Electro-Sensors, Inc. Announces Third Quarter 2020 Financial Results

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Nov 12, 2020, 17:00 ET

MINNETONKA, Minn., Nov. 12, 2020 /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, 2020.

Quarterly revenue of $1,899,000, down 7.3% from prior-year quarter
Gross margin of 52.2%
Cash and investments of approximately $9.1 million

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

	Q3 2020		Q3 2019		Change
Net Sales	$	1,899	$	2,049	-7.3%
Gross Margin		52.2%		52.4%	-20bps
Operating Loss	$	(54)	$	(18)	-200.0%
Operating Loss Margin		(2.9)%		(0.9)%	-200bps
Income (Loss) Before Income Taxes	$	(54)	$	25	-316.0%
Earnings (Loss) Per Share (diluted)	$	(0.01)	$	0.01	-200.0%

Net sales in the third quarter decreased 7.3% to $1,899,000 from $2,049,000 in the prior-year quarter. For the first nine months of 2020, net sales decreased 6.4% to $5,914,000 from $6,317,000 for the first nine months of the prior year. Sales during the quarter continued to be negatively impacted by the COVID-19 pandemic, which significantly impacted our ability to travel and visit customers.

"While COVID-19 continues to negatively impact our business, sales of our traditional wire-based products were fairly stable during the quarter," said David L. Klenk, Electro-Sensors' president. "The larger impact was to sales of our HazardPRO wireless systems, which typically require greater engagement with the customer to move the sales process forward."

A full analysis of results for the period ended September 30, 2020 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, 2020 and 2019 (unaudited) (in thousands except share and per share amounts)


	Three Months Ended September 30,
	2020		2019
Sales	$	1,899	$	2,049
Cost of goods sold		907		975
Gross profit		992		1,074

Operating expenses		1,046		1,092

Operating loss		(54)		(18)

Non-operating income		0		43

Income (loss) before income taxes		(54)		25

Provision for (benefit of) income taxes		(8)		6

Net income (loss)	$	(46)	$	19

Earnings (loss) per share – diluted	$	(0.01)	$	0.01
Average shares outstanding - diluted		3,395,521		3,398,533


	Nine Months Ended September 30,
	2020		2019
Sales	$	5,914	$	6,317
Cost of goods sold		2,825		2,941
Gross profit		3,089		3,376

Operating expenses		3,265		3,392

Operating loss		(176)		(16)

Non-operating income		31		132

Income (loss) before income taxes		(145)		116

Provision for (benefit from) income taxes		(26)		25

Net income (loss)	$	(119)	$	91

Earnings (loss) per share – diluted	$	(0.04)	$	0.03
Average shares outstanding - diluted		3,395,521		3,397,385

Electro-Sensors, Inc. Balance Sheets September 30, 2020 and December 31, 2019 (in thousands)


	September 30,		December 31,
	2020		2019
Assets	(unaudited)

Current Assets
Cash and investments	$	9,103	$	8,830
Trade receivables, net		1,039		1,036
Inventories		1,659		1,695
Other current assets		219		159
Total current assets		12,020		11,720

Deferred income tax asset, long-term		227		203
Intangible assets, net		294		489
Property and equipment, net		1,010		1,063
Total assets	$	13,551	$	13,475

Liabilities and Stockholders' Equity

Current Liabilities
Current maturities of financing lease	$	6	$	5
Accounts payable and accrued expenses		754		560
Total current liabilities		760		565

Long-term liabilities
Financing lease, net of current maturities		14		19
Total long-term liabilities		14		19

Stockholders' equity
Common stock		339		339
Additional paid-in capital		2,035		2,030
Retained earnings		10,403		10,522
Total stockholders' equity		12,777		12,891

Total liabilities and stockholders' equity	$	13,551	$	13,475

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.