Aug 4 2011
MOCON, Inc. (NasdaqGM:MOCO) today reported its operating results for the second quarter ended June 30, 2011.
Net sales for the second quarter 2011 were $9,082,000, an increase of 24 percent compared to $7,351,000 for the second quarter 2010. Operating income increased 37 percent to $1,745,000 for the second quarter 2011 compared to $1,271,000 for the same period last year. Net income for the second quarter 2011 was $1,224,000, a 12 percent increase compared to $1,092,000 in the second quarter 2010. Diluted earnings per share were $0.22 in the second quarter 2011 compared to $0.20 for the same period in 2010. Six-month sales were $18,157,000, an increase of 26 percent compared to $14,444,000 for the first six months of 2010. Operating income increased 64 percent to $3,798,000 for the first half of 2011 compared to $2,316,000 for the same period last year. Net income and diluted earnings per share were $2,541,000 and $0.46, respectively, for the first half of 2011, increases of 26 percent and 21 percent, respectively, compared to $2,014,000 and $0.38 for the same period in 2010.
We experienced double-digit sales growth in our three major product groups in the second quarter 2011 compared to second quarter 2010. Sales of our permeation instruments and services, which amounted to 58 percent of our consolidated sales in the second quarter 2011, increased 29 percent compared to the same period in 2010. This increase was reflected in both our domestic and foreign markets as both areas recorded double-digit growth. Sales of our gas analyzer instruments, sensors and detectors product group, which accounted for 19 percent of our consolidated sales in the second quarter 2011, increased 21 percent compared to the second quarter in 2010. Sales of well-logging instruments and OEM detectors to the energy sector accounted for the majority of the increase. Sales of our packaging products and services, which accounted for 17 percent of our consolidated sales in the second quarter 2011, increased 22 percent compared to the same period in the prior year, and was due primarily to higher shipments of headspace analyzers. On a consolidated basis, sales increased 35 percent domestically and 16 percent in our foreign markets.
Our strong gross margin of 61 percent in the second quarter 2011 was the result of favorable sales mix, higher production volume and improved cost of sales on certain gas analysis instruments. Our selling, general and administrative expenses were higher in the second quarter 2011 compared to the same quarter in the prior year primarily due to increased headcount and related benefits, sales commissions, professional fees and travel and marketing expense. Our research and development expenses in the second quarter 2011 were higher than the same period in the prior year due to a planned release of an additional product for the food safety markets.
"We are pleased to report another strong quarter for the Company. It is encouraging to see our domestic sales increase by 35 percent for the quarter, led by a 91 percent increase in domestic permeation sales, our largest product line. Our continuing R&D efforts are showing tangible results as we are close to releasing the GreenLight™ Model 930, which is the third product in the series that is targeted for the food safety markets. We feel that the financial markets have rewarded us for the recent strong quarters as the Company's stock price recently hit an all time high," commented Robert L. Demorest, MOCON President and CEO.