Profile: MOCON Inc (MOCO.O)

MOCON, Inc. (MOCON), incorporated in February 1966, is engaged in designing, manufacturing, marketing and servicing products and providing consulting services primarily in the measurement and analytical instrument and services markets. The Company’s products include instruments that detect, measure and monitor gases and chemical compounds. Its gas and vapor permeation products were used in the food packaging industry to measure small amounts of moisture which adversely affects dry cereal and other food packaging. Its primary business, the detection, measurement and analysis of vapors and gases, serves industries far beyond food packaging. Its products serve niche markets from foods, beverages, pharmaceuticals and consumer products, to oil and gas exploration, industrial safety and homeland security.

Permeation Products and Services

The Company’s permeation products consist of systems and services that measure the rate at which various gases and vapors transmit through various materials. These products perform measurements under precise temperature and relative humidity conditions. The principal market for these products consists of manufacturers of packaging materials (including manufacturers of papers, plastic films and container coatings) and the users of such packaging materials, such as companies in the food, beverage, pharmaceutical and consumer product industries. Its permeation products and services accounted for approximately 53% during the year ended December 31, 2008. Permeation instruments that it manufacture include OX-TRAN systems for oxygen transmission rates, PERMATRAN-W systems for water vapor transmission rates, and PERMATRAN-C systems for carbon dioxide transmission rates.

Gas, Headspace and Other Analyzer Products and Services

The Company’s Baseline-MOCON, Inc. subsidiary located near Boulder, Colorado produces advanced gas analysis and monitoring instrumentation used in applications such as oil and gas exploration, process gas analysis, industrial hygiene and safety, environmental air monitoring and homeland security. The Company sells two categories of gas analyzer products: permanent gas analyzers and systems, and gas sensors which are sold to original equipment manufacturers (OEMs) of mobile equipment. Its gas analyzer products are for use in industrial hygiene (detection of hazardous gases in the workplace), hydrocarbon gas analysis for oil and gas exploration, contaminant detection in the manufacture of specialty gases, and environmental monitoring (tracking the release, or the presence, of toxic substances). These substances can include the intentional release of toxic gases by terrorists which would be a homeland security application. during the year ended December 31, 2008, the Company’s gas analyzer products accounted for approximately 22% of its consolidated sales. The Company markets some of these products under the names BEVALERT, PETROALERT, and piD-TECH.

The Company’s headspace analyzer products are used to analyze the amount and type of gas present in the headspace of flexible and rigid packages, as applied to gas flushing modified or controlled atmosphere packaging. The principal market for these products consists of packagers of foods, beverages and pharmaceuticals. Its headspace analyzer products include the PAC CHECK series of off-line headspace analyzers and the GSA series of on-line gas stream analyzers for continuous and intermittent monitoring of modified atmosphere packaging (MAP) and other gas flushing operations.

The Company’s leak detection products detect leaks in sterile medical trays, food pouches, blister packs and a wide range of other packages. It manufactures three types of leak detection instruments. The first type is a non-destructive leak detector that senses small amounts of carbon dioxide escaping from a package or tray. The second type of instrument detects leaks and checks for seal integrity by applying and measuring pressure within a package. The third type pulls a vacuum on a package and looks for vacuum or gas flow changes. The principal markets for these products are packagers of sterile medical items, pharmaceuticals and food products. During December 31, 2008, headspace analyzer and leak detection products accounted for 16% sales.

The Company’s weighing products automatically determine the weight of pharmaceutical capsules and tablets and reject those that are out of acceptable limits. Its VERICAP high-speed capsule weighing system runs at rates up to 2,000 capsules per minute and can be integrated into a capsule production line in pharmaceutical factories. Its AB automatic balance weighing systems are designed for off-line use for both tablets and capsules, and it market these products primarily to the pharmaceutical industry. In addition, it sell tablet inspection systems and blister packaging-related equipment through its Lippke subsidiary. During the year ended December 31, 2008, gas, headspace and other analyzer products and services accounted for an aggregate of approximately 42% of its consolidated sales.

Other Instruments and Services

The Company provides consulting and analytical services, on a special project basis, for customers that require custom solutions to problems. Services that it provides relate to absorption or diffusion of various compounds, shelf-life concerns, flavor or odor identification. The Company sells gas chromatographic (GC) instruments and provide services with an emphasis on multidimensional gas chromatography through its Microanalytics Instrumentation Corp. (Microanalytics) subsidiary, which is located near Austin, Texas. A variety of GC specific applications have been developed by its Microanalytics personnel, ranging from petroleum and petrochemical purity assay to aroma and off-odor analysis for the food, beverage, packaging and other industries. Its GC analyzer products include the AROMATRAX systems for odor and aroma analysis and profiling, the PURI-TRAX systems consisting of a vinyl chloride monomer purity analysis system and a system for measuring trace levels of oxygenated hydrocarbons in a variety of hydrocarbon products and process streams such as liquefied petroleum gases, and the VAPO-JECT automated vaporizing injector system for permanent and liquefied petroleum gases.