else-20240930.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 000-09587

ELECTRO-SENSORS, INC.

(Exact name of registrant as specified in its charter)

Minnesota	41-0943459
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

6111 Blue Circle Drive
Minnetonka, Minnesota 55343-9108

(Address of principal executive offices)

(952) 930-0100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.10 par value	ELSE	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer ☐
Non-accelerated filer	☒	Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, $0.10 par value, on November 12, 2024 was 3,428,021.

ELECTRO-SENSORS, INC.

Form 10-Q

For the Period Ended September 30, 2024

TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION	4

Item 1. Financial Statements (unaudited):	4

Condensed Balance Sheets – As of September 30, 2024 and December 31, 2023	4
Condensed Statements of Comprehensive Income – For the Three and Nine Months ended September 30, 2024 and September 30, 2023	5
Condensed Statements of Changes in Stockholders' Equity – For the Three and Nine Months ended September 30, 2024 and September 30, 2023	6
Condensed Statements of Cash Flows – For the Nine Months ended September 30, 2024 and September 30, 2023	7
Notes to Condensed Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	20
Item 4. Controls and Procedures	20

PART II – OTHER INFORMATION	21

Item 1. Legal Proceedings	21
Item 1A. Risk Factors	21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3. Defaults Upon Senior Securities	21
Item 4. Mine Safety Disclosures	21
Item 5. Other Information	21
Item 6. Exhibits	21

SIGNATURES	22

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ELECTRO-SENSORS, INC.

CONDENSED BALANCE SHEETS

(in thousands except share and per share amounts)

	September 30, 2024		December 31, 2023
	(unaudited)
ASSETS

Current assets

Cash and cash equivalents	$	10,246	$	9,870
Investments		56		56
Trade receivables, less allowance for credit losses of $11 and $11, respectively		1,182		1,283
Inventories		2,003		1,751
Other current assets		240		179
Income tax receivable		32		0

Total current assets		13,759		13,139

Deferred income tax asset, net		287		355

Property and equipment, net		911		951

Total assets	$	14,957	$	14,445

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable	$	220	$	291
Accrued expenses		639		323
Accrued income taxes		0		76

Total current liabilities		859		690

Commitments and contingencies

Stockholders’ equity

Common stock par value $0.10 per share; authorized 10,000,000 shares; 3,428,021 shares issued and outstanding		342		342
Additional paid-in capital		2,328		2,230
Retained earnings		11,428		11,183
Total stockholders’ equity		14,098		13,755

Total liabilities and stockholders’ equity	$	14,957	$	14,445

See accompanying notes to unaudited condensed financial statements

ELECTRO-SENSORS, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands except share and per share amounts)

(unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2024		2023			2024		2023

Net sales	$	2,512	$	2,057		6,973		6,239
Cost of goods sold		1,247		1,064		3,581		3,156

Gross profit		1,265		993		3,392		3,083

Operating expenses
Selling and marketing		340		307		1,044		1,021
General and administrative		517		494		1,621		1,458
Research and development		235		218		761		724

Total operating expenses		1,092		1,019		3,426		3,203

Operating income (loss)		173		(26	)	(34	)	(120	)

Non-operating income
Interest expense		0		0		0		(1	)
Interest income		117		109		342		297

Total non-operating income, net		117		109		342		296

Income before income tax expense		290		83		308		176

Income tax expense		52		75		63		96

Net income	$	238	$	8		245		80

Other comprehensive loss
Change in unrealized value of available-for-sale securities, net of income tax	$	0	$	(1	)	0		(3	)
Other comprehensive loss		0		(1	)	0		(3	)

Net comprehensive income	$	238	$	7		245		77

Net income per share data:

Basic
Net income per share	$	0.07	$	0.00		0.07		0.02
Weighted average shares		3,428,021		3,428,021		3,428,021		3,428,021

Diluted
Net income per share	$	0.07	$	0.00		0.07		0.02
Weighted average shares		3,434,417		3,428,021		3,440,382		3,428,021

See accompanying notes to unaudited condensed financial statements

ELECTRO-SENSORS, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands except share amounts)

For the three months ended September 30
	Common Stock Issued			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity

June 30, 2024	3,428,021	$	342	$	2,297	$	11,190	$	0		$	13,829

Stock-based compensation expense					31							31
Net income							238					238

Balance September 30, 2024 (unaudited)	3,428,021	$	342	$	2,328	$	11,428	$	0		$	14,098

June 30, 2023	3,428,021	$	342	$	2,163	$	10,980	$	(1	)	$	13,484

Other comprehensive loss									(1	)		(1	)
Stock-based compensation expense					38							38
Net income							8					8

Balance September 30, 2023 (unaudited)	3,428,021	$	342	$	2,201	$	10,988	$	(2	)	$	13,529

For the nine months ended September 30
	Common Stock Issued			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity

December 31, 2023	3,428,021	$	342	$	2,230	$	11,183	$	0		$	13,755

Stock-based compensation expense					98							98
Net income							245					245

Balance September 30, 2024 (unaudited)	3,428,021	$	342	$	2,328	$	11,428	$	0		$	14,098

December 31, 2022	3,428,021	$	342	$	2,163	$	10,908	$	1		$	13,414

Other comprehensive loss									(3	)		(3	)
Stock-based compensation expense					38							38
Net income							80					80

TABLE OF CONTENTS

SEC Form 10-Q filed by Electro-Sensors Inc.