Wed, Mar 19, 6:33 PM (32 days ago)
**Electro-Sensors, Inc. (ELSE) 2024 Annual Report Summary** **Financial Performance:** - **Revenue:** $9,373,000, up 9.6% from $8,555,000 in 2023. - **Net Income:** $446,000, a 62.2% increase from $275,000 in 2023. - **Earnings per Share (EPS):** Basic $0.13, Diluted $0.13 (2023: Basic $0.08, Diluted $0.08). - **Gross Margin:** 48.9% (2023: 49.6%). - **Operating Expenses:** $4,586,000, up 7.3% but down as a percentage of net sales to 48.9% from 50.0%. **Strategic Overview:** - **Products:** Electro-Sensors manufactures industrial production monitoring and process control systems, including speed monitoring, temperature, position, vibration, and hazard monitoring systems. - **Markets:** Sales through internal sales team and distributors in the U.S. and internationally (12% of revenue in 2024). - **Competition:** Faces substantial competition from companies like 4B Components Ltd., Maxi-Tronic, Inc., Siemens Corporation, and Ag Growth International Inc. **Future Outlook:** - **Growth Strategy:** Continued investment in R&D, potential acquisitions, and strategic investments. - **Market Position:** Aims to expand sales in new industries and applications, leveraging superior product design and quality. - **Risk Factors:** Supply chain disruptions, labor market challenges, economic downturns, and geopolitical events. **Financial Condition:** - **Cash and Cash Equivalents:** $9,948,000 (2023: $9,870,000). - **Working Capital:** $12,922,000 (2023: $12,449,000). - **Liquidity:** Management believes cash on hand and operational cash flow will meet requirements for at least the next 12 months. **Market Position Changes:** - **Shareholders:** 55 shareholders of record holding 834,132 shares as of February 27, 2025. - **Dividends:** No dividends paid in 2024; none planned for the foreseeable future. **Risk Factors:** - **Supply Chain:** Potential delays and increased costs due to supply chain disruptions. - **Labor:** Challenges in recruiting and retaining qualified personnel. - **Economic:** Sensitivity to economic downturns and geopolitical events. **Cybersecurity:** - **Measures:** Implemented governance practices, risk assessments, incident response plans, and ongoing training. - **Incidents:** No material breaches reported as of the report date. **Governance and Compliance:** - **Internal Controls:** Effective as of December 31, 2024. - **Legal Proceedings:** No material legal proceedings or threatened litigation. **Conclusion:** Electro-Sensors, Inc. demonstrated solid financial growth in 2024, driven by increased sales and strategic investments. The company faces challenges in supply chain management and labor market dynamics but remains optimistic about future growth opportunities through continued innovation and market expansion.