Winland Electronics, Inc. (NYSE Amex: WEX) today reported sales of Proprietary Environmental Monitoring products of $769,000 for the third quarter ended September 30, 2011, down $69,000, or 8.2 percent, from the $838,000 that the company reported in the same period in 2010. Net loss from the quarter totaled $300,000, or $0.08 per share versus a loss of $305,000, or $0.08 per share for the same period in 2010. The company reported an operating loss of $296,000 for the three months ended September 30, 2011 compared to an operating loss of $198,000 for the comparable period in 2010. Gross margins decreased to 34.9 percent from 47.3 percent for the three months ended September 30, 2011 compared to the same period in 2010. Declines in gross margin for the three months ended September 30, 2011 were expected based on changing from a direct internal manufacturing operation to outsourcing the company’s manufacturing requirements upon the sale of its EMS business segment. “Sales in the third quarter were down as a result of a decline in volume from our largest customer, a situation attributable to the customer’s current inventory positions and the timing of replacement orders,” said Brian Lawrence, Winland’s Chief Financial Officer and Senior Vice President. “On the positive side, however, the company realized increased sales to its other top ten customers, with sales up 10 percent quarter-over-quarter and 16 percent year-over-year.” The company’s lower cost structure from its restructuring in late 2010 and early 2011 resulted in General and Administrative expenses of $191,000 for the second quarter, down $177,000 year-over-year. G&A expenses were down as a result of significant decreases in salaries of $78,000 and board of director fees totaling $28,000, decreased information technology fees of $24,000 and lower professional fees of $20,000. Sales and marketing expenses were $270,000 for the three months ended September 30, 2011, an increase of $44,000 over the third quarter of 2010. The increase was due to increased advertising expenses of $20,000 and increased marketing and trade show expenses of $20,000 as the company incurred costs in advance of an expected release of its new EA800-ip product.