Winland Electronics, Inc. (AMEX:WEX), a leading designer and manufacturer of custom electronic control products and systems, today announced net sales of $4.5 million for the first quarter ended March 31, 2010, down $2.6 million, or 36.5 percent compared with the corresponding period in 2009. The company reported a net loss of $539,000, or $0.15 per share versus a net loss of $125,000, or $0.03 per share in the comparable quarter in 2009.

EMS sales for the quarter totaled $3.7 million versus $6.4 million in the first quarter of 2009, a decline of 42.4 percent. Factors negatively impacting sales during the current quarter versus the comparable quarter in 2009 were (1) the completion of a large design engineering project with no similar offsetting project this year; (2) the transition of Select Comfort from Winland; and (3) the decline in sales from our top three customers. Net sales for Winland’s proprietary products segment for the quarter totaled $847,000, an increase of $118,000, or 16.2 percent from the comparable period in 2009.

“Winland continued to establish new customer relationships during the last few quarters, but during the first quarter, sales from these new customers ramped at a slower pace than expected,” said Thomas de Petra, President and Chief Executive Officer of Winland Electronics. “That said, Winland’s sales efforts and the broadening base of customer relationships we are establishing is consistent with our long-term strategy and shows considerable promise over the longer term. We are also pleased with the growth in sales of our proprietary products, which continues to reflect our investment in sales and marketing of this segment of our business.”

Winland’s customer base includes companies in transportation logistics and fleet management, industrial, safety systems, instrumentation, medical and telecommunication.

The Company recorded an operating loss for the quarter of $525,000 versus an operating loss of $65,000 in the comparable quarter in 2009. Gross margin totaled 9.2 percent versus 15.0 percent in the comparable period in 2009.