Electro-Sensors, Inc. Announces Third Quarter 2017 Financial Results

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Nov 13, 2017, 15:08 ET

MINNETONKA, Minn., Nov. 13, 2017 /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, 2017.

Quarterly revenue of $2,054,000
Sales increased 11.8% compared to third quarter of 2016
Gross margin of 55.2%
Operating income margin of 10.8%

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

	Q3 2017				Q3 2016			Change
Net Sales		$	2,054		$	1,837		11.8	%
Gross Margin			55.2	%		54.5	%	70	bps
Operating Income		$	222		$	29		665.5	%
Operating Income Margin			10.8	%		1.5	%	930	bps
Income Before Income Taxes		$	234		$	35		568.6	%
Earning Per Share (diluted)		$	.04		$	.01		300.0	%

Net sales in the third quarter increased 11.8% to $2,054,000 from $1,837,000 in the prior-year quarter. For the first nine months of 2017, net sales increased 8.0% to $6,005,000 from $5,562,000 for the first nine months of the prior year. The increase in the third quarter was primarily due to an increase in the average size of large orders in both our HazardPRO™ wireless hazard monitoring systems and legacy products. Additionally, in the nine months ended September 30, 2017, the Company experienced significant growth in our international markets.

"During our third quarter we once again delivered increases in both revenue and operating income over the comparable period in the prior year. We are especially pleased that we experienced growth in both our legacy products as well as our HazardPRO wireless hazard monitoring systems," said Electro-Sensors President David L. Klenk.

A full analysis of results for the period ended September 30, 2017 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, 2017 and 2016 (unaudited) (in thousands except share and per share amounts)

	Three Months Ended September 30,
	2017		2016
Sales	$	2,054	$	1,837
Cost of goods sold		920		835
Gross profit		1,134		1,002

Operating expenses		912		973

Operating income		222		29

Non-operating income		12		6

Income before income taxes		234		35

Income taxes		82		12

Net income	$	152	$	23

Earnings per share – diluted	$	0.04	$	0.01
Average shares outstanding - diluted		3,400,988		3,396,776


	Nine Months Ended September 30,
	2017		2016
Sales	$	6,005	$	5,562
Cost of goods sold		2,648		2,452
Gross profit		3,357		3,110

Operating expenses		2,942		3,022

Operating income		415		88

Non-operating income		30		29

Income before income taxes		445		117

Income taxes		154		43

Net income	$	291	$	74

Earnings per share – diluted	$	0.09	$	0.02
Average shares outstanding - diluted		3,396,899		3,396,102

Electro-Sensors, Inc. Balance Sheets September 30, 2017 and December 31, 2016 (in thousands)

	September 30,		December 31,
	2017		2016
Assets	(unaudited)

Current Assets
Cash and investments	$	8,605	$	8,267
Trade receivables, net		1,042		770
Inventories		1,528		1,515
Other current assets		177		240
Total current assets		11,352		10,792

Deferred income tax asset, net		254		198
Intangible assets, net		858		1,035
Property and equipment, net		992		1,033
Total assets	$	13,456	$	13,058

Liabilities and Stockholders' Equity

Current Liabilities
Current maturities of note payable	$	142	$	0
Accounts payable and accrued expenses		645		543
Total current liabilities		787		543

Long-term liabilities
Other long-term liabilities		0		195
Total long-term liabilities		0		195

Stockholders' equity
Common stock		339		339
Additional paid-in capital		2,001		1,953
Retained earnings		10,348		10,057
Other comprehensive loss		(19)		(29)
Total stockholders' equity		12,669		12,320

Total liabilities and stockholders' equity	$	13,456	$	13,058

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
Facebook: facebook.com/ElectroSensors

SOURCE Electro-Sensors, Inc.