Company: ELSE
Filing Date: 2025-03-19
Form Type: 10-K
Source: 0000897101-25-000160
Chunk: 38

Company: ELECTRO SENSORS INC
Filing Date: 2025-03-19
Form: 10-K
Item: Item 5
Chunk 38
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.8 
%

3.2 
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The following paragraphs discuss the Company’s performance for years ended December 31, 2024 and 2023.

Comparison of 2024 vs 2023 (dollars in thousands)

Net Sales

Net sales for 2024 were $9,373, an increase of $818, or 9.6%, from $8,555 in 2023.  The increase was largely driven by higher sales of
HazardPRO wireless sensors and systems for agricultural applications. 
International sales during the year increased on a percentage basis as compared
to 2023, and comprised 11.5% of revenue, up from 10.3% in the prior year. 

13    

Gross Profit

Gross profit for 2024 increased $337, or 7.9%, to $4,582 from $4,245 in 2023. Gross margin in 2024 was 48.9% compared to 49.6% in 2023. The decrease in gross margin was primarily due to an increase in raw material and labor costs across all product lines, partially offset by price increases introduced in the second half of 2024.  We have provided additional information regarding
material and labor costs in Item 1 of this Annual Report on Form 10-K. 

Operating Expenses

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%.  The increase in operating expense dollars was primarily due to additional headcount and stock-based compensation.

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 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%. The increase was primarily due to additional sales headcount and leadership, and variable compensation due to higher revenue.      

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 General and administrative expenses increased $164, or 8.3%, to $2,132 in 2024 from $1,968 in 2023, but decreased as a percentage of net sales to 22.7% from 23.0%. The increase was primarily due to increased headcount and stock-based compensation expense.      

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 Research and development