Electro-Sensors, Inc. Announces Third Quarter 2019 Financial Results

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Nov 12, 2019, 16:14 ET

MINNETONKA, Minn., Nov. 12, 2019 /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, 2019.

Quarterly revenue of $2,049,000, down 4.5% from prior year quarter
Year-to-date revenue of $6,317,000, up 12% from similar prior year period
Cash and investments of approximately $8.9 million

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

	Q3 2019			Q3 2018		Change
Net Sales		$	2,049	$	2,146	-4.5%
Gross Margin			52.4%		55.7%	-330 bps
Operating Income (Loss)		$	(18)	$	199	-109.0%
Operating Income (Loss) Margin			(0.9)%		9.3%	-1020 bps
Income Before Income Taxes		$	25	$	237	-89.5%
Earnings Per Share (diluted)		$	.01	$	.06	-83.3%

Net sales in the second quarter decreased 4.5% to $2,049,000 from $2,146,000 in the prior-year quarter. For the first nine months of 2019, net sales increased 12.0% to $6,317,000 from $5,642,000 for the first nine months of the prior year. The year-to-date increase is primarily due to increased sales of HazardPRO^TM wireless hazard monitoring systems. In addition, international sales increased 51% for the nine-month period, primarily driven by sales into Canada.

"We are very encouraged by the sales growth of HazardPRO wireless systems," said David L. Klenk, Electro-Sensors' president. "We continue to believe these systems deliver the most advanced hazard monitoring solution at a very competitive overall price point."

A full analysis of results for the period ended September 30, 2019 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 (Loss)
For the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)
(in thousands except share and per share amounts)

	Three Months Ended September 30,
	2019		2018
Sales	$	2,049	$	2,146
Cost of goods sold		975		951
Gross profit		1,074		1,195

Operating expenses		1,092		996

Operating income (loss)		(18)		199

Non-operating income, net		43		38

Income before income taxes		25		237

Provision for income taxes		6		50

Net income	$	19	$	187

Earnings per share – diluted	$	0.01	$	0.06
Average shares outstanding - diluted		3,398,533		3,398,238

	Nine Months Ended September 30,
	2019		2018
Sales	$	6,317	$	5,642
Cost of goods sold		2,941		2,559
Gross profit		3,376		3,083

Operating expenses		3,392		3,240

Operating income (loss)		(16)		(157)

Non-operating income, net		132		90

Income (loss) before income taxes		116		(67)

Provision for (benefit from) income taxes		25		(9)

Net income (loss)	$	91	$	(58)

Earnings (loss) per share – diluted	$	0.03	$	(0.02)
Average shares outstanding - diluted		3,397,385		3,395,521

Electro-Sensors, Inc.
Balance Sheets
September 30, 2019 and December 31, 2018
(in thousands)

	September 30,		December 31,
	2019		2018
Assets	(unaudited)

Current Assets
Cash and investments	$	8,903	$	8,799
Trade receivables, net		965		896
Inventories		1,719		1,618
Other current assets		194		155
Total current assets		11,781		11,468

Deferred income tax asset, long-term		196		192
Intangible assets, net		555		565
Property and equipment, net		1,063		1,050
Total assets	$	13,595	$	13,275

Liabilities and Stockholders' Equity

Current Liabilities
Current maturities of financing lease	$	5	$	5
Accounts payable and accrued expenses		736		521
Total current liabilities		741		526

Long-term liabilities
Financing lease, net of current maturities		20		24
Total long-term liabilities		20		24

Stockholders' equity
Common stock		339		339
Additional paid-in capital		2,027		2,019
Retained earnings		10,426		10,335
Other comprehensive income		42		32
Total stockholders' equity		12,834		12,725

Total liabilities and stockholders' equity	$	13,595	$	13,275

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

SOURCE Electro-Sensors, Inc.