MINNEAPOLIS – MOCON, Inc. reported its operating results for the fourth quarter and year ended December 31, 2011.

Net sales for the fourth quarter 2011 were $9,741,000, a new record for the Company, and an increase of 4 percent compared to $9,355,000 for the fourth quarter 2010. Net income for the fourth quarter 2011 was $1,393,000 compared to $1,476,000 in the fourth quarter 2010. Diluted earnings per share were $0.25 in the fourth quarter 2011 compared to $0.27 for the same period in 2010. Sales for the year ended December 31, 2011 were $37,361,000, a new annual record for the Company, and an increase of 18 percent compared to $31,549,000 for the year ended December 31, 2010. Operating income increased 39 percent to $8,124,000 for the year 2011 compared to $5,834,000 for the same period last year. Net income was $5,451,000 for the year 2011, a new record for the Company, and a 21 percent increase over $4,518,000 for 2010. Diluted earnings per share were $.98 and $.84, respectively, for the years ended December 31, 2011 and 2010.

Our sales growth in the fourth quarter 2011 compared to the fourth quarter 2010 came in the areas of permeation and gas analyzer instruments. Sales of our permeation testing products and services, which amounted to 62 percent of our consolidated sales in the fourth quarter 2011, increased 6 percent compared to the same period in 2010. This increase was due to a 27 percent increase in foreign shipments and reflected continued demand for our mainstay oxygen and water vapor transmission instruments. Sales of our gas analyzers, sensors and detectors product group, which accounted for 18 percent of our consolidated sales in the fourth quarter 2011, increased 17 percent compared to the fourth quarter in 2010. Sales of gas chromatographs and hydrocarbon analyzers to the oil exploration, environmental monitoring and carbonated beverage markets accounted for the majority of the increase. Sales of our package testing products and services, which accounted for 14 percent of our consolidated sales in the fourth quarter 2011, decreased 9 percent compared to the same period in the prior year, however, were up 18 percent for the year. Overall, on a consolidated basis, sales for the fourth quarter 2011 increased 13 percent in our foreign markets and declined 5 percent domestically, compared to the same period in 2010.

Our strong gross margin of 63 percent in the fourth quarter 2011 was the result of favorable sales mix, higher production volume and improved cost of sales on certain gas analyzer instruments. Our selling, general and administrative expenses were higher in the fourth quarter 2011 compared to the same quarter in the prior year primarily due to increased headcount and related benefits, professional and consulting fees, sales commissions, and marketing and travel expenses. Certain consulting fees incurred in the fourth quarter related to the implementation of our new ERP system. Our research and development expenses in the fourth quarter 2011 were consistent with the fourth quarter 2010.

“We are pleased to report another record sales quarter for the Company. Despite the economic uncertainty in some of our foreign markets, we are encouraged by the increase in international shipments we realized in our fourth quarter. We are proud that we were able to set new records for the full year 2011 in both the top and bottom lines. We believe this is a testimonial to the quality and reputation of our products and services,” commented Robert L. Demorest, MOCON President and CEO.

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.