Company: ELSE
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0000897101-25-000245
Chunk: 3

Company: ELECTRO SENSORS INC
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 2
Chunk 3
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 ended March 31, 2025 compared to the same period in 2024. The decrease for the period is the result of lower interest income earned as a result of lower interest rates on Treasury Bills.
 
Income (Loss) Before Income Tax Expense (Benefit)
 
Loss before income tax benefit was $81 for the three-month period ended March 31, 2025, representing a decrease of $97 compared to income before income taxes of $16 for the same period in 2024. The decrease in the period was primarily due to higher operating expenses and a decrease in interest income as described above.

Income Tax Expense (Benefit)
 
Income tax benefit was $17, or (0.8)% of net sales, in the first quarter of 2025 compared to income tax expense of $5, or 0.2% of net sales, in the first quarter of 2024. The effective tax rate for the three-month period ended March 31, 2025 was 21% compared to 31% in the same period of 2024. The 2024 effective income tax rate was higher than normal due to the write-off of deferred tax assets in conjunction with the expiration of unexercised stock options in the period.

 16     

LIQUIDITY AND CAPITAL RESOURCES 
 
Cash and cash equivalents were $9,918 at March 31, 2025 and $9,948 at December 31, 2024. The decrease was primarily the result of a decrease in cash from operating activities.
 
Cash used in operating activities was $30 for the three months ended March 31, 2025 as compared to cash from operating activities of $202 for the three months ended March 31, 2024. The $232 decrease in cash from operating activities was due primarily to a decrease in net income and an increase in trade receivables, partially offset by an increase in accounts payable. The decrease in net income is due to higher operating expenses and lower interest income. The increase in trade receivables is primarily due to the timing of orders. The increase in accounts payable is due to the timing of payments.
 
Subject to the following section, entitled "Supply Chain and Labor Dynamics," the Company believes its ongoing cash requirements will be primarily for capital expenditures, research, and development, working capital, corporate and business development, and