Exhibit 99.1
FOR IMMEDIATE RELEASE | For More Information Contact |
| Darrell Lee, CFO/VP |
March 7, 2013 | 763-493-6370 / www.mocon.com |
MOCON Fourth Quarter 2012 Revenue Increases 57 Percent
MINNEAPOLIS, MN, March 7, 2013 — MOCON, Inc. (NASDAQ: MOCO) today reported sales of $15.3 million for the fourth quarter ended December 31, 2012, an increase of 57 percent compared to $9.7 million in the same quarter in 2011. This increase was due primarily to the addition of $5.1 million in sales from Dansensor A/S (Dansensor), which was acquired on April 2, 2012, and is included in our Package Testing segment. The Industrial Analyzer segment sales increased 50 percent in the current quarter compared to the prior year’s fourth quarter as a result of strong demand for our gas analyzers, sensors and detectors. The Permeation segment recorded an 18 percent decrease in sales for the fourth quarter 2012 compared to the prior year due to an unusually strong quarter in 2011.
The net income for the fourth quarter was $830,000, or $0.15 per diluted share, compared to net income of $1.4 million or $0.25 per diluted share, in the fourth quarter of 2011. After giving effect to certain non-GAAP adjustments related to the acquisition of Dansensor and non-cash stock option expenses, the company’s earnings totaled $1,055,000, or $0.19 per diluted share, versus $0.26 per diluted share in the comparable period of 2011. A full reconciliation between GAAP and non-GAAP financial measures reflecting the impact of certain discrete items relating to the Dansensor acquisition and non-cash stock option expense is included with the company’s financial tables.
The gross margin of 56 percent in the fourth quarter was lower than the company’s historical levels. This was primarily due to a shift in product mix to a higher percentage of our package testing instruments which traditionally carries lower margins as compared to our permeation products. In addition, the cost of sales includes $202,000 of non-cash amortization relating to the amortization of intangible assets arising out of the Dansensor acquisition. Selling, general and administrative expenses and research and development expenses are higher in the fourth quarter 2012 compared to the same period last year primarily due to the addition of Dansensor’s results.
“We are pleased to report that sales in our Industrial Analyzer and Package Testing segments showed nice increases in the current quarter compared to the prior year which more than offset a decline in our Permeation segment,” said Robert L. Demorest, MOCON President and CEO. “The oil and gas exploration and environmental monitoring markets were strong contributors to the growth in the Industrial Analyzer segment in the current quarter, and the addition of Dansensor’s sales to our traditional headspace and leak detection product sales resulted in a very strong quarter for our Package Testing segment.”
Twelve-month sales totaled $49.9 million, an increase of 34 percent compared to $37.4 million during 2011. Net income and diluted earnings per share were $2.0 million and $0.35, respectively, for the year ended December 31, 2012, compared to $5.5 million and $0.98 for the same period in 2011. After giving effect to certain non-GAAP adjustments related to the acquisition of Dansensor and non-cash stock option expenses, the company’s earnings for the year ended December 31, 2012 totaled $3.7 million, or $0.66 per diluted share, versus $5.7 million, or $1.02 per diluted share in the comparable period of 2011.
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, competition and technological change, worldwide economic and political stability, 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 December 31, | | Years Ended December 31, | |
| | 2012 | | 2011 | | 2012 | | 2011 | |
Sales | | | | | | | | | |
Products | | $ | 14,538 | | $ | 9,102 | | $ | 47,055 | | $ | 34,383 | |
Consulting services | | 713 | | 639 | | 2,886 | | 2,978 | |
Total sales | | 15,251 | | 9,741 | | 49,941 | | 37,361 | |
| | | | | | | | | |
Cost of sales | | | | | | | | | |
Products | | 6,384 | | 3,268 | | 20,893 | | 12,284 | |
Consulting services | | 390 | | 377 | | 1,714 | | 1,609 | |
Total cost of sales | | 6,774 | | 3,645 | | 22,607 | | 13,893 | |
| | | | | | | | | |
Gross profit | | 8,477 | | 6,096 | | 27,334 | | 23,468 | |
| | | | | | | | | |
Selling, general and administrative expenses | | 5,856 | | 3,456 | | 20,339 | | 12,941 | |
Research and development expenses | | 1,026 | | 562 | | 3,635 | | 2,403 | |
Operating income | | 1,595 | | 2,078 | | 3,360 | | 8,124 | |
| | | | | | | | | |
Other income (expense), net | | (96 | ) | 37 | | 20 | | 80 | |
Income before income taxes | | 1,499 | | 2,115 | | 3,380 | | 8,204 | |
| | | | | | | | | |
Income tax expense | | 669 | | 722 | | 1,378 | | 2,753 | |
| | | | | | | | | |
NET INCOME | | $ | 830 | | $ | 1,393 | | $ | 2,002 | | $ | 5,451 | |
| | | | | | | | | |
Net income per common share: | | | | | | | | | |
Basic | | $ | 0.15 | | $ | 0.26 | | $ | 0.37 | | $ | 1.02 | |
Diluted | | $ | 0.15 | | $ | 0.25 | | $ | 0.35 | | $ | 0.98 | |
| | | | | | | | | |
Weighted average common shares outstanding: | | | | | | | | | |
Basic | | 5,506 | | 5,426 | | 5,477 | | 5,343 | |
Diluted | | 5,677 | | 5,660 | | 5,671 | | 5,573 | |
BALANCE SHEET DATA: (unaudited)
| | December 31, 2012 | | December 31, 2011 | |
Assets: | | | | | |
Cash and marketable securities | | $ | 7,911 | | $ | 12,731 | |
Accounts receivable, net | | 10,652 | | 4,777 | |
Inventories | | 6,345 | | 4,480 | |
Other current assets | | 2,005 | | 1,369 | |
Total current assets | | 26,913 | | 23,357 | |
Marketable securities, noncurrent | | 210 | | 5,799 | |
Property, plant and equipment, net | | 5,350 | | 3,175 | |
Investment in affiliated company | | 3,304 | | 3,237 | |
Goodwill, intangibles and other assets | | 21,443 | | 4,137 | |
| | | | | |
Total assets | | $ | 57,220 | | $ | 39,705 | |
| | | | | |
Liabilities and Stockholders’ Equity: | | | | | |
Notes payable, current | | $ | 7,894 | | $ | 0 | |
Other current liabilities | | 8,563 | | 6,140 | |
Total noncurrent liabilities | | 6,845 | | 325 | |
Stockholders’ equity | | 33,918 | | 33,240 | |
| | | | | |
Total liabilities and stockholders’ equity | | $ | 57,220 | | $ | 39,705 | |
Non-GAAP Discussion
The information discussed within this release includes financial results that are in accordance with accounting principles generally accepted in the United States (GAAP). In addition, certain non-GAAP financial measures have been provided that exclude certain charges and expenses. The non-GAAP measures should be read in conjunction with the corresponding GAAP measures and should be considered in addition to, and not as an alternative or substitute for, the measures prepared in accordance with GAAP. The non-GAAP financial measures are provided in an effort to provide information that investors may deem relevant to evaluate results from the company’s core business operations and to compare the company’s performance with prior periods. The non-GAAP financial measures identify and exclude the following discrete items: Dansensor transaction-related expenses, amortization expenses and expenses associated with stock-based compensation required under ASC 718.
MOCON, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
| | Three Months Ended | | Three Months Ended | |
| | December 31, | | | | December 31, | | December 31, | | | | December 31, | |
| | 2012 | | | | 2012 | | 2011 | | | | 2011 | |
| | As Reported | | Adjustments | | Non-GAAP | | As Reported | | Adjustments | | Non-GAAP | |
Sales | | | | | | | | | | | | | |
Products | | $ | 14,538 | | $ | — | | $ | 14,538 | | $ | 9,102 | | $ | — | | $ | 9,102 | |
Consulting services | | 713 | | — | | 713 | | 639 | | — | | 639 | |
Total sales | | 15,251 | | — | | 15,251 | | 9,741 | | — | | 9,741 | |
| | | | | | | | | | | | | |
Cost of sales | | | | | | | | | | | | | |
Products | | 6,384 | | (202 | ) (a) | 6,182 | | 3,268 | | — | | 3,268 | |
Consulting services | | 390 | | — | | 390 | | 377 | | — | | 377 | |
Total cost of sales | | 6,774 | | (202 | ) | 6,572 | | 3,645 | | — | | 3,645 | |
| | | | | | | | | | | | | |
Gross profit | | 8,477 | | 202 | | 8,679 | | 6,096 | | — | | 6,096 | |
| | | | | | | | | | | | | |
Selling, general and administrative expenses | | 5,856 | | (204 | ) (a),(b),(c) | 5,652 | | 3,456 | | (97 | ) (c) | 3,359 | |
Research and development expenses | | 1,026 | | — | | 1,026 | | 562 | | — | | 562 | |
Operating income | | 1,595 | | 406 | | 2,001 | | 2,078 | | 97 | | 2,175 | |
| | | | | | | | | | | | | |
Other income (expense) | | (96 | ) | — | | (96 | ) | 37 | | — | | 37 | |
Income before income taxes | | 1,499 | | 406 | | 1,905 | | 2,115 | | 97 | | 2,212 | |
| | | | | | | | | | | | | |
Income taxes | | 669 | | 181 | (d) | 850 | | 722 | | 33 | (d) | 755 | |
| | | | | | | | | | | | | |
NET INCOME | | $ | 830 | | $ | 225 | | $ | 1,055 | | $ | 1,393 | | $ | 64 | | $ | 1,457 | |
| | | | | | | | | | | | | |
Net income per common share: | | | | | | | | | | | | | |
Basic | | $ | 0.15 | | $ | 0.04 | | $ | 0.19 | | $ | 0.26 | | $ | 0.01 | | $ | 0.27 | |
Diluted | | $ | 0.15 | | $ | 0.04 | | $ | 0.19 | | $ | 0.25 | | $ | 0.01 | | $ | 0.26 | |
| | | | | | | | | | | | | |
Weighted average common shares: | | | | | | | | | | | | | |
Basic | | 5,506 | | | | 5,506 | | 5,426 | | | | 5,426 | |
Diluted | | 5,677 | | | | 5,677 | | 5,660 | | | | 5,660 | |
(a) Represents the amortization of intangible assets associated with the Dansensor acquisition: Cost of sales - $202, SG&A - $70.
(b) Represents the acquisition costs associated with the purchase of Dansensor - $21. Additional acquisition costs are not expected in the future.
(c) Represents non-cash stock-based compensation expense - $113 in 2012; $97 in 2011.
(d) Represents the tax expense related to non-GAAP adjustments. The rate used is the effective rate for the quarter.
MOCON, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
| | Twelve Months Ended | | Twelve Months Ended | |
| | December 31, | | | | December 31, | | December 31, | | | | December 31, | |
| | 2012 | | | | 2012 | | 2011 | | | | 2011 | |
| | As Reported | | Adjustments | | Non-GAAP | | As Reported | | Adjustments | | Non-GAAP | |
Sales | | | | | | | | | | | | | |
Products | | $ | 47,055 | | $ | — | | $ | 47,055 | | $ | 34,383 | | $ | — | | $ | 34,383 | |
Consulting services | | 2,886 | | — | | 2,886 | | 2,978 | | — | | 2,978 | |
Total sales | | 49,941 | | — | | 49,941 | | 37,361 | | — | | 37,361 | |
| | | | | | | | | | | | | |
Cost of sales | | | | | | | | | | | | | |
Products | | 20,893 | | (1,464 | ) (a),(b) | 19,429 | | 12,284 | | — | | 12,284 | |
Consulting services | | 1,714 | | — | | 1,714 | | 1,609 | | — | | 1,609 | |
Total cost of sales | | 22,607 | | (1,464 | ) | 21,143 | | 13,893 | | — | | 13,893 | |
| | | | | | | | | | | | | |
Gross profit | | 27,334 | | 1,464 | | 28,798 | | 23,468 | | — | | 23,468 | |
| | | | | | | | | | | | | |
Selling, general and administrative expenses | | 20,339 | | (1,484 | ) (b),(c),(d) | 18,855 | | 12,941 | | (389 | ) (d) | 12,552 | |
Research and development expenses | | 3,635 | | — | | 3,635 | | 2,403 | | — | | 2,403 | |
Operating income | | 3,360 | | 2,948 | | 6,308 | | 8,124 | | 389 | | 8,513 | |
| | | | | | | | | | | | | |
Other income | | 20 | | — | | 20 | | 80 | | — | | 80 | |
Income before income taxes | | 3,380 | | 2,948 | | 6,328 | | 8,204 | | 389 | | 8,593 | |
| | | | | | | | | | | | | |
Income taxes | | 1,378 | | 1,202 | (e) | 2,580 | | 2,753 | | 131 | (e) | 2,884 | |
| | | | | | | | | | | | | |
NET INCOME | | $ | 2,002 | | $ | 1,746 | | $ | 3,748 | | $ | 5,451 | | $ | 258 | | $ | 5,709 | |
| | | | | | | | | | | | | |
Net income per common share: | | | | | | | | | | | | | |
Basic | | $ | 0.37 | | $ | 0.31 | | $ | 0.68 | | $ | 1.02 | | $ | 0.05 | | $ | 1.07 | |
Diluted | | $ | 0.35 | | $ | 0.31 | | $ | 0.66 | | $ | 0.98 | | $ | 0.04 | | $ | 1.02 | |
| | | | | | | | | | | | | |
Weighted average common shares: | | | | | | | | | | | | | |
Basic | | 5,477 | | | | 5,477 | | 5,343 | | | | 5,343 | |
Diluted | | 5,671 | | | | 5,671 | | 5,573 | | | | 5,573 | |
(a) Represents the revaluation of Dansensor inventory at the time of acquisition - $865. This revaluation will not occur again in the future.
(b) Represents the amortization of intangible assets associated with the Dansensor acquisition: Cost of sales - $599, SG&A - $207.
(c) Represents the acquisition costs associated with the purchase of Dansensor - $812. Additional acquisition costs are not expected in the future.
(d) Represents non-cash stock-based compensation expense - $465 in 2012; $389 in 2011.
(e) Represents the tax expense related to non-GAAP adjustments. The rate used is the effective rate for the year.
