Electro-Sensors, Inc. Announces Second Quarter 2016 Financial Results

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Aug 12, 2016, 01:05 ET

MINNETONKA, Minn., Aug. 12, 2016 /PRNewswire/ -- Electro-Sensors, Inc. (NASDAQ: ELSE), a leading global provider of machine monitoring sensors and hazard monitoring systems, today announced financial results for the second quarter ended June 30, 2016.

Sales in the quarter increase 17.1% over first quarter
Gross margin of 58.4%
Operating income margin of 10.3%

Consolidated (unaudited; in thousands, except per share data)

	Q2 FY16			Q2 FY15			Change
Net Sales	$	2,009		$	2,048		-1.9	%
Gross Margin		58.4	%		55.0	%	340	bps
Operating Income	$	207		$	127		63.0	%
Operating Income Margin		10.3	%		6.2	%	410	bps
Income Before Income Taxes	$	221		$	764		-71.1	%
Earning Per Share (diluted)	$	.04		$	.14		-71.4	%

Net sales in the second quarter were relatively flat with the same quarter of last year at $2,009,000 compared to $2,048,000 in the prior-year quarter. For the first six months of 2016, net sales decreased 5.3% to $3,725,000 from $3,933,000 for the first six months of the prior year. The decreases were primarily due to lower sales volume in the north central U.S. and overseas territories. Although net sales decreased, there was a favorable shift in the composition, with sales from large orders increasing by over 50%.

"Our 2016 second quarter results show significant improvement over the first quarter as revenue, gross margin and operating margin all improved during the quarter. We are encouraged as our customers are beginning to move forward with strategic projects and plant improvements," said Electro-Sensors President David L. Klenk.

A full analysis of results for the period ended June 30, 2016 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.
Consolidated Statements of Income
For the Three and Six Months Ended June 30, 2016 and 2015 (unaudited)
(in thousands except share and per share amounts)

	Three Months Ended June 30,
	2016		2015
Sales	$	2,009	$	2,048
Cost of goods sold		835		922
Gross profit		1,174		1,126

Operating expenses		967		999

Operating income		207		127

Non-operating income		14		637

Income before income taxes		221		764

Income taxes		77		268

Net income	$	144	$	496

Earnings per share – diluted	$	0.04	$	0.14
Average shares outstanding - diluted		3,692,032		3,653,021


	Six Months Ended June 30,
	2016		2015
Sales	$	3,725	$	3,933
Cost of goods sold		1,617		1,745
Gross profit		2,108		2,188

Operating expenses		2,049		2,028

Operating income		59		160

Non-operating income		27		1,452

Income before income taxes		86		1,612

Income taxes		31		563

Net income	$	55	$	1,049

Earnings per share – diluted	$	0.01	$	0.29
Average shares outstanding - diluted		3,703,021		3,653,021

Electro-Sensors, Inc.
Consolidated Balance Sheets
June 30, 2016 and December 31, 2015
(in thousands)

	June 30,		December 31,
	2016		2015
Assets	(unaudited)

Current Assets
Cash and investments	$	8,048	$	8,441
Trade receivables, net		1,035		689
Inventories		1,517		1,564
Other current assets		146		184
Total current assets		10,746		10,878

Deferred income tax asset, long-term		189		170
Intangible assets, net		1,153		1,270
Property and equipment, net		1,065		1,103
Total assets	$	13,153	$	13,421

Liabilities and Stockholders' Equity

Current Liabilities
Current maturities of note payable	$	0	$	390
Accounts payable and accrued expenses		627		536
Total current liabilities		627		926

Long-term liabilities
Other long-term liabilities		383		455
Total long-term liabilities		383		455

Stockholders' equity
Common stock		339		339
Additional paid-in capital		1,927		1,879
Retained earnings		9,910		9,855
Other comprehensive income		(33)		(33)
Total stockholders' equity		12,143		12,040

Total liabilities and stockholders' equity	$	13,153	$	13,421

About Electro-Sensors

Electro-Sensors, Inc. is a leading manufacturer of machine monitoring sensors and hazard monitoring systems, the application of which span across multiple industries. We know that when it comes to monitoring your most critical production processes, your business relies on accurate and real-time information to ensure the safety of employees and protection of equipment. We understand that unexpected downtime is stressful and expensive. Preventive and predictive maintenance based on feedback gathered from your production processes can greatly reduce the chance that a catastrophic breakdown will occur. Using Electro-Sensors products provides you the confidence to know that your equipment is running properly and within safe limits, and that any deviation will be quickly identified and neutralized. We appreciate our many loyal customers who depend upon our products every day to maintain safety and help run their plants 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
Google+: google.com/+Electro-sensors
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SOURCE Electro-Sensors, Inc.