Mocon (MOCO) 10-Q 9 Aug 16 2016 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 02, 2016
Document Information [Line Items]
Entity Registrant Name	MOCON INC
Entity Central Index Key	67,279
Trading Symbol	moco
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		5,798,603
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 6,789	$ 6,344
Trade accounts receivable, less allowance for doubtful accounts of $165 in 2016 and $141 in 2015	10,449	8,786
Other receivables	296	326
Inventories	7,655	7,790
Prepaid income taxes	260	559
Prepaid expenses, other	962	897
Total current assets	26,411	24,702
Property, plant and equipment, net of accumulated depreciation of $8,289 in 2016 and $8,154 in 2015	5,588	5,995
Goodwill	7,508	7,437
Intangible assets, net	8,636	8,986
Other assets	90	88
Deferred income taxes	212	211
TOTAL ASSETS	48,445	47,419
Current liabilities:
Current maturities of notes payable	60	65
Accounts payable	3,048	3,033
Accrued compensation and related expenses	3,860	3,969
Other accrued expenses	1,086	811
Accrued product warranties	232	223
Dividends payable	637	637
Deferred revenue	1,436	862
Total current liabilities	10,359	9,600
Revolving lines of credit	2,350	2,793
Notes payable	65	93
Obligations to former employees	35	34
Deferred income taxes	1,051	1,227
Accrued income taxes	201	201
Total noncurrent liabilities	3,702	4,348
Total liabilities	14,061	13,948
Shareholders' equity:
Capital stock – undesignated. Authorized 3,000,000 shares; none issued and outstanding in 2016 and 2015
Common stock – $0.10 par value. Authorized 22,000,000 shares; issued and outstanding 5,798,103 shares in 2016 and 5,792,126 shares in 2015	580	579
Additional paid-in capital	7,829	7,412
Retained earnings	30,628	30,700
Accumulated other comprehensive loss	(4,653)	(5,220)
Total shareholders' equity	34,384	33,471
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 48,445	$ 47,419

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Trade accounts receivable, allowance for doubtful accounts	$ 165	$ 141
Property, plant and equipment, accumulated depreciation	$ 8,289	$ 8,154
Capital stock, authorized shares (in shares)	3,000,000	3,000,000
Capital stock, shares issued (in shares)	0	0
Capital stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, authorized (in shares)	22,000,000	22,000,000
Common stock, shares issued (in shares)	5,798,103	5,792,126
Common stock, shares outstanding (in shares)	5,798,103	5,792,126

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenue:
Products	$ 12,244	$ 12,032	$ 23,628	$ 24,201
Services	2,702	2,338	5,514	4,842
Consulting	685	679	1,219	1,366
Total revenue	15,631	15,049	30,361	30,409
Cost of revenue:
Products	5,085	5,497	10,055	10,783
Services	1,294	1,016	2,468	2,064
Consulting	481	511	963	1,058
Total cost of revenue	6,860	7,024	13,486	13,905
Gross profit	8,771	8,025	16,875	16,504
Selling, general and administrative expenses	5,870	5,707	12,008	11,978
Research and development expenses	1,298	1,126	2,501	2,195
Realignment Expense	750	128	750	128
Operating income	853	1,064	1,616	2,203
Other income (expense), net	309	(113)	274	138
Income before income taxes	1,162	951	1,890	2,341
Income tax expense	373	305	613	787
Net income	$ 789	$ 646	$ 1,277	$ 1,554
Net income per common share:
Basic (in dollars per share)	$ 0.14	$ 0.11	$ 0.22	$ 0.27
Diluted (in dollars per share)	$ 0.14	$ 0.11	$ 0.22	$ 0.27
Basic (in shares)	5,794	5,750	5,793	5,746
Diluted (in shares)	5,817	5,846	5,813	5,840
Cash dividends declared per common share (in dollars per share)	$ 0.11	$ 0.11	$ 0.22	$ 0.22

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net income	$ 789	$ 646	$ 1,277	$ 1,554
Other comprehensive income (loss):
Cumulative translation adjustment	(330)	520	567	(2,193)
Comprehensive income (loss)	$ 459	$ 1,166	$ 1,844	$ (639)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Volatile Analysis Corporation [Member]
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of business	$ (352,000)
Changes in operating assets and liabilities:
Inventories	30,000
Cash flows from investing activities:
Proceeds from sale of business	500,000
Supplemental schedule of noncash investing and financing activities:
Proceeds from sale of business	500,000
Goodwill	(57,000)
Property, Plant, and Equipment, net	(29,000)
Inventory	(30,000)
Other Assets and Liabilities	(32,000)
Total gain on sale of business	352,000
Net income	1,277,000	1,554,000
Share-based compensation expense	375,000	322,000
Change in fair value of derivative instrument		(3,000)
(Gain) Loss on disposition of long-term assets	63,000	(16,000)
Gain on sale of business	(352,000)
Depreciation and amortization	1,387,000	1,220,000
Deferred income taxes	(234,000)	(106,000)
Excess tax benefit from employee stock plans	(2,000)	(2,000)
Trade accounts receivable, net	(1,603,000)	511,000
Other receivables	37,000	7,000
Inventories	131,000	(650,000)
Prepaid income taxes	(145,000)	432,000
Prepaid expenses, other	(29,000)	(180,000)
Accounts payable	176,000	(888,000)
Accrued compensation and related expenses	(554,000)	(962,000)
Other accrued expenses	39,000	293,000
Accrued product warranties	8,000	20,000
Accrued income taxes	354,000	294,000
Deferred revenue	571,000	281,000
Net cash provided by operating activities	1,499,000	2,127,000
Proceeds from sale of business	500,000
Purchases of property, plant and equipment	(326,000)	(861,000)
Proceeds from sale of property and equipment	50,000	54,000
Cash paid for patents and other intangible assets	(64,000)	(124,000)
Other		(2,000)
Net cash provided by (used in) investing activities	160,000	(933,000)
Proceeds from the revolving lines of credit	1,100,000	11,730,000
Payments on the revolving lines of credit	(1,543,000)	(11,125,000)
Payments on notes payable and seller financed note payable	(33,000)	(538,000)
Proceeds from the exercise of stock options	41,000	149,000
Excess tax benefit from employee stock plans	2,000	2,000
Dividends paid	(1,275,000)	(1,264,000)
Net cash used in financing activities	(1,708,000)	(1,046,000)
Effect of exchange rate changes on cash and cash equivalents	(494,000)	461,000
Net increase (decrease) in cash and cash equivalents	445,000	(313,000)
Beginning of period	6,344,000	6,332,000
End of period	6,789,000	6,019,000
Cash paid during the period for income taxes	304,000	229,000
Cash paid during the period for interest	41,000	67,000
Dividends accrued	638,000	633,000
Purchases of prepaid expenses, fixed assets and intangibles in accounts payable	(94,000)	(123,000)
Transfers of inventory to fixed assets	94,000	28,000
Proceeds from sale of business	500,000
Goodwill	(57,000)
Inventory	(131,000)	650,000
Total gain on sale of business	$ 352,000

Note 1 - Condensed Consolidated

Note 1 - Condensed Consolidated Financial Statements	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]	Note 1 – Condensed Consolidated Financial Statements The condensed consolidated balance sheet as of June 30, 2016, the condensed consolidated statements of income and comprehensive income (loss), for the three and six-months ended June 30, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America. These interim unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly present the financial position, results of operations and cash flows at June 30, 2016, and for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. Certain amounts have been reclassified from the prior year presentation to conform to the current year presentation. The results of operations for the three and six-month period ended June 30, 2016 are not necessarily indicative of operating results for the full year. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, previously filed with the Securities and Exchange Commission. MOCON Inc. and its subsidiaries, develops, manufacturers and markets measurement, analytical, monitoring and consulting services for customers in the barrier packaging, food, pharmaceutical, consumer products, industrial hygiene, environmental, air quality monitoring, oil and gas exploration and other industries throughout the world. We report our operating segments as Package Testing Products and Services (“Package Testing”), Permeation Products and Services (“Permeation”), and Industrial Analyzers Products and Services and Other (“Industrial Analyzers and Other”) for financial reporting purposes. Principles of Consolidation The consolidated financial statements include our accounts and our wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

Note 2 - Sale of Business

Note 2 - Sale of Business	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]	Note 2 – Sale of Business On January 14, 2016, we entered into an Asset Purchase Agreement, as amended on May 18, 2016 (the “Agreement”) with Volatile Analysis Corporation (“VAC”) pursuant to which we agreed to sell to VAC the assets exclusively used in its business of providing equipment and analytical chemistry services and related formulation, product development, and consulting services, primarily focused on identification of odors and aromas. This business was included in our Permeation segment and conducted from our Round Rock, Texas facility. The purchase and sale of the assets was finalized and closed on May 18, 2016. We received proceeds of $500,000 resulting in a realized gain of $352,000, which is included in other income (expense), net on the consolidated income statement. The remaining $800,000 owed by VAC in accordance with the Agreement will be recognized on the cost recovery method upon receipt. This business does not qualify for discontinued operations or available for sale treatment since it does not represent a strategic shift that had or will have a major effect on our operations and financial results.

Note 3 - Inventories

Note 3 - Inventories	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	Note 3 – Inventories Inventories consist of the following (expressed in thousands): June 30, 2016 December 31, 2015 Finished products $ 1,891 $ 1,366 Work-in-process 1,915 2,375 Raw materials 3,849 4,049 Total Inventory $ 7,655 $ 7,790

Note 4 - Net Income Per Common

Note 4 - Net Income Per Common Share	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Earnings Per Share [Text Block]	Note 4 – Net Income Per Common Share Basic net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is computed using the treasury stock method to compute the weighted average common stock outstanding assuming the conversion of potential dilutive common shares. The following table presents a reconciliation of the denominators used in the computation of net income per common share – basic, and net income per common share – diluted, for the three and six-months ended June 30, 2016 and 2015 (expressed in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Weighted shares of common stock 5,794 5,750 5,793 5,746 Dilutive impact of share-based awards 23 96 20 94 Weighted shares of common stock 5,817 5,846 5,813 5,840 Outstanding stock options totaling 634,635 and 201,950 for the three-months ended June 30, 2016 and June 30, 2015, respectively, and 659,635 and 246,250 for the six-months ended June 30, 2016 and June 30, 2015, respectively, were excluded from the net income per common share calculation because the shares would be anti-dilutive.

Note 5 - Goodwill and Intangibl

Note 5 - Goodwill and Intangible Assets	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Goodwill and Intangible Assets Disclosure [Text Block]	Note 5 – Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the six-month period ended June 30, 2016 were as follows (expressed in thousands): Package Testing Permeation Industrial Analyzers & Other Total Balance as of December 31, 2015 $ 4,967 $ 1,860 $ 610 $ 7,437 Foreign currency translation 101 27 - 128 Sale of business - (57 ) - (57 ) Balance as of June 30, 2016 $ 5,068 $ 1,830 $ 610 $ 7,508 We test goodwill for impairment annually at the reporting unit level using a fair value approach. We will perform our annual impairment test for goodwill in the fourth quarter or earlier if impairment indicators are identified. Other intangible assets (all of which are being amortized except projects in process) are as follows (expressed in thousands): As of June 30, 2016 Cost Accumulated Amortization Net Patents $ 1,939 $ (473 ) $ 1,466 Trademarks and trade names 3,385 (843 ) 2,542 Developed technology 6,256 (2,954 ) 3,302 Customer relationships 732 (346 ) 386 Internally developed software 1,085 (209 ) 876 Other intangibles 214 (150 ) 64 $ 13,611 $ (4,975 ) $ 8,636 As of December 31, 2015 Cost Accumulated Amortization Net Patents $ 1,844 $ (439 ) $ 1,405 Trademarks and trade names 3,321 (751 ) 2,570 Developed technology 6,121 (2,551 ) 3,570 Customer relationships 716 (298 ) 418 Internally developed software 1,085 (154 ) 931 Other intangibles 214 (122 ) 92 $ 13,301 $ (4,315 ) $ 8,986 Total amortization expense for the three-months ended June 30, 2016 and June 30, 2015 was $295,000 and $295,000, respectively, and $588,000 and $590,000, respectively, for the six-months ended June 30, 2016 and June 30, 2015. Projects in process are not amortized until the patent or trademark is granted by the regulatory agency or the asset is ready for use. Estimated amortization expense for the remainder of 2016 and each of the four succeeding fiscal years and thereafter based on the intangible assets as of June 30, 2016 is as follows (expressed in thousands): 2016 $ 587 2017 1,148 2018 1,116 2019 1,111 2020 1,110 2021 & Thereafter 2,922 $ 7,994

Note 6 - Accumulated Other Comp

Note 6 - Accumulated Other Comprehensive Income (Loss)	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Comprehensive Income (Loss) Note [Text Block]	Note 6 – Accumulated Other Comprehensive Income (Loss) Adjustments to accumulated other comprehensive income (loss) consist of the following (expressed in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ (4,323 ) $ (5,505 ) $ (5,220 ) $ (2,792 ) Foreign currency translation adjustments (330 ) 520 567 (2,193 ) Accumulated other comprehensive loss $ (4,653 ) $ (4,985 ) $ (4,653 ) $ (4,985 )

Note 7 - Warranty

Note 7 - Warranty	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Product Warranty Disclosure [Text Block]	Note 7 – Warranty We provide a warranty for most of our products. Warranties are generally for periods ranging from ninety days to one year, and cover parts and labor for non-maintenance repairs. Operator abuse, improper use, alteration, damage resulting from accident, or failure to follow manufacturer’s directions are excluded from warranty coverage. Warranty expense is accrued at the time of sale based on historical claims experience. Generally, warranty reserves are also accrued for special rework campaigns for known major product modifications. We also offer extended warranty service contracts for select products when the factory warranty period expires. Warranty provisions and claims for the three and six-months ended June 30, 2016 and June 30, 2015 were as follows (expressed in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ 242 $ 354 $ 223 $ 285 Warranty provisions 61 16 205 217 Warranty claims (71 ) (77 ) (196 ) (209 ) Ending Balance $ 232 $ 293 $ 232 $ 293

Note 8 - Debt

Note 8 - Debt	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Debt Disclosure [Text Block]	Note 8 – Debt Notes payable consists of the following (expressed in thousands): June 30, 2016 December 31, 2015 Capital Leases $ 125 $ 158 Less current portion of long-term notes payable 60 65 Total long-term notes payable $ 65 $ 93 In the U.S., we have a $10.0 million secured revolving line of credit with a maturity date of August 26, 2018. Interest is charged monthly at one-month LIBOR (0.47 percent) plus 1.5 percent which totaled 1.97 percent at June 30, 2016 and 1.74 percent at December 31, 2015. The line of credit is secured by our assets with the exception of the number of shares of outstanding stock of Dansensor that exceeds 65 percent of the shares outstanding. We had $2.4 million and $2.8 million outstanding on the line of credit at June 30, 2016 and December 31, 2015. Additionally, Dansensor has a DKK 10 million (approximately $1.5 million) available line of credit of which no amounts were outstanding as of June 30, 2016 and December 31, 2015 . Outstanding borrowings on the Denmark line of credit are charged interest at 4.35 percent per year. We are subject to various financial and restrictive covenants in the bank Credit Agreement, including maintaining certain financial ratios and limits on incurring additional indebtedness, acquisitions, making capital and lease expenditures and making share repurchases. We are in compliance with our debt covenants at June 30, 2016 and expect to remain in compliance through the next twelve months . As of June 30, 2016, the future minimum principal payments of the notes payable for the remainder of 2016 and each of the three succeeding fiscal years to the maturity of the note are as follows (expressed in thousands): Minimum principal Payments 2016 $ 33 2017 56 2018 36 Total $ 125

Note 9 - Realignment Expenses

Note 9 - Realignment Expenses	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Restructuring and Related Activities Disclosure [Text Block]	Note 9 – Realignment Expenses During 2015, we implemented a Realignment Plan in order to simplify our business structure by reducing the number of legal entities and by combining the sales and marketing teams of our Package Testing and Permeation segments under common leadership. As of December 31, 2015, approximately $483,000 was included in Accrued Compensation and related expenses and approximately $137,000 was included in Accounts payable on the consolidated balance sheet. During the three months ended June 30, 2016, management concluded to eliminate the chief operating officer position and a divisional executive position. These two positions have severance agreements for the payment upon the occurrence of certain termination events. As a result, $750,000 of realignment expense was recognized during the three and six-months ended June 30, 2016. Amounts accrued, realignment expense and cash payments for the three and six-months ended June 30, 2016 and June 30, 2015 were as follows (expressed in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning Balance $ 112 $ - $ 620 $ - Realignment Expense 750 128 750 128 Cash Payments (56 ) - (564 ) - Ending Balance $ 806 $ 128 $ 806 $ 128 As of June 30, 2016, approximately $806,000 is included in Accrued compensation and related expenses on the consolidated balance sheet and is expected to be paid by the end of 2017.

Note 10 - Income Taxes

Note 10 - Income Taxes	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	Note 10 – Income Taxes Our provision for income tax expense was 32 percent of income before income taxes for each of the three-months ended June 30, 2016 and June 30, 2015. Our provision for income tax expense was 32 percent and 34 percent of income before income taxes for the first half ended June 30, 2016 and June 30, 2015, respectively. The rate in the second quarters and first halves 2016 and 2015 were lower than the statutory rate due primarily to the effect of foreign operations where tax rates tend to be lower, the domestic manufacturing deduction and the research credit. The decrease in the effective tax rate for the first six months of 2016 as compared to 2015 is primarily due to permanent enactment of the research and development credit whereby previously the related tax credit was not in the effective tax rate until enacted later in the year. As of June 30, 2016 and December 31, 2015, the liability for gross unrecognized tax benefits was $187,000. With the exception of lapsing statutes of limitation it is expected that the amount of unrecognized tax benefits for positions which we have identified will not materially change in the next twelve months.

Note 11 - Share-based Compensat

Note 11 - Share-based Compensation	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	Note 11 – Share-Based Compensation Stock Option Plans As of June 30, 2016, we have reserved 345,800 shares of common stock for options and other share-based incentive awards that are still available for grant under our 2015 stock incentive plan, and 773,260 shares for options that have been granted under either the 2006 or 2015 stock incentive plan. We issue new shares of common stock upon exercise of stock options. Amounts recognized in the condensed consolidated financial statements related to share-based compensation are as follows (expressed in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Total cost of share-based compensation $ 186 $ 161 $ 375 $ 322 Amount of income tax benefit recognized in earnings (5 ) (21 ) (5 ) (42 ) Amount charged against net income $ 181 $ 140 $ 370 $ 280 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model (Black-Scholes). We use historical data to estimate the expected price volatility, expected option life and expected forfeiture rate. Our estimates are based on expected volatility for awards granted on daily historical trading data of our common stock for a period equivalent to the expected term of the award. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. We estimate the expected term consistent with historical exercise and cancellation activity of its previous share-based grants with a seven or ten year as applicable contractual term. Forfeitures are based on historical experience. The dividend yield is calculated based upon the dividend payments made during the prior four quarters as a percent of the average stock price for that period. A summary of the option activity for the first six months of 2016 is as follows (expressed in thousands, except share and per share amounts): Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Options outstanding, December 31, 2015 797,378 $ 14.91 4.7 $ 453 Granted - - - - Exercised (4,900 ) 10.43 - - Cancelled or expired (19,218 ) 15.71 - - Options outstanding, June 30, 2016 773,260 $ 14.92 4.2 $ 292 Options exercisable, June 30, 2016 492,985 $ 14.94 3.1 $ 278 The total intrinsic value of options exercised was $11,000 and $42,000 during the three-months ended June 30, 2016 and June 30, 2015, respectively, and $17,000 and $183,000 during the six-months ended June 30, 2016 and June 30, 2015, respectively. As of June 30, 2016, there was $583,000 of total unrecognized compensation cost related to unvested share-based compensation granted under our plans. That cost is expected to be recognized over a weighted-average period of 0.8 years. The total fair value of option shares vested during the three-months ended June 30, 2016 and June 30, 2015 was zero and $88,000, respectively and zero and $176,000 during the six-months ended June 30, 2016 and June 30, 2015, respectively. Employee Stock Purchase Plan On May 27, 2015, our shareholders approved the 2015 Employee Stock Purchase Plan (“Purchase Plan”) whereby 50,000 shares of common stock will be available for future sale. The first offering period began on January 1, 2016 and provides participants an option to purchase shares of our common stock at a price per share equal to 85 percent of the value of the share of common stock at the beginning or end of the offering period (whichever is less). For the offering period ended June 30, 2016, 1,803 shares were purchased under the plan.

Note 12 - Business Segments

Note 12 - Business Segments	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	Note 12 – Business Segments We have four operating segments, structured by differences in products and services, that are regularly reviewed by our chief operating decision maker to make decisions about allocating resources and assessing segment performance. The segment performance is evaluated at segment operating income which is defined as gross profit less selling, general and administrative expenses and research and development expenses. General corporate expenses, including costs associated with various support functions such as human resources, information technology, finance and accounting, and general and administrative costs, are allocated to the reportable segments primarily on the basis of segment gross margin. Our four operating segments have been aggregated into three reportable segments. We aggregated our Other Products and Services operating segment into the Industrial Analyzers Products and Services segment based on minimal business activity and materiality. The Package Testing segment provides customers with the ability to assess package performance, shelf-life, package improvement, cost reduction, sustainability and product safety using Modified Atmosphere Packaging and other technologies. The Permeation segment includes instruments and services that measure the rate at which various gases and vapors permeate through a variety of materials. The Industrial Analyzers and Other segment includes advanced gas analysis and monitoring instrumentation used in applications such as oil and gas exploration, beverage and specialty gas analysis, industrial hygiene and safety, food safety, environmental air monitoring and homeland security. The accounting policies of the reportable segments are the same as those described in Note 1 to the Consolidated Financial Statements found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Intersegment revenue for the three and six-months ended June 30, 2016 and June 30, 2015 were insignificant. Financial information by reportable segment for the three and six-months ended June 30, 2016 and June 30, 2015 is as follows (expressed in thousands): Package Testing Permeation Industrial Analyzers and Other Unallocated - Corporate Consolidated Three Months Ended June 30, 2016 Revenue $ 7,328 $ 5,483 $ 2,820 $ - $ 15,631 Gross profit 4,113 3,296 1,362 - 8,771 Operating income (loss) 696 1,023 (116 ) (750 ) 853 Three Months Ended June 30, 2015 Revenue $ 6,473 $ 5,966 $ 2,610 $ - $ 15,049 Gross profit 3,472 3,416 1,138 - 8,026 Operating income (loss) 556 1,143 (507 ) (128 ) 1,064 Six Months Ended June 30, 2016 Revenue $ 14,331 $ 10,766 $ 5,264 $ - $ 30,361 Gross profit 8,144 6,291 2,440 - 16,875 Operating income (loss) 1,543 1,328 (505 ) (750 ) 1,616 Six Months Ended June 30, 2015 Revenue $ 13,229 $ 12,068 $ 5,112 $ - $ 30,409 Gross profit 7,149 6,989 2,366 - 16,504 Operating income (loss) 1,444 1,821 (934 ) (128 ) 2,203

Significant Accounting Policies

Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Consolidation, Policy [Policy Text Block]	Principles of Consolidation The consolidated financial statements include our accounts and our wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

Note 3 - Inventories (Tables)

Note 3 - Inventories (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	June 30, 2016 December 31, 2015 Finished products $ 1,891 $ 1,366 Work-in-process 1,915 2,375 Raw materials 3,849 4,049 Total Inventory $ 7,655 $ 7,790

Note 4 - Net Income Per Commo21

Note 4 - Net Income Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Weighted Average Number of Shares [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Weighted shares of common stock 5,794 5,750 5,793 5,746 Dilutive impact of share-based awards 23 96 20 94 Weighted shares of common stock 5,817 5,846 5,813 5,840

Note 5 - Goodwill and Intangi22

Note 5 - Goodwill and Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Goodwill [Table Text Block]	Package Testing Permeation Industrial Analyzers & Other Total Balance as of December 31, 2015 $ 4,967 $ 1,860 $ 610 $ 7,437 Foreign currency translation 101 27 - 128 Sale of business - (57 ) - (57 ) Balance as of June 30, 2016 $ 5,068 $ 1,830 $ 610 $ 7,508
Schedule of Finite-Lived Intangible Assets [Table Text Block]	As of June 30, 2016 Cost Accumulated Amortization Net Patents $ 1,939 $ (473 ) $ 1,466 Trademarks and trade names 3,385 (843 ) 2,542 Developed technology 6,256 (2,954 ) 3,302 Customer relationships 732 (346 ) 386 Internally developed software 1,085 (209 ) 876 Other intangibles 214 (150 ) 64 $ 13,611 $ (4,975 ) $ 8,636 As of December 31, 2015 Cost Accumulated Amortization Net Patents $ 1,844 $ (439 ) $ 1,405 Trademarks and trade names 3,321 (751 ) 2,570 Developed technology 6,121 (2,551 ) 3,570 Customer relationships 716 (298 ) 418 Internally developed software 1,085 (154 ) 931 Other intangibles 214 (122 ) 92 $ 13,301 $ (4,315 ) $ 8,986
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]	2016 $ 587 2017 1,148 2018 1,116 2019 1,111 2020 1,110 2021 & Thereafter 2,922 $ 7,994

Note 6 - Accumulated Other Co23

Note 6 - Accumulated Other Comprehensive Income (Loss) (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ (4,323 ) $ (5,505 ) $ (5,220 ) $ (2,792 ) Foreign currency translation adjustments (330 ) 520 567 (2,193 ) Accumulated other comprehensive loss $ (4,653 ) $ (4,985 ) $ (4,653 ) $ (4,985 )

Note 7 - Warranty (Tables)

Note 7 - Warranty (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Product Warranty Liability [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ 242 $ 354 $ 223 $ 285 Warranty provisions 61 16 205 217 Warranty claims (71 ) (77 ) (196 ) (209 ) Ending Balance $ 232 $ 293 $ 232 $ 293

Note 8 - Debt (Tables)

Note 8 - Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Long-term Debt Instruments [Table Text Block]	June 30, 2016 December 31, 2015 Capital Leases $ 125 $ 158 Less current portion of long-term notes payable 60 65 Total long-term notes payable $ 65 $ 93
Schedule of Maturities of Long-term Debt and Future Minimum Payments Under Capital Leases [Table Text Block]	Minimum principal Payments 2016 $ 33 2017 56 2018 36 Total $ 125

Note 9 - Realignment Expenses (

Note 9 - Realignment Expenses (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Restructuring and Related Costs [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning Balance $ 112 $ - $ 620 $ - Realignment Expense 750 128 750 128 Cash Payments (56 ) - (564 ) - Ending Balance $ 806 $ 128 $ 806 $ 128

Note 11 - Share-based Compens27

Note 11 - Share-based Compensation (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Total cost of share-based compensation $ 186 $ 161 $ 375 $ 322 Amount of income tax benefit recognized in earnings (5 ) (21 ) (5 ) (42 ) Amount charged against net income $ 181 $ 140 $ 370 $ 280
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Options outstanding, December 31, 2015 797,378 $ 14.91 4.7 $ 453 Granted - - - - Exercised (4,900 ) 10.43 - - Cancelled or expired (19,218 ) 15.71 - - Options outstanding, June 30, 2016 773,260 $ 14.92 4.2 $ 292 Options exercisable, June 30, 2016 492,985 $ 14.94 3.1 $ 278

Note 12 - Business Segments (Ta

Note 12 - Business Segments (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Package Testing Permeation Industrial Analyzers and Other Unallocated - Corporate Consolidated Three Months Ended June 30, 2016 Revenue $ 7,328 $ 5,483 $ 2,820 $ - $ 15,631 Gross profit 4,113 3,296 1,362 - 8,771 Operating income (loss) 696 1,023 (116 ) (750 ) 853 Three Months Ended June 30, 2015 Revenue $ 6,473 $ 5,966 $ 2,610 $ - $ 15,049 Gross profit 3,472 3,416 1,138 - 8,026 Operating income (loss) 556 1,143 (507 ) (128 ) 1,064 Six Months Ended June 30, 2016 Revenue $ 14,331 $ 10,766 $ 5,264 $ - $ 30,361 Gross profit 8,144 6,291 2,440 - 16,875 Operating income (loss) 1,543 1,328 (505 ) (750 ) 1,616 Six Months Ended June 30, 2015 Revenue $ 13,229 $ 12,068 $ 5,112 $ - $ 30,409 Gross profit 7,149 6,989 2,366 - 16,504 Operating income (loss) 1,444 1,821 (934 ) (128 ) 2,203

Note 2 - Sale of Business (Deta

Note 2 - Sale of Business (Details Textual) - USD ($)	May 18, 2016	Jun. 30, 2016	Jun. 30, 2015
Volatile Analysis Corporation [Member] | Other Nonoperating Income (Expense) [Member]
Gain (Loss) on Disposition of Business	$ 352,000
Volatile Analysis Corporation [Member]
Proceeds from Divestiture of Businesses	500,000	$ 500,000
Gain (Loss) on Disposition of Business		352,000
Sale of Business, Consideration Receivable	$ 800,000
Proceeds from Divestiture of Businesses		500,000
Gain (Loss) on Disposition of Business		$ 352,000

Note 3 - Major Components of In

Note 3 - Major Components of Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Finished products	$ 1,891	$ 1,366
Work-in-process	1,915	2,375
Raw materials	3,849	4,049
Total Inventory	$ 7,655	$ 7,790

Note 4 - Net Income Per Commo31

Note 4 - Net Income Per Common Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	634,635	201,950	659,635	246,250

Note 4 - Reconciliation of the

Note 4 - Reconciliation of the Denominators Used in the Computation of Net Income Per Common Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Weighted shares of common stock outstanding - basic (in shares)	5,794	5,750	5,793	5,746
Dilutive impact of share-based awards (in shares)	23	96	20	94
Weighted shares of common stock outstanding - diluted (in shares)	5,817	5,846	5,813	5,840

Note 5 - Goodwill and Intangi33

Note 5 - Goodwill and Intangible Assets (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Amortization of Intangible Assets	$ 295,000	$ 295,000	$ 588,000	$ 590,000

Note 5 - Changes in the Carryin

Note 5 - Changes in the Carrying Amount of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Package Testing Segment [Member]
Balance	$ 4,967
Foreign currency translation	101
Sale of business
Balance	5,068
Permeation Segment [Member]
Balance	1,860
Foreign currency translation	27
Sale of business	(57)
Balance	1,830
Industrial Analyzers and Other Segment [Member]
Balance	610
Foreign currency translation
Sale of business
Balance	610
Balance	7,437
Foreign currency translation	128
Sale of business	(57)
Balance	$ 7,508

Note 5 - Other Intangible Asset

Note 5 - Other Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Patents [Member]
Cost	$ 1,939	$ 1,844
Accumulated amortization	(473)	(439)
Net	1,466	1,405
Trademarks and Trade Names [Member]
Cost	3,385	3,321
Accumulated amortization	(843)	(751)
Net	2,542	2,570
Developed Technology Rights [Member]
Cost	6,256	6,121
Accumulated amortization	(2,954)	(2,551)
Net	3,302	3,570
Customer Relationships [Member]
Cost	732	716
Accumulated amortization	(346)	(298)
Net	386	418
Internally Developed Software [Member]
Cost	1,085	1,085
Accumulated amortization	(209)	(154)
Net	876	931
Other Intangible Assets [Member]
Cost	214	214
Accumulated amortization	(150)	(122)
Net	64	92
Cost	13,611	13,301
Accumulated amortization	(4,975)	(4,315)
Net	$ 8,636	$ 8,986

Note 5 - Estimated Amortization

Note 5 - Estimated Amortization Expense (Details) $ in Thousands	Jun. 30, 2016USD ($)
2,016	$ 587
2,017	1,148
2,018	1,116
2,019	1,111
2,020	1,110
2021 & Thereafter	2,922
	$ 7,994

Note 6 - Adjustments to Accumul

Note 6 - Adjustments to Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Beginning balance	$ (4,323)	$ (5,505)	$ (5,220)	$ (2,792)
Foreign currency translation adjustments	(330)	520	567	(2,193)
Accumulated other comprehensive loss	$ (4,653)	$ (4,985)	$ (4,653)	$ (4,985)

Note 7 - Warranty (Details Text

Note 7 - Warranty (Details Textual)	6 Months Ended
	Jun. 30, 2016
Product Warranty Period Low End of Range	90 days
Product Warranty Period High End of Range	1 year

Note 7 - Warranty Provisions an

Note 7 - Warranty Provisions and Claims (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Beginning balance	$ 242	$ 354	$ 223	$ 285
Warranty provisions	61	16	205	217
Warranty claims	(71)	(77)	(196)	(209)
Ending Balance	$ 232	$ 293	$ 232	$ 293

Note 8 - Debt (Details Textual)

Note 8 - Debt (Details Textual) DKK in Millions	6 Months Ended
	Jun. 30, 2016USD ($)	Jun. 30, 2016DKK	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Dansensor [Member]
Long-term Line of Credit	$ 0			$ 0
Line of Credit Facility, Maximum Borrowing Capacity		DKK 10	$ 1,500,000
Debt Instrument, Interest Rate, Stated Percentage	4.35%	4.35%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Revolving Credit Facility [Member]
Long-term Line of Credit	$ 2,400,000			$ 2,800,000
Line of Credit Facility, Maximum Borrowing Capacity	$ 10,000,000
London Interbank Offered Rate LIBOR	0.47%
Line of Credit Facility, Interest Rate at Period End	1.97%	1.97%		1.74%
Debt Instrument Percentage of Common Stock Secured	65.00%

Note 8 - Long-term Notes Payabl

Note 8 - Long-term Notes Payable (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Capital Leases	$ 125	$ 158
Less current portion of long-term notes payable	60	65
Total long-term notes payable	$ 65	$ 93

Note 8 - Future Minimum Princip

Note 8 - Future Minimum Principal Payments of Long-term Notes Payable (Details) - Notes Payable [Member] $ in Thousands	Jun. 30, 2016USD ($)
2,016	$ 33
2,017	56
2,018	36
Total	$ 125

Note 9 - Realignment Expenses43

Note 9 - Realignment Expenses (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Realignment Plan [Member] | Accrued Compensation and Related Expenses [Member]
Restructuring Reserve, Current	$ 806,000		$ 806,000		$ 483,000
Realignment Plan [Member] | Accounts Payable [Member]
Restructuring Reserve, Current					$ 137,000
Realignment Plan [Member]
Restructuring Charges	750,000		750,000
Restructuring Charges	$ 750,000	$ 128,000	$ 750,000	$ 128,000

Note 9 - Realignment Expense an

Note 9 - Realignment Expense and Cash Payments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Beginning Balance	$ 112		$ 620
Restructuring Charges	750	128	750	128
Cash Payments	(56)		(564)
Ending Balance	$ 806	$ 128	$ 806	$ 128

Note 10 - Income Taxes (Details

Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Effective Income Tax Rate Reconciliation, Percent	32.00%	32.00%	32.00%	34.00%
Unrecognized Tax Benefits	$ 187,000		$ 187,000		$ 187,000

Note 11 - Share-based Compens46

Note 11 - Share-based Compensation (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	May 27, 2015
Stock Incentive Plan 2006 and 2015 [Member]
Common Stock, Capital Shares Reserved for Future Issuance	345,800		345,800
Stock Incentive Plan 2006 or Stock Incentive Plan 2015 [Member]
Common Stock, Capital Shares Reserved for Future Issuance	773,260		773,260
2015 Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant					50,000
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent			85.00%
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award			1,803
Employee Stock Option [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award Fair Value Assumptions Contractual Term			7 years
Employee Stock Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award Fair Value Assumptions Contractual Term			10 years
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 11,000	$ 42,000	$ 17,000	$ 183,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	583,000		$ 583,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			292 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value	$ 0	$ 88,000	$ 0	$ 176,000

Note 11 - Share-based Compens47

Note 11 - Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Total cost of share-based compensation	$ 186	$ 161	$ 375	$ 322
Amount of income tax benefit recognized in earnings	(5)	(21)	(5)	(42)
Amount charged against net income	$ 181	$ 140	$ 370	$ 280

Note 11 - Summary of Stock Opti

Note 11 - Summary of Stock Option Activity (Details) - Employee Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Options outstanding (in shares)	797,378
Options outstanding, Weighted Average Exercise Price (in dollars per share)	$ 14.91
Options outstanding, Weighted Average Remaining Contractual Term	4 years 73 days	4 years 255 days
Options outstanding, Aggregate Intrinsic Value	$ 453
Granted, Weighted Average Exercise Price (in dollars per share)
Options exercised (in shares)	(4,900)
Exercised, Weighted Average Exercise Price (in dollars per share)	$ 10.43
Options cancelled or expired (in shares)	(19,218)
Cancelled or expired, Weighted Average Exercise Price (in dollars per share)	$ 15.71
Options outstanding (in shares)	773,260	797,378
Options outstanding, Weighted Average Exercise Price (in dollars per share)	$ 14.92	$ 14.91
Options outstanding, Aggregate Intrinsic Value	$ 292	$ 453
Options exercisable (in shares)	492,985
Options exercisable, Weighted Average Exercise Price (in dollars per share)	$ 14.94
Options exercisable, Weighted Average Remaining Contractual Term	3 years 36 days
Options exercisable, Aggregate Intrinsic Value	$ 278

Note 12 - Business Segments (De

Note 12 - Business Segments (Details Textual)	6 Months Ended
	Jun. 30, 2016
Number of Operating Segments	4
Number of Reportable Segments	3

Note 12 - Financial Information

Note 12 - Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Package Testing Segment [Member]
Revenue	$ 7,328	$ 6,473	$ 14,331	$ 13,229
Gross profit	4,113	3,472	8,144	7,149
Operating income (loss)	696	556	1,543	1,444
Permeation Segment [Member]
Revenue	5,483	5,966	10,766	12,068
Gross profit	3,296	3,416	6,291	6,989
Operating income (loss)	1,023	1,143	1,328	1,821
Industrial Analyzers and Other Segment [Member]
Revenue	2,820	2,610	5,264	5,112
Gross profit	1,362	1,138	2,440	2,366
Operating income (loss)	(116)	(507)	(505)	(934)
Corporate and Unallocated Segment [Member]
Revenue
Gross profit
Operating income (loss)	(750)	(128)	(750)	(128)
Revenue	15,631	15,049	30,361	30,409
Gross profit	8,771	8,025	16,875	16,504
Operating income (loss)	$ 853	$ 1,064	$ 1,616	$ 2,203