Company: ELSE
Filing Date: 2025-03-19
Form Type: 10-K
Source: 0000897101-25-000160
Chunk: 40

Company: ELECTRO SENSORS INC
Filing Date: 2025-03-19
Form: 10-K
Item: Item 5
Chunk 40
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870 at December 31, 2024 and 2023, respectively.  Working capital was $12,922 at December 31, 2024 compared to $12,449 at December 31, 2023.   The increases were due primarily to cash generated from operations. 

Cash generated from operating activities was $129 in 2024 compared to $321 in 2023, a decrease of $192.  The decrease was primarily due to an increase in inventory and a decrease in accounts payable; partially offset by the increase in net income.  The increase in inventory is primarily due to the timing of receipt of inventory and increased labor and material costs.  The decrease in accounts payable is due to the timing of payments.  The increase in net income is primarily due to increased net sales, partially offset by higher operating expenses.

Cash used in investing activities in 2024 was $51, compared to $70 in 2023.  The cash used in both periods was for the purchase of office equipment.

Cash used in financing activities was $6 during 2023.  There was no cash flow from financing activities during 2024.

15    

Subject to the following section, entitled "Supply Chain and Labor Dynamics," the Company believes its ongoing cash usage requirements will be primarily for capital expenditures, potential acquisitions, investments we believe present good opportunities for the Company and its shareholders, research and development, working capital, and growth initiatives.  Management believes that cash on hand and any cash provided by operations will be sufficient to meet our cash requirements through at least the next 12 months.

Supply Chain and Labor Dynamics

We purchase parts and materials from various manufacturers and distributors. While we believe that our supply chain has begun to stabilize, we still occasionally see unexpected price increases and delivery delays requiring us to intervene and remediate.  To meet these challenges, we are seeking additional sources for components and modifying product designs to accommodate new components that are more readily available at competitive prices. There is no guarantee that we will continue to be successful in modifying these designs and sourcing alternative components and material.  As a result, we could experience significant delays in receiving certain components needed to make timely customer deliveries, as well as increased costs that erode gross margins.  Current supply chain dynamics may have a negative effect on the efficiency of our operations, our customer base, and the domestic or worldwide economy.  Furthermore, the labor market for qualified employees able to fill our various open positions is challenging and becoming