Electro-Sensors, Inc. Announces Third Quarter 2023 Financial Results

Rhea-AI Summary

Electro-Sensors, Inc. (NASDAQ: ELSE) Announces Q3 2023 Financial Results: Revenue of $2,057,000, Gross Margin of 48.3%, and Cash and Investments of $9.9 million. Net sales decreased by 7.2% and gross margin for the 2023 nine-month period was 49.4%, down from 54.0% in 2022.

Positive

• The company maintained a strong cash position with approximately $9.9 million in cash and investments.
• Despite decreased sales of wired sensor products, there was an increase in sales of wireless hazard monitoring systems, partially offsetting the decline in revenue.
• The company's president, David L. Klenk, acknowledged the impact of increased component and labor costs on gross margin during the quarter.

Negative

• Net sales decreased by 7.2% in the third quarter and 9.8% for the first nine months of 2023 compared to the same periods in 2022.
• Gross margin for the 2023 nine-month period was down to 49.4% from 54.0% in 2022, primarily due to increased product and labor costs.

MINNETONKA, Minn., Nov. 14, 2023 /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, 2023.

• Quarterly revenue of $2,057,000
• Gross margin of 48.3%
• Cash and investments of approximately $9.9 million

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

	Q3 2023				Q3 2022			Change
Net Sales		$	2,057		$	2,216		(7.2)	%
Gross Margin			48.3	%		52.5	%	-420	bps
Operating Income (Loss)		$	(26)		$	119		(121.8)	%
Operating Income Margin			(1.2)	%		5.4	%	-660	bps
Income Before Income Taxes		$	83		$	154		(46.1)	%
Earnings Per Share (diluted)		$	0.00		$	0.04		(100.0)	%

Net sales in the third quarter decreased 7.2% to $2,057,000 from $2,216,000 in the prior-year quarter.  For the first nine months of 2023, net sales decreased 9.8% to $6,239,000 from $6,915,000 for the first nine months of the prior year.  Gross margin for the 2023 nine-month period was 49.4%, down from 54.0% in the corresponding nine months in 2022, primarily due to increased product and labor costs across all product lines. 

"During the third quarter, we experienced decreased sales of our wired sensor products, partially offset by an increase in sales of our wireless hazard monitoring systems," said David L. Klenk, Electro-Sensors' president. "Additionally, gross margin was negatively impacted during the quarter due to increased component and labor costs as the supply chain for both materials and labor continues to be challenging."

A full analysis of results for the period ended September 30, 2023 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 End September 30, 2023 and 2022 (unaudited)
(in thousands except share and per share amounts)
	Three Months Ended September 30,
	2023			2022
Sales	$	2,057		$	2,216
Cost of goods sold		1,064			1,053
Gross profit		993			1,163
Operating expenses		1,019			1,044
Operating income (loss)		(26)			119
Non-operating income, net		109			35
Income before income taxes		83			154
Provision for income taxes		75			32
Net income	$	8		$	122
Earnings (loss) per share – diluted	$	0.00		$	0.04
Average shares outstanding - diluted		3,428,021			3,401,880
	Nine Months Ended September 30,
	2023			2022
Sales	$	6,239		$	6,915
Cost of goods sold		3,156			3,178
Gross profit		3,083			3,737
Operating expenses		3,203			3,997
Operating income (loss)		(120)			(260)
Non-operating income, net		296			43
Income (loss) before income taxes		176			(217)
Provision for (benefit from) income taxes		96			(46)
Net income (loss)	$	80		$	(171)
Earnings (loss) per share – diluted	$	0.02		$	(0.05)
Average shares outstanding - diluted		3,428,021			3,397,664

 

 

Electro-Sensors, Inc.
Balance Sheets
September 30, 2023 and December 31, 2022
(in thousands)
	September 30,			December 31,
	2023			2022
Assets	(unaudited)
Current Assets
Cash and investments	$	9,928		$	9,682
Trade receivables, net		1,066			1,161
Inventories		1,836			1,745
Other current assets		415			225
Total current assets		13,245			12,813
Deferred income tax asset, long-term		198			256
Property and equipment, net		907			975
Total assets	$	14,350		$	14,044
Liabilities and Stockholders' Equity
Current Liabilities
Current maturities of financing lease	$	1		$	6
Accounts payable and accrued expenses		820			624
Total current liabilities		821			630
Stockholders' equity
Common stock		342			342
Additional paid-in capital		2,201			2,163
Retained earnings		10,988			10,908
Other comprehensive income (loss)		(2)			1
Total stockholders' equity		13,529			13,414
Total liabilities and stockholders' equity	$	14,350		$	14,044

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. 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

View original content:https://www.prnewswire.com/news-releases/electro-sensors-inc-announces-third-quarter-2023-financial-results-301988018.html

SOURCE Electro-Sensors, Inc.

FAQ

What are Electro-Sensors, Inc.'s financial results for Q3 2023?

Electro-Sensors, Inc. reported quarterly revenue of $2,057,000, a gross margin of 48.3%, and cash and investments of approximately $9.9 million.

What caused the decrease in net sales?

The decrease in net sales was attributed to decreased sales of wired sensor products, partially offset by an increase in sales of wireless hazard monitoring systems.

Where can I find the full analysis of the results?

The full analysis of results for the period ended September 30, 2023 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.