MOCON Reports Record Fourth Quarter and Annual Revenue
March 05 2015 - 09:15AM
Business Wire
Highlights:
- Record revenue for the quarter of $16.9
million, up 15 percent year-over-year
- Fourth consecutive quarter with record
revenue
- Record revenue for the year of $64.5
million, up 13 percent year-over-year
MOCON, Inc. (NASDAQ:MOCO), today reported financial results for
the fourth quarter and full year ended December 31, 2014.
Commenting on the Company’s performance, MOCON’s president and
CEO, Robert L. Demorest said, “We are very pleased with the fourth
quarter and year end results. The double digit revenue growth in
the fourth quarter and full year is driven by strong performance
across all of our reporting segments which resulted in improved
profitability, before the impact of a non-cash impairment charge,
as well as in a strengthening of our balance sheet.”
Fourth Quarter Revenue and Earnings Summary
Fourth quarter 2014 results compared to fourth quarter 2013:
- Revenue increased 15 percent to $16.9
million compared to $14.8 million for the same quarter in 2013, a
new quarterly record for the Company.
- Net loss for the fourth quarter 2014
was $2.0 million, or $0.36 per diluted share. The net loss reflects
the recognition of a $3.2 million, or $0.56 per diluted share,
non-cash impairment charge for an investment in an affiliated
company that was originally made in early 2010. See discussion
under Balance Sheet Summary below.
- Non-GAAP income and non-GAAP income per
diluted share for the fourth quarter 2014 was $1.1 million and
$0.20, respectively, compared to $0.4 million and $0.08,
respectively, for the same quarter of 2013. See reconciliation to
non-GAAP income below.
- Adjusted EBITDA for the fourth quarter
2014 was $2.4 million, an increase of 62 percent compared to $1.5
million the same quarter of 2013. See reconciliation to adjusted
EBITDA below.
- Revenue from foreign customers
accounted for 65 percent (38 percent in Europe, 27 percent outside
of Europe & the U.S.A.) of total revenue for the fourth quarter
of 2014 compared to 64 percent (40 percent in Europe, 24 percent
outside of Europe & the U.S.A.) in the fourth quarter of
2013.
Full year 2014 results compared to full year 2013:
- Revenue totaled $64.5 million for the
year ended December 31, 2014, an increase of 13 percent compared to
$57.1 million during the year ended December 31, 2013.
- Net income and diluted earnings per
share were $1.5 million and $0.27, respectively, for the year ended
December 31, 2014, compared to net income of $3.5 million, or $0.61
per diluted share, for the year ended December 31, 2013. Net income
for 2014 included an impairment of investment in affiliated company
of $3.2 million, or $0.55 per diluted share.
- Non-GAAP income and non-GAAP income per
diluted share for the year ended December 31, 2014 was $4.7 million
and $0.82, respectively, compared to $3.5 million and $0.61,
respectively, for the year ended December 31, 2013. See
reconciliation to non-GAAP income below.
- Adjusted EBITDA for year ended December
31, 2014 was $10.1 million compared to $7.7 million for the year
ended December 31, 2013. See reconciliation to adjusted EBITDA
below.
- Revenue from foreign customers
accounted for 69 percent (41 percent in Europe, 28 percent outside
of Europe & the U.S.A.) of total revenue for the year ended
December 31, 2014 compared to 67 percent (42 percent in Europe, 25
percent outside of Europe & the U.S.A.) in 2013.
Revenue by Segment ($ in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
Increase Increase
2014 2013 $ % 2014
2013 $ % Permeation
$ 6,758 $ 5,845 $ 913
16 % $ 23,380 $ 21,395
$ 1,985 9 % Package Testing
6,750 6,265 485 8 %
28,071 25,241 2,830 11 %
Industrial Analyzers and Other 3,430
2,673 757 28 %
13,024 10,472 2,552 24
% Total Revenue $ 16,938 $
14,783 $ 2,155 15 % $
64,475 $ 57,108 $ 7,367
13 %
Revenue growth for the fourth quarter and full year of 2014 was
attributable to strong performance across all of the Company's
business segments. Year-over-year, the Permeation segment increased
16 percent in the fourth quarter and 9 percent for the full year,
due primarily to steady demand outside of the United States for the
recently introduced next generation instruments. The Package
Testing segment grew 8 percent year-over-year in the fourth quarter
of 2014 and 11 percent year-over-year for full year 2014, due
primarily to improved shipments of leak detection and headspace
analyzers in the food packaging industry. The Industrial Analyzer
and Other segment grew 28 percent and 24 percent year-over-year for
the fourth quarter and full year 2014, respectively. This strong
demand was driven by oil and gas exploration and improved
performance for the environmental monitoring and beverage gas
analyzer markets.
Gross Profit and Operating Costs Commentary
Gross profit was 56 percent of revenue for the fourth quarter of
2014 which is consistent with the Company’s planned gross margin,
compared to 51 percent for the fourth quarter of 2013. For the full
year 2014, gross profit was 56 percent of revenue compared to 55
percent of revenue in 2013. Selling, general and administrative
expenses were higher in the fourth quarter and year ended December
31, 2014 compared to the same periods in 2013 due primarily to
increased commissions and headcount, as well as higher audit and
SOX consulting fees.
Balance Sheet Summary
- Cash and cash equivalents were $6.3
million on December 31, 2014 compared to $4.1 million on December
31, 2013.
- Cash provided by operations in the year
ended December 31, 2014 was $9.7 million compared to $3.6 million
in the same period of 2013.
- Days sales outstanding were 52 for the
fourth quarter of 2014, a 23 day improvement compared to 75 in the
fourth quarter of 2013.
- Total debt was $4.6 million on December
31, 2014 compared to $8.3 million on December 31, 2013
- During the fourth quarter of 2014 the
Company's management determined that its investment in an
affiliated company was other than temporarily impaired, and as a
result, recorded a non-cash, non-tax deductible charge of $3.2
million to fully impair the asset.
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.
Use of Non-GAAP Financial Measures
MOCON supplements its financial statements to provide investors
with earnings before interest, taxes, depreciation and amortization
(“EBITDA”), EBITDA plus share-based compensation, impairment and
foreign currency transactional losses (“Adjusted EBITDA”), net
income and net income per share before certain non-recurring
charges (“Non-GAAP income”), which are not calculated in accordance
with general accepted accounting principles (“GAAP”) in the United
States of America.
MOCON believes that these non-GAAP measures provide useful
information to the Company’s Board of Directors, management and
investors regarding certain trends relating to its financial
condition and operating performance. MOCON’s management uses these
non-GAAP measures to compare the Company's performance to that of
prior periods for trend analyses and planning purposes.
The method MOCON uses to produce non-GAAP results is not
computed according to GAAP, is likely to differ from the methods
used by other companies and should not be regarded as a replacement
for corresponding GAAP measures. MOCON urges investors to review
the reconciliation of its non-GAAP financial measures to the
comparable GAAP financial measures that are included in this press
release.
Safe Harbor
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,” “planned”, 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,
the terms of our credit agreement including financial covenants
included therein, competition and technological change, setbacks in
product development programs, order cancellations, dependence on
certain key industries, pricing and lack of availability of raw
materials, product pricing, crude oil pricing impact on oil
exploration activities, and other factors set forth in the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2013 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)
STATEMENT OF
OPERATIONS DATA: (unaudited)
Quarters
Ended December 31, Year Ended December 31, 2014
2013 2014 2013
Revenue Products $ 13,312 $
11,581 $ 50,694 $ 44,848
Services 2,674 2,305 10,658
9,126 Consulting 952
897 3,123 3,134
Total revenue 16,938
14,783 64,475
57,108 Cost of revenue Products
5,857 5,570 22,174 20,036
Services 1,054 1,132 4,188 3,936
Consulting 586 505
1,999 1,867 Total cost
of revenue 7,497 7,207
28,361 25,839
Gross profit 9,441 7,576 36,114
31,269 Selling, general and administrative
expenses 6,773 5,925 24,988 22,454
Research and development expenses 1,127 947
4,191 4,032
Impairment of investment in
affiliate
3,171 -
3,171 - Operating income
(loss) (1,630 ) 704 3,764
4,783 Other expense, net (39 )
(73 ) (306 )
(359 ) Income (loss) before income taxes
(1,669 ) 631 3,458 4,424
Income tax expense 364
197 1,922 963
Net income (loss) $ (2,033 )
$ 434 $ 1,536 $
3,461 Net income (loss) per common share:
Basic ($0.36 ) $ 0.08 $
0.27 $ 0.62 Diluted ($0.36
) $ 0.08 $ 0.27 $
0.61 Weighted average common shares outstanding:
Basic 5,696 5,572 5,665 5,545
Diluted 5,696 5,668 5,754 5,640
CONDENSED BALANCE
SHEET DATA: (unaudited)
December 31, 2014 December
31, 2013 Assets: Cash and marketable securities
$ 6,332 $ 4,338 Accounts receivable,
net 9,877 12,335 Inventories 8,705
7,471 Other current assets 2,587
3,426 Total current assets 27,501
27,570 Property, plant and equipment, net
5,562 5,727 Investment in affiliated company
- 3,442 Goodwill, intangibles and other assets
19,446 21,965 Total assets
$ 52,509 $ 58,704 Liabilities and
Shareholders’ Equity: Revolving lines of credit $
3,300 $ 4,264 Notes payable, current
983 2,698 Other current liabilities
11,166 9,973 Total noncurrent liabilities
2,587 4,300 Shareholders’ equity
34,473 37,469 Total liabilities and
shareholders’ equity $ 52,509 $
58,704
CONDENSED CASH
FLOW DATA: (unaudited)
December 31, 2014 December 31, 2013 Net
cash provided by operations $ 9,670 $
3,596 Net cash (used in) provided by investing
activities (1,533 ) 3,195 Net cash used
in financing activities (5,371 ) (5,151
) Effect of exchange rate changes (567
) 78 Net increase in cash
2,199 1,718 Cash beginning of year
4,133 2,415 Cash end of
year $ 6,332 $ 4,133
MOCON, INC. NON-GAAP RECONCILIATION
(in Thousands, Except Share Data)
Quarters Ended December
31, Year Ended December 31, 2014
2013 2014 2013 Net
income (loss) $ (2,033 ) $
434 $ 1,536 $ 3,461 Interest
expense, net 36 61 183 277
Income tax expense 364 197 1,922
963 Depreciation and amortization 631
638 2,555 2,433
EBITDA (1,002 ) 1,330
6,196 7,134 Share-based compensation
178 122 591 512 Impairment of
investment in affiliate 3,171 - 3,171
- Foreign currency transaction loss (gain)
16 10 136
83 Adjusted EBITDA $ 2,363
$ 1,462 $ 10,094 $
7,729 Net income (loss) $
(2,033 ) $ 434 $ 1,536
$ 3,461 Impairment of investment in affiliate
3,171 - 3,171
- Non-GAAP Income $ 1,138
$ 434 $ 4,707 $
3,461 Net income (loss) per common share:
Basic ($0.36 ) $ 0.08 $
0.27 $ 0.62 Diluted ($0.36
) $ 0.08 $ 0.27 $
0.61 Weighted average common shares
outstanding: Basic 5,696 5,572
5,665 5,545 Diluted 5,696 5,668
5,754 5,640 Non-GAAP income per common
share: Basic $ 0.20 $ 0.08
$ 0.83 $ 0.62 Diluted $
0.20 $ 0.08 $ 0.82 $
0.61 Non-GAAP weighted average common shares
outstanding: Basic 5,696 5,572
5,665 5,545 Diluted 5,789 5,668
5,754 5,640
MOCON, Inc.Elissa Lindsoe,
763-493-6370CFOwww.mocon.com
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