MOCON Announces Results for the Second Quarter 2013

MOCON Announces Results for the Second Quarter 2013

MINNEAPOLIS--(BUSINESS WIRE)-- MOCON, Inc. (NAS: MOCO) today reported sales of $13.7 million for the second quarter ended June 30, 2013, an increase of 4 percent compared to $13.2 million for the same quarter in 2012. The net income for the second quarter was $802,000, or $0.14 per diluted share, compared to a net loss of $142,000 or ($0.03) per diluted share, in the second quarter of 2012. Six-month sales totaled $28.1 million, an increase of 26 percent compared to $22.4 million during the first six months of 2012. Net income and diluted earnings per share were $1.7 million and $0.29, respectively, for the first half of 2013, compared to $679,000 and $0.12 for the same period in 2012. Year-to-date amounts for 2012 included only three months of Dansensor's results, which was acquired in April 2012.

The sales increase in the current quarter compared to the same quarter in 2012 was attributable primarily to our Industrial Analyzers and Other segment, which recorded a 23 percent increase in revenues. This increase was driven by sales of environmental monitoring instruments due to increased regulatory concerns and sales of instruments for oil and gas exploration, primarily in the Middle East. Sales in our Permeation and Package Testing segments were comparable to the prior year second quarter.


The company-wide gross margin of 56 percent in the second quarter 2013 was slightly lower than the company's historical levels, although was an improvement from the prior year second quarter margin of 48 percent. The lower than expected percentage in the current quarter was due primarily to a shift in product mix to a higher percentage of our package testing instruments, which traditionally carry lower margins. The lower than normal margin in the prior year second quarter was due to purchase accounting adjustments that were required in connection with the Dansensor acquisition. Selling, general and administrative expenses in the current quarter are slightly higher compared to the same period last year primarily due to higher wage and benefit costs. Our effective tax rate of 3 percent in the current quarter was significantly lower than historical levels due to a change in the income tax rates in Denmark which allowed for a discrete positive adjustment of $258,000 to income tax expense in the second quarter 2013.

"We are encouraged by the fact that our international sales increased 13 percent in the current quarter compared to last year, as both Europe and Asia showed strong improvement. Our domestic sales in the current quarter were lower than last year but still ahead on a year-to-date basis," said Robert L. Demorest, MOCON President and CEO. "While we are satisfied with our top line performance for the first six months this year, we are committed to improving our bottom line by striving to increase our gross margins and reducing our overhead expenses as a percentage of revenues."

About MOCON

MOCON is a leading provider of detectors, instruments, systems and consulting services to research laboratories, production facilities, and quality control and safety departments in the medical, pharmaceutical, food and beverage, packaging, environmental, oil and gas and other industries worldwide. See www.mocon.com for more information.

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements that can be identified by words such as "will," "may," "expect," "believe," "anticipate," "estimate," "continue," or other similar expressions. All forward-looking statements speak only as of the date of this press release. MOCON undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. In addition to the risks and uncertainties of ordinary business operations and conditions in the general economy and the markets in which the company competes, there are important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements made in this press release. These factors include, but are not limited to, the integration and performance of Dansensor, the ability to successfully upgrade our ERP system, the terms of our credit agreement including financial covenants included therein, competition and technological change, setbacks in product development programs, order cancellations, dependence on certain key industries, and other factors set forth in the company's Annual Report on Form 10-K for the year ended December 31, 2012 and other documents MOCON files with or furnishes to the Securities and Exchange Commission.

MOCON's shares are traded on the NASDAQ Global Market System under the symbol MOCO.
MOCON is a registered trademark of MOCON, Inc.; other trademarks are those of their respective holders.

   
MOCON, INC.
SUMMARY CONSOLIDATED FINANCIAL DATA
(in Thousands, Except Per Share Data)
         

INCOME STATEMENT DATA: (unaudited)

Quarters Ended June 30,Six Months Ended June 30,
2013   20122013   2012
Sales
Products$12,947$12,411$26,688$20,928
Consulting services 741 788 1,447 1,455
Total sales 13,688 13,199 28,135 22,383
 
Cost of sales
Products5,6066,39411,6139,389
Consulting services 426 471 888 851
Total cost of sales 6,032 6,865 12,501 10,240
 
Gross profit7,6566,33415,63412,143
 
Selling, general and administrative expenses5,6685,60011,2719,378
Research and development expenses 1,079 1,033 2,198 1,766
Operating income (loss)909(299)2,165999
 
Other income (expense), net (86) 125 (191) 142
Income (loss) before income taxes823(174)1,9741,141
 
Income taxes (benefit) 21 (32) 306 462
 
NET INCOME (LOSS)$802$(142)$1,668$679
 
Net income (loss) per common share:
Basic$0.14$(0.03)$0.30$0.12
Diluted$0.14$(0.03)$0.29$0.12
 
Weighted average common shares outstanding:
Basic5,5385,4745,5295,462
Diluted5,6725,4745,6695,692
 

BALANCE SHEET DATA: (unaudited)

 

June 30, 2013December 31, 2012
Assets:
Cash and marketable securities$5,340$7,911
Accounts receivable, net11,87910,652
Inventories6,6986,345
Other current assets 2,275 2,005
Total current assets26,19226,913
Marketable securities, noncurrent--210
Property, plant and equipment, net5,7895,350
Investment in affiliated company3,2523,304
Goodwill, intangibles and other assets 20,937 21,443
 
Total assets$56,170$57,220
 
Liabilities and Stockholders' Equity:
Revolving lines of credit$4,420$5,328
Notes payable, current2,5622,566
Other current liabilities9,7408,600
Total noncurrent liabilities4,9976,845
Stockholders' equity 34,451 33,881
 
Total liabilities and stockholders' equity$56,170$57,220
 



MOCON, Inc.
Darrell Lee, 763-493-6370
CFO/VP
www.mocon.com

KEYWORDS:   United States  North America  Minnesota

INDUSTRY KEYWORDS:

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