MOCON Inc. (MOCO, Financial) filed Quarterly Report for the period ended 2009-06-30.
Mocon Inc. is a leading provider of systems and services designed to assess materials and processes. The company develops manufactures and markets high technology instrumentation and performs consulting and analytical services. Mocon markets to research laboratories manufacturers and Quality Control departments in the life sciences pharmaceutical drug discovery food and beverage polymer and adhesive and the electronic and semiconductor industries among others. (PRESS RELEASE) MOCON Inc. has a market cap of $47.2 million; its shares were traded at around $8.44 with a P/E ratio of 15.6 and P/S ratio of 1.6. The dividend yield of MOCON Inc. stocks is 4.3%. MOCON Inc. had an annual average earning growth of 14.7% over the past 5 years.
Research and Development Expenses Research and development (R&D) expenses were $462,000, or 7.2% of sales in the second quarter 2009, compared to $483,000, or 6.5% of sales, in the same period of 2008. R&D expenses were $970,000, or 7.7% of sales in the first six months of 2009, compared to $1,027,000, or 6.9% of sales, in the same period of 2008. Our intent is to spend between 6% and 8% of consolidated sales on R&D on an on-going basis.
Based on current projected annual operating results and current income tax rates, we expect the effective tax rate for the remainder of 2009 to be in the range of 33% to 36%. This rate fluctuates over time based on the income tax rates in the various jurisdictions in which we operate, and also the level of profits in those jurisdictions. Net Income Net income was $516,000 in the second quarter 2009, compared to $1,051,000 in the first quarter 2008. Diluted net income per share was $0.09 and $0.18 in the second quarters of 2009 and 2008, respectively. For the six months ended June 30, 2009, net income was $914,000, or $0.16 per diluted share, compared to net income of $1,937,000, or $0.34 per diluted share in the prior year.
We have historically financed our operations, capital expenditures and other liquidity needs through our cash flows generated from operations. During the second quarter 2009, we initiated a $1,000,000 revolving line of credit to supplement current working capital requirements. Total cash, cash equivalents and marketable securities decreased $2,173,000 during the first six months of 2009 to $13,936,000 as of June 30, 2009, compared to $16,109,000 at December 31, 2008. The primary reason for this decrease was due to the repurchase of 181,171 shares of our common stock for an aggregate of $1,590,000. Our working capital as of June 30, 2009 increased $655,000 to $18,548,000, as compared to $17,893,000 at December 31, 2008. We invest our excess cash in marketable securities consisting primarily of municipal bonds, certificates of deposits and U.S. treasury obligations. We believe that a combination of our existing cash, cash equivalents and marketable securities, revolving credit line and cash flow from operations will continue to be adequate to fund our operations, capital expenditures, dividend payments
Cash Flow from Investing Activities Cash provided by (used in) investing activities totaled $1,360,000 and ($1,467,000) in the first six months of 2009 and 2008, respectively. The primary reasons for cash provided by investing activities in 2009 were net proceeds from maturities of marketable securities of $1,617,000, offset somewhat by purchases of property and equipment. We presently do not believe that any significant property, plant and equipment expenditures are required to accommodate our current level of operations.
Cash used in financing activities totaled $2,189,000 and $478,000 in the first six months of 2009 and 2008, respectively. During the first six months of 2009 and 2008, we made dividend payments to our shareholders of $1,006,000 and $886,000, respectively. During the second quarter of 2009, we borrowed $1,000,000 under our revolving line of credit and repaid $600,000 before June 30, 2009. Also, during the second quarter 2009, we repurchased $1,590,000 of our outstanding common stock. Partially offsetting the impact of the dividend payments in 2008 were the proceeds from the exercise of stock options in the amount of $385,000.
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Mocon Inc. is a leading provider of systems and services designed to assess materials and processes. The company develops manufactures and markets high technology instrumentation and performs consulting and analytical services. Mocon markets to research laboratories manufacturers and Quality Control departments in the life sciences pharmaceutical drug discovery food and beverage polymer and adhesive and the electronic and semiconductor industries among others. (PRESS RELEASE) MOCON Inc. has a market cap of $47.2 million; its shares were traded at around $8.44 with a P/E ratio of 15.6 and P/S ratio of 1.6. The dividend yield of MOCON Inc. stocks is 4.3%. MOCON Inc. had an annual average earning growth of 14.7% over the past 5 years.
Highlight of Business Operations:
Comparison of Financial Results for the Three- and Six-Month Periods Ended June 30, 2009 and 2008 Sales Sales for the three-month period ended June 30, 2009 were $6,421,000, down 13% compared to $7,379,000 for the same period in 2008. The effects of the global economic recession contributed to a decrease in sales across most major product lines and market regions. On a geographical basis, sales decreased 20% and 7% in our domestic and foreign markets, respectively. Domestic and foreign sales accounted for 43% and 57%, respectively, of our consolidated second quarter sales in 2009, and 47% and 53% of our consolidated sales, respectively, for the same period in 2008.Research and Development Expenses Research and development (R&D) expenses were $462,000, or 7.2% of sales in the second quarter 2009, compared to $483,000, or 6.5% of sales, in the same period of 2008. R&D expenses were $970,000, or 7.7% of sales in the first six months of 2009, compared to $1,027,000, or 6.9% of sales, in the same period of 2008. Our intent is to spend between 6% and 8% of consolidated sales on R&D on an on-going basis.
Based on current projected annual operating results and current income tax rates, we expect the effective tax rate for the remainder of 2009 to be in the range of 33% to 36%. This rate fluctuates over time based on the income tax rates in the various jurisdictions in which we operate, and also the level of profits in those jurisdictions. Net Income Net income was $516,000 in the second quarter 2009, compared to $1,051,000 in the first quarter 2008. Diluted net income per share was $0.09 and $0.18 in the second quarters of 2009 and 2008, respectively. For the six months ended June 30, 2009, net income was $914,000, or $0.16 per diluted share, compared to net income of $1,937,000, or $0.34 per diluted share in the prior year.
We have historically financed our operations, capital expenditures and other liquidity needs through our cash flows generated from operations. During the second quarter 2009, we initiated a $1,000,000 revolving line of credit to supplement current working capital requirements. Total cash, cash equivalents and marketable securities decreased $2,173,000 during the first six months of 2009 to $13,936,000 as of June 30, 2009, compared to $16,109,000 at December 31, 2008. The primary reason for this decrease was due to the repurchase of 181,171 shares of our common stock for an aggregate of $1,590,000. Our working capital as of June 30, 2009 increased $655,000 to $18,548,000, as compared to $17,893,000 at December 31, 2008. We invest our excess cash in marketable securities consisting primarily of municipal bonds, certificates of deposits and U.S. treasury obligations. We believe that a combination of our existing cash, cash equivalents and marketable securities, revolving credit line and cash flow from operations will continue to be adequate to fund our operations, capital expenditures, dividend payments
Cash Flow from Investing Activities Cash provided by (used in) investing activities totaled $1,360,000 and ($1,467,000) in the first six months of 2009 and 2008, respectively. The primary reasons for cash provided by investing activities in 2009 were net proceeds from maturities of marketable securities of $1,617,000, offset somewhat by purchases of property and equipment. We presently do not believe that any significant property, plant and equipment expenditures are required to accommodate our current level of operations.
Cash used in financing activities totaled $2,189,000 and $478,000 in the first six months of 2009 and 2008, respectively. During the first six months of 2009 and 2008, we made dividend payments to our shareholders of $1,006,000 and $886,000, respectively. During the second quarter of 2009, we borrowed $1,000,000 under our revolving line of credit and repaid $600,000 before June 30, 2009. Also, during the second quarter 2009, we repurchased $1,590,000 of our outstanding common stock. Partially offsetting the impact of the dividend payments in 2008 were the proceeds from the exercise of stock options in the amount of $385,000.
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