Accessibility StatementSkip Navigation MINNETONKA, Minn., Nov. 13, 2025 /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, 2025. Selected Financial Information (unaudited, in thousands, except per share data) | Q3 2025 | Q3 2024 | Change | | | | | | --- | --- | --- | --- | --- | --- | --- | | Net Sales | $ | 2,748 | $ | 2,512 | 9.4 | % | | Gros ...

Financial Performance - Net sales for Q3 2025 were $2,748, an increase of $236, or 9.4%, from $2,512 in Q3 2024[66] - Gross profit for Q3 2025 was $1,458, an increase of $193, or 15.3%, compared to Q3 2024, with a gross margin of 53.1%[67] - Total operating expenses for Q3 2025 increased by $185, or 16.9%, to $1,277, representing 46.5% of net sales[68] - Income before income tax expense decreased to $272 in Q3 2025, down $18 from $290 in Q3 2024[71] Non-Operating Income - Net non-operating income decreased by $26, or 22.2%, for Q3 2025 compared to Q3 2024, primarily due to lower interest income[70] Cash Flow - Cash and cash equivalents were $10,571 as of September 30, 2025, up from $9,948 at December 31, 2024[73] - Cash from operating activities for the nine months ended September 30, 2025, was $642, an increase of $236 from $406 in the same period of 2024[74] Expenses - Selling and marketing expenses in Q3 2025 increased by $94 to $434, or 27.6%, from Q3 2024[76] Growth Strategy - The company continues to seek growth opportunities through internal product development and external acquisitions[80] Off-Balance Sheet Arrangements - The company had no off-balance sheet arrangements or transactions as of September 30, 2025[81]

Core Insights - Electro-Sensors, Inc. reported a second quarter revenue of $2,400,000, reflecting an 8.3% increase compared to $2,217,000 in the same quarter of 2024 [2][3] - The gross margin improved to 51.2% in Q2 2025, up from 47.2% in Q2 2024, attributed to a refined pricing strategy [2][3] - The company achieved an operating loss of $2, significantly improved from a loss of $107 in the prior year [2][4] Financial Performance - Net sales for the first six months of 2025 reached $4,639,000, a 4.0% increase from $4,461,000 in the same period of 2024 [2][4] - The income before income taxes for Q2 2025 was $80,000, a substantial increase from $2,000 in Q2 2024, marking a 3900% change [2][4] - Earnings per share (diluted) for Q2 2025 was $0.02, compared to $0.00 in Q2 2024, indicating a 100% increase [2][6] Balance Sheet Highlights - As of June 30, 2025, total assets amounted to $15,160,000, up from $14,885,000 at the end of 2024 [7][9] - Cash and investments increased to approximately $10.2 million from $10.0 million in December 2024 [5][7] - Total stockholders' equity rose to $14,391,000 from $14,333,000 at the end of 2024 [9]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents unaudited financial statements and management's analysis of the company's financial performance and condition [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents unaudited condensed financial statements, including balance sheets, statements of operations, equity, and cash flows, with notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $10,182 | $9,948 | | Investments | $56 | $56 | | Trade receivables, net | $1,282 | $1,309 | | Inventories, net | $2,010 | $1,964 | | Total current assets | $13,782 | $13,474 | | Total assets | $15,160 | $14,885 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------ | :---------------- | | Accounts payable | $287 | $146 | | Accrued expenses | $482 | $365 | | Total current liabilities | $769 | $552 | | Total stockholders' equity | $14,391 | $14,333 | | Total liabilities and stockholders' equity | $15,160 | $14,885 | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) | (in thousands except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $2,400 | $2,217 | $4,639 | $4,461 | | Gross profit | $1,228 | $1,047 | $2,312 | $2,127 | | Total operating expenses | $1,230 | $1,154 | $2,483 | $2,334 | | Operating loss | $(2) | $(107) | $(171) | $(207) | | Net income (loss) | $59 | $(4) | $(5) | $7 | | Basic Net income per share | $0.02 | $0.00 | $0.00 | $0.00 | | Diluted Net income per share | $0.02 | $0.00 | $0.00 | $0.00 | [Condensed Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) | (in thousands) | Common Stock Issued (Amount) | Additional Paid-in Capital | Retained Earnings | Total Stockholders' Equity | | :------------- | :--------------------------- | :------------------------- | :---------------- | :------------------------- | | **June 30, 2025** ||||| | Balance Dec 31, 2024 | $344 | $2,360 | $11,629 | $14,333 | | Stock-based comp. | | $63 | | $63 | | Net loss | | | $(5) | $(5) | | Balance June 30, 2025 | $344 | $2,423 | $11,624 | $14,391 | | **June 30, 2024** ||||| | Balance Dec 31, 2023 | $342 | $2,230 | $11,183 | $13,755 | | Stock-based comp. | | $67 | | $67 | | Net income | | | $7 | $7 | | Balance June 30, 2024 | $342 | $2,297 | $11,190 | $13,829 | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Net cash from operating activities | $247 | $44 | | Net cash used in investing activities | $(13) | $(26) | | Net increase in cash and cash equivalents | $234 | $18 | | Cash and cash equivalents, beginning | $9,948 | $9,870 | | Cash and cash equivalents, ending | $10,182 | $9,888 | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed financial statements - The Company manufactures and markets monitoring and control systems for industrial machine applications, selling products through internal staff and distributors across the United States, Canada, Latin America, Europe, and Asia[21](index=21&type=chunk) - Cash and cash equivalents include highly liquid debt instruments with maturities of three months or less, primarily invested in commercial paper, money market accounts, and Treasury Bills. Cash equivalents were **$7,973 thousand** as of June 30, 2025, and **$7,980 thousand** as of December 31, 2024[22](index=22&type=chunk) - The allowance for credit losses on trade receivables increased to **$28 thousand** at June 30, 2025, from **$11 thousand** at December 31, 2024[27](index=27&type=chunk) - Product revenue is recognized upon shipment, while service revenue is recognized when provided, typically within a week. Certain contracts may have a second performance obligation for HazardPRO product initialization[28](index=28&type=chunk) - The Company's investments consist of common equity securities in two private U.S. companies, valued at an estimated fair value of **$56 thousand** as of both June 30, 2025, and December 31, 2024. These are classified as Level 3 inputs in the fair value hierarchy due to an undeterminable market[39](index=39&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) Inventories, net (in thousands) | Inventory Component | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Raw Materials | $1,300 | $1,334 | | Work In Process | $365 | $301 | | Finished Goods | $365 | $339 | | Reserve for Obsolescence | $(20) | $(10) | | **Total Inventories, net** | **$2,010** | **$1,964** | - Total unrecognized compensation expense for outstanding stock options was **$95 thousand** as of June 30, 2025, expected to be recognized through October 2028. For restricted stock units, unrecognized compensation expense was **$273 thousand**, expected through August 2028[46](index=46&type=chunk)[51](index=51&type=chunk) - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, making permanent 100% bonus depreciation and immediate deduction for domestic R&E expenses. The Company is evaluating the impact on deferred tax balances for the quarter ended September 30, 2025[56](index=56&type=chunk) - On August 7, 2025, Michael Zipoy retired from the Board, resulting in the acceleration of vesting for his outstanding options and RSU awards[57](index=57&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results of operations, covering sales, profit, expenses, liquidity, and future outlook [Forward-Looking Statements](index=15&type=section&id=FORWARD-LOOKING%20STATEMENTS) Discusses statements regarding future financial results, growth strategies, and business developments, subject to inherent risks - The report contains forward-looking statements regarding growth strategy, future financial results, product development, sales efforts, and other business matters, which are subject to uncertainties and risks[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Critical Accounting Estimates](index=15&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) Identifies key accounting estimates that require significant judgment and could materially impact financial results - There have been no changes to the Company's critical accounting estimates during the three and six-month periods ended June 30, 2025[62](index=62&type=chunk) [Recent Developments](index=16&type=section&id=Recent%20Developments) Highlights significant events and changes impacting the company's operations and financial position - Michael Zipoy retired from the Board effective August 8, 2025, leading to the acceleration of vesting for his outstanding options and RSU awards[63](index=63&type=chunk) [Selected Financial Information](index=16&type=section&id=SELECTED%20FINANCIAL%20INFORMATION) Selected Financial Information as a Percentage of Net Sales | | Three Months Ended June 30 | Six Months Ended June 30 | | :-------------------------- | :------------------------- | :----------------------- | | | 2025 | 2024 | 2025 | 2024 | | Net sales | 100.0% | 100.0% | 100.0% | 100.0% | | Cost of goods sold | 48.8% | 52.8% | 50.2% | 52.3% | | Gross profit | 51.2% | 47.2% | 49.8% | 47.7% | | Total operating expenses | 51.3% | 52.0% | 53.5% | 52.3% | | Operating loss | (0.1)% | (4.8)% | (3.7)% | (4.6)% | | Net income (loss) | 2.4% | (0.2)% | (0.1)% | 0.2% | [Results of Operations](index=16&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's financial performance, including net sales, gross profit, and operating expenses, for the reported periods Net Sales (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Q2 | $2,400 | $2,217 | $183 | 8.3% | | YTD | $4,639 | $4,461 | $178 | 4.0% | - The increase in Q2 net sales was primarily driven by increased sales to international and OEM customers[66](index=66&type=chunk) Gross Profit (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Q2 | $1,228 | $1,047 | $181 | 17.3% | | YTD | $2,312 | $2,127 | $185 | 8.7% | Gross Margin | Period | 2025 | 2024 | | :----- | :---- | :---- | | Q2 | 51.2% | 47.2% | | YTD | 49.8% | 47.7% | - The increase in gross margin for both periods was due to an increase in average selling prices implemented to partially offset increased material costs[67](index=67&type=chunk) Total Operating Expenses (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Q2 | $1,230 | $1,154 | $76 | 6.6% | | YTD | $2,483 | $2,334 | $149 | 6.4% | - Total operating expenses increased primarily due to costs associated with additional employee headcount[68](index=68&type=chunk) Operating Expense Breakdown (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Selling & Marketing | $441 | $353 | $861 | $704 | | General & Administrative | $575 | $537 | $1,162 | $1,104 | | Research & Development | $214 | $264 | $460 | $526 | - Selling and marketing expenses increased due to higher wages and benefits from hiring sales leadership. General and administrative expenses rose due to independent auditor expenses and nonreimbursable sales tax, partially offset by reduced contract personnel. Research and development expenses decreased due to reduced employee headcount[70](index=70&type=chunk) Net Non-Operating Income (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :----- | :--- | :--- | :--------- | :--------- | | Q2 | $82 | $109 | $(27) | (24.8)% | | YTD | $170 | $225 | $(55) | (24.4)% | - The decrease in non-operating income was a result of lower interest income earned due to lower interest rates on Treasury Bills[69](index=69&type=chunk) Income (Loss) Before Income Tax Expense (in thousands) | Period | 2025 | 2024 | Change ($) | | :----- | :--- | :--- | :--------- | | Q2 | $80 | $2 | $78 | | YTD | $(1) | $18 | $(19) | - Q2 income before tax increased due to higher net sales and gross margin, partially offset by higher operating expenses and lower interest income. YTD loss before tax decreased due to higher operating expenses and lower interest income, partially offset by higher net sales and gross margin[71](index=71&type=chunk) Income Tax Expense (in thousands) and Effective Tax Rate | Period | Income Tax Expense 2025 | Income Tax Expense 2024 | Effective Tax Rate 2025 | Effective Tax Rate 2024 | | :----- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Q2 | $21 | $6 | 26.3% | 300.0% | | YTD | $4 | $11 | 400.0% | 61.1% | - The 2025 YTD effective tax rate was higher than normal due to the adjustment of the calendar year 2024 balance due. The 2024 effective tax rates were higher than normal due to the write-off of deferred tax assets related to expired unexercised stock options[72](index=72&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Assesses the company's ability to meet short-term and long-term obligations and fund operations Cash and Cash Equivalents (in thousands) | Period | Amount | | :----- | :----- | | June 30, 2025 | $10,182 | | December 31, 2024 | $9,948 | - The increase in cash and cash equivalents was primarily due to an increase in cash from operating activities[73](index=73&type=chunk) Cash Flows from Operating Activities (in thousands) | Period | 2025 | 2024 | Change ($) | | :----- | :--- | :--- | :--------- | | YTD | $247 | $44 | $203 | - The increase in operating cash flow was primarily due to an increase in accounts payable and a decrease in accounts receivable, partially offset by an increase in inventory[74](index=74&type=chunk) - Cash used in investing activities was **$13 thousand** for the six months ended June 30, 2025, compared to **$26 thousand** in the prior year, primarily for the purchase of office equipment[75](index=75&type=chunk) - The Company expects existing cash, cash equivalents, investments, and cash generated from operations to be sufficient to meet cash requirements for at least the next 12 months[77](index=77&type=chunk) [Supply Chain and Labor Dynamics](index=19&type=section&id=Supply%20Chain%20and%20Labor%20Dynamics) Discusses the impact of supply chain stability, price increases, delivery delays, and labor market challenges on operations - The Company's supply chain is stabilizing but still experiences unexpected price increases and delivery delays, necessitating efforts to find alternative component sources and modify product designs[78](index=78&type=chunk) - Challenges in the labor market for qualified employees are leading to delays in filling positions and potentially impacting profit margins[79](index=79&type=chunk) - Changes in transportation and freight availability may hinder timely and cost-effective material and product shipments[79](index=79&type=chunk) [Future Corporate and Business Development Activities](index=19&type=section&id=Future%20Corporate%20and%20Business%20Development%20Activities) Outlines the company's strategies for internal growth, technology partnerships, and potential acquisitions - The Company continues to seek growth opportunities internally through its existing product portfolio and externally through technology partnerships or acquisitions[80](index=80&type=chunk) - A special committee of the Board of Directors is exploring business development and other strategic alternatives[80](index=80&type=chunk) [Off-balance Sheet Arrangements](index=19&type=section&id=Of%20-balance%20Sheet%20Arrangements) Reports on any material off-balance sheet transactions or obligations not recognized on the balance sheet - As of June 30, 2025, the Company had no off-balance sheet arrangements or transactions[81](index=81&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Confirms no applicable quantitative and qualitative disclosures regarding market risk for the reported period - Not Applicable[82](index=82&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Details the evaluation of disclosure controls and procedures and reports on changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=20&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Assesses the effectiveness of controls designed to ensure timely and accurate financial reporting - The Company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[83](index=83&type=chunk) [Changes in Internal Control Over Financial Reporting](index=20&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Reports on any material changes to the company's internal control system during the reporting period - There were no changes in the Company's internal control over financial reporting during the second quarter of 2025 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[84](index=84&type=chunk) [PART II – OTHER INFORMATION](index=21&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) Provides additional information not covered in the financial statements, including legal proceedings and exhibits [Item 1. Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) Confirms the absence of any material legal proceedings involving the company - None[86](index=86&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) States that no new material risk factors are applicable to the company for the current reporting period - Not Applicable[88](index=88&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=21&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered sales of equity securities or related use of proceeds during the period - None[88](index=88&type=chunk) [Item 3. Defaults Upon Senior Securities](index=21&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms that there were no defaults on senior securities during the reporting period - None[88](index=88&type=chunk) [Item 4. Mine Safety Disclosures](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Indicates that mine safety disclosures are not applicable to the company's operations - Not Applicable[88](index=88&type=chunk) [Item 5. Other Information](index=21&type=section&id=Item%205.%20Other%20Information) States that there is no other material information to report for the period - None[88](index=88&type=chunk) [Item 6. Exhibits](index=21&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed as part of the Form 10-Q, including certifications and iXBRL financial data Exhibits Filed | Exhibit | Description | | :------ | :---------- | | 31.1 | Certification of CEO and CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 32.1 | Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | 101 | iXBRL financial information (Condensed Balance Sheets, Statements of Operations, Changes in Stockholders' Equity, Cash Flows, and Notes). | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL). | [SIGNATURES](index=22&type=section&id=SIGNATURES) Contains the required signatures of the company's authorized officers, certifying the accuracy of the report - The report was duly signed on August 12, 2025, by David L. Klenk, Chief Executive Officer and Chief Financial Officer[89](index=89&type=chunk)[91](index=91&type=chunk)

Core Insights - Electro-Sensors, Inc. reported a slight decline in net sales for Q1 FY25, totaling $2,239,000, a decrease of 0.2% compared to Q1 FY24 [2][4] - The gross margin improved to 48.4%, up from 48.1% in the previous year, indicating better cost management [2][3] - The company experienced a significant operating loss of $169,000, which is a 69% increase in losses compared to the prior year [2][3] - The net loss for the quarter was $64,000, contrasting with a net income of $11,000 in Q1 FY24 [3][4] Financial Performance - Net sales for Q1 FY25 were $2,239,000 compared to $2,244,000 in Q1 FY24, reflecting a minor decrease [2][3] - Gross profit for the quarter was $1,084,000, slightly up from $1,080,000 in the same period last year [3] - Operating expenses rose to $1,253,000 from $1,180,000, contributing to the increased operating loss [3] - Non-operating income decreased to $88,000 from $116,000, impacting overall profitability [3] Balance Sheet Highlights - As of March 31, 2025, total assets increased to $15,086,000 from $14,885,000 at the end of 2024 [5] - Cash and investments were approximately $10,000,000, showing a slight decrease from $10,004,000 [5] - Total stockholders' equity remained relatively stable at $14,300,000 compared to $14,333,000 at the end of 2024 [5] Company Overview - Electro-Sensors, Inc. specializes in machine monitoring sensors and hazard monitoring systems, serving various industries [6] - The company is ISO9001:2015 certified, emphasizing its commitment to quality and customer service [6] - Founded in 1968 and based in Minnetonka, Minnesota, Electro-Sensors aims to enhance safety and operational efficiency for its clients [6]

Financial Performance - Net sales for Q1 2025 were $2,239, a decrease of $5, or 0.2%, from $2,244 in Q1 2024, primarily due to reduced sales of HazardPRO wireless products [57]. - Gross profit for Q1 2025 was $1,084, an increase of $4, or 0.4%, with a gross margin of 48.4%, up from 48.1% in Q1 2024 [58]. - Total operating expenses increased by $73, or 6.2%, to $1,253 in Q1 2025, rising as a percentage of net sales to 56.0% from 52.6% [60]. - Net non-operating income decreased by $28, or 24.1%, in Q1 2025 due to lower interest income from Treasury Bills [61]. - Loss before income tax benefit was $81 in Q1 2025, a decrease of $97 compared to income before income taxes of $16 in Q1 2024 [62]. Cash Flow and Liquidity - Cash and cash equivalents were $9,918 at March 31, 2025, down from $9,948 at December 31, 2024, primarily due to decreased cash from operating activities [65]. - Cash used in operating activities was $30 in Q1 2025, compared to cash from operating activities of $202 in Q1 2024, a decrease of $232 [66]. - The company believes its ongoing cash requirements will be met through existing cash and cash generated from operations for at least the next 12 months [67]. Strategic Outlook - The company is exploring growth opportunities through internal product development and external technology partnerships or acquisitions [70]. - Supply chain dynamics may negatively impact operations and profit margins due to unexpected price increases and delivery delays [68].

Core Insights - Electro-Sensors, Inc. reported record annual revenue of $9.373 million for the year ended December 31, 2024, representing a 9.6% increase from $8.555 million in 2023, primarily driven by higher sales of HazardPRO wireless sensors in agricultural applications [2][3][6] - The company's gross margin decreased slightly to 48.9% from 49.6% year-over-year, reflecting a reduction of 70 basis points [2][6] - Operating income improved significantly, with a loss of $4 thousand in FY24 compared to a loss of $28 thousand in FY23, indicating an 85.7% improvement [2][5] - Net income for FY24 was $446 thousand, up from $275 thousand in FY23, marking a substantial increase [5][6] - Earnings per share (diluted) rose to $0.13 from $0.08, reflecting a 62.5% increase [2][7] Financial Performance - Net sales increased to $9,373,000 in FY24 from $8,555,000 in FY23, a growth of 9.6% [2][5] - Gross profit for FY24 was $4,582,000, compared to $4,245,000 in FY23 [5] - Operating expenses rose to $4,586,000 in FY24 from $4,273,000 in FY23 [5] - Non-operating income increased to $440,000 in FY24 from $406,000 in FY23 [5] Balance Sheet Highlights - Total assets as of December 31, 2024, were $14,885,000, up from $14,445,000 in 2023 [8][9] - Cash and investments increased to $10,004,000 in FY24 from $9,926,000 in FY23 [8] - Stockholders' equity rose to $14,333,000 in FY24 from $13,755,000 in FY23 [9] Market Position - The company experienced growth in both wired and wireless product families, with HazardPRO wireless products growing at a faster rate than traditional wired products [3] - International sales accounted for 11.5% of net sales in FY24, up from 10.3% in FY23 [2]

Financial Performance - Net sales for 2024 were $9,373, an increase of $818, or 9.6%, from $8,555 in 2023, driven by higher sales of HazardPRO wireless sensors and systems for agricultural applications [78]. - Gross profit for 2024 increased $337, or 7.9%, to $4,582 from $4,245 in 2023, with a gross margin of 48.9% compared to 49.6% in 2023 [79]. - Net income for 2024 was $446, an increase of $171, or 62.2%, compared to $275 in 2023, with basic and diluted earnings per share of $0.13 and $0.08, respectively [86]. - Operating loss was $4 in 2024 compared to $28 in 2023, a decrease of $24, or 85.7% [81]. - Total assets increased to $14,885,000 in 2024 from $14,445,000 in 2023, representing a growth of 3.0% [116]. - Total stockholders' equity grew to $14,333,000 in 2024, up from $13,755,000 in 2023, marking a 4.2% increase [116]. Expenses and Costs - Total operating expenses increased $313, or 7.3%, to $4,586 in 2024 from $4,273 in 2023, but decreased as a percentage of net sales to 48.9% from 50.0% [80]. - Selling and marketing expenses increased $109, or 8.2%, to $1,441 in 2024 from $1,332 in 2023, but decreased as a percentage of net sales to 15.4% from 15.6% [84]. - Research and development expenses increased $40, or 4.1%, to $1,013 in 2024 compared to $973 in 2023, but decreased as a percentage of net sales to 10.8% from 11.4% [84]. - Total advertising expense was $42,000 in 2024, down from $46,000 in 2023, reflecting a decrease of approximately 8.7% [149]. - Cash generated from operating activities was $129 in 2024, a decrease of $192 from $321 in 2023, primarily due to increased inventory and decreased accounts payable [89]. Cash and Liquidity - Cash and cash equivalents were $9,948 and $9,870 at December 31, 2024 and 2023, respectively, with working capital increasing to $12,922 from $12,449 [88]. - Cash and cash equivalents at year-end increased to $9,948,000 in 2024 from $9,870,000 in 2023, a rise of 0.8% [121]. - Total inventories rose to $1,964,000 in 2024 from $1,751,000 in 2023, marking an increase of approximately 12.2% [169]. Strategic Plans and Investments - The company believes ongoing cash usage requirements will be primarily for capital expenditures, potential acquisitions, and research and development [92]. - The company plans to continue making strategic investments to enhance product development and market reach [125]. Internal Controls and Governance - As of December 31, 2024, the Company's internal controls over financial reporting were deemed effective, following the COSO framework [205]. - The management has assessed the effectiveness of internal control over financial reporting as of December 31, 2024, confirming its reliability [205]. - There were no changes in the Company's internal control over financial reporting during the fourth quarter of fiscal year 2024 that materially affected its effectiveness [206]. - The Company has adopted a Code of Ethics and Business Conduct applicable to all officers and employees [212]. - The Company has established insider trading policies to promote compliance with relevant laws and regulations [214]. Stock and Compensation - The Company reported basic earnings per share (EPS) of $0.13 for 2024, compared to $0.08 for 2023, indicating a 62.5% increase [156]. - The company recognized stock-based compensation expense of $46 million in 2024, up from $38 million in 2023, with unrecognized compensation expense related to stock options at $115 million [179]. - The Company has 290,000 securities available for issuance under equity compensation plans, with a weighted average exercise price of $4.03 [220]. - The company granted 35,000 restricted stock units in 2023, with 21,000 units vesting in 2024, leaving 84,000 unvested as of December 31, 2024 [183]. Tax and Regulatory Matters - The company reported a total federal and state income tax provision of $(10) million in 2024, compared to $103 million in 2023, reflecting a significant decrease due to R&D credits [193]. - The Company has a valuation allowance on deferred tax assets of $311,000 in 2024, up from $279,000 in 2023, reflecting an increase of about 11.5% [151]. Meeting and Shareholder Information - The Company will hold its Annual Meeting of Shareholders on April 23, 2025 [210].

Core Insights - Electro-Sensors, Inc. reported a quarterly revenue of $2,512,000 for Q3 2024, representing a 22.1% increase compared to the same period last year [1][2] - The company's gross margin improved to 50.4%, up from 48.3% in Q3 2023, indicating better cost management and pricing strategies [2][3] - Operating income for Q3 2024 was $173,000, a significant turnaround from an operating loss of $26,000 in Q3 2023, reflecting a 765.4% increase [2][4] Financial Performance - Net sales for the nine-month period ended September 30, 2024, increased by 11.8% to $6,973,000 from $6,239,000 in the prior-year period [2][4] - The income before income taxes for Q3 2024 was $290,000, up 249.4% from $83,000 in Q3 2023 [2][4] - Earnings per share (diluted) for Q3 2024 was $0.07, compared to $0.00 in the same quarter last year, marking a 100% increase [2][5] Operational Highlights - Sales growth was driven by both wired sensor products and wireless HazardPRO™ products, primarily due to increased demand in industrial automation and agricultural applications [3] - The improvement in gross margin was attributed to a stabilizing supply chain and price adjustments made earlier in the year [3] - The company reported cash and investments of approximately $10.3 million as of September 30, 2024, compared to $9.9 million at the end of 2023 [6][9] Company Overview - Electro-Sensors, Inc. specializes in designing and manufacturing machine monitoring sensors and hazard monitoring systems, serving various industries [9] - The company is ISO9001:2015 certified and emphasizes customer service and technical support [9]

Financial Performance - Net sales for Q3 2024 were $2,512, an increase of $455, or 22.1%, from $2,057 in Q3 2023[62] - Gross profit for Q3 2024 was $1,265, an increase of $272, or 27.4%, compared to Q3 2023, with a gross margin of 50.4%[63] - Net income for Q3 2024 was 9.5%, compared to 0.5% in Q3 2023[61] Operating Expenses - Total operating expenses for Q3 2024 were $1,092, an increase of $73, or 7.2%, but decreased as a percentage of net sales to 43.5% from 49.5%[64] - Total operating expenses for the nine months ended September 30, 2024, were $3,426, an increase of $223, or 7.0%, but decreased as a percentage of net sales to 49.1% from 51.3%[64] Cash Flow and Liquidity - Cash and cash equivalents increased to $10,246 as of September 30, 2024, from $9,870 at December 31, 2023[72] - Cash from operating activities was $406 for the nine months ended September 30, 2024, compared to $255 for the same period in 2023[73] - The company believes its ongoing cash requirements will be sufficient to meet needs through at least the next 12 months[75] Taxation - The effective tax rate for the nine-month period ended September 30, 2024, was 20.5%, compared to 54.5% in the same period of 2023[71] Growth Strategy - The company is exploring growth opportunities through technology partnerships and potential acquisitions[78]