Long-term liabilities
Financing lease, net of current maturities		1			6
Total long-term liabilities		1			6
Stockholders' equity
Common stock		340			339
Additional paid-in capital		2,075			2,041
Retained earnings		10,637			10,808
Total stockholders' equity		13,052			13,188
Total liabilities and stockholders' equity	$	13,953		$	13,891

 

About Electro-Sensors

Electro-Sensors, Inc. is an industry leading designer and manufacturer of rugged and reliable machine monitoring sensors and wireless/wired hazard monitoring systems applied across multiple industries and applications. These products improve processes by protecting people, safeguarding systems, reducing downtime, and preventing waste. Most standard products ship within one to two days and have an industry-leading 5-year warranty. Electro-Sensors is proud to be an ISO9001:2015 quality certified company and is committed to providing excellent customer service and technical support. Founded in 1968 and located in Minnetonka, Minnesota, Electro-Sensors provides its loyal customers with reliable products that improve safety and help plants operate with greater efficiency, productivity and control.

Cautionary Statement Regarding Forward Looking Statements

This press release may include statements about possible or anticipated future financial performance, business activities, plans, or opportunities.  These forward-looking statements may include the words "will," "should," "believes," "expects," "anticipates," "intends" or similar expressions.  For these forward-looking statements, the Company claims the protection of the safe harbor for forward−looking statements contained in federal securities laws.  Forward-looking statements reflect the company's current views with respect to future events and financial performance and include any statement that does not directly relate to a current or historical fact.  These forward-looking statements are subject to a number of factors, risks and uncertainties, including those disclosed in our periodic filings with the SEC that could cause actual performance, activities, plans, or opportunities after the date the statements are made to differ significantly from those indicated in the forward-looking statements.

For more information please visit our website at: www.electro-sensors.com. Also look us up on:
LinkedIn: linkedin.com/company/electro-sensors-inc- 
Twitter: twitter.com/ESIsensors 
Facebook: facebook.com/ElectroSensors

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SOURCE Electro-Sensors, Inc.

FAQ

What were the financial results for Electro-Sensors in Q3 2022?

Electro-Sensors reported Q3 2022 revenue of $2.216 million, a 2.9% increase from the prior year, with a gross margin of 52.5%.

How did Electro-Sensors perform in terms of earnings per share for Q3 2022?

Earnings per share for Q3 2022 were $0.04, an increase from $0.00 in the previous year.

What are the key drivers for Electro-Sensors' revenue growth in Q3 2022?

The revenue growth was primarily driven by increased sales of HazardPRO wireless hazard monitoring systems and traditional wired products.

What were the net income results for Electro-Sensors in the nine-month period ending September 30, 2022?

For the nine-month period ended September 30, 2022, Electro-Sensors reported a net loss of $171,000, compared to a net income of $229,000 in the previous year.