MOCON, Inc. (NasdaqGM:MOCO) today reported its operating results for the third quarter ended September 30, 2011.

Net sales for the third quarter 2011 were $9,463,000, a new record for the Company, and an increase of 22 percent compared to $7,749,000 for the third quarter 2010. Operating income increased 45 percent to $2,249,000 for the third quarter 2011 compared to $1,553,000 for the same period last year. Net income for the third quarter 2011 was $1,517,000, also a new record, and a 47 percent increase compared to $1,029,000 in the third quarter 2010. Diluted earnings per share were $0.27 in the third quarter 2011 compared to $0.19 for the same period in 2010. Nine-month sales were $27,619,000, an increase of 24 percent compared to $22,194,000 for the first nine months of 2010. Operating income increased 56 percent to $6,046,000 for the first nine months of 2011 compared to $3,869,000 for the same period last year. Net income and diluted earnings per share were $4,058,000 and $0.73, respectively, for the first nine months of 2011, increases of 33 percent and 28 percent, respectively, compared to $3,043,000 and $0.57 for the same period in 2010.

We experienced double-digit sales growth in each of our three major product groups in the third quarter 2011 compared to third quarter 2010. Sales of our permeation instruments and services, which amounted to 56 percent of our consolidated sales in the third quarter 2011, increased 24 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 18 percent of our consolidated sales in the third quarter 2011, increased 22 percent compared to the third 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 instruments and services, which accounted for 19 percent of our consolidated sales in the third quarter 2011, increased 44 percent compared to the same period in the prior year. A significant contributor to this increase was the shipment of 25 newly designed test systems for package integrity. Overall, on a consolidated basis, sales increased 33 percent domestically and 14 percent in our foreign markets.

Our strong gross margin of 63 percent in the third 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 third quarter 2011 compared to the same quarter in the prior year primarily due to increased headcount and related benefits, professional fees, sales commissions, and marketing and travel expense. Our research and development expenses in the third quarter 2011 were higher than the same period in the prior year due primarily to the continued emphasis on completing the product line offering for the food safety market.

“We are pleased to report another record quarter for the Company. While our permeation business accounted for the majority of our quarterly sales increase, our package testing products and gas analyzer instruments were also strong contributors. In July 2011, we released the GreenLight Model 930, which is the second product to be released this year in the series targeted to the food safety markets. We remain committed to developing new technologies that will enhance the quality and safety of our customers’ products in selected industrial markets,” 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. See www.mocon.com for more information.