10-Q 1 mocon023985_10q.txt MOCON, INC. FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended June 30, 2002 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________________ to _________________ Commission File Number 0-9273 MOCON, INC. (Exact name of registrant as specified in its charter) MINNESOTA 41-0903312 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7500 Boone Avenue North, Minneapolis, Minnesota 55428 (Address of principal executive offices) (Zip code) (763) 493-6370 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the SECURITIES EXCHANGE ACT OF 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES __X__ NO _____ 5,497,989 Common Shares were outstanding as of June 30, 2002 MOCON, INC. INDEX TO FORM 10-Q For the Quarter Ended June 30, 2002 Page Number ------ PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets (Unaudited) June 30, 2002 and December 31, 2001 1 Condensed Consolidated Statements of Income (Unaudited) Three months and six months ended June 30, 2002 and 2001 2 Condensed Consolidated Statements of Cash Flows (Unaudited) Six months ended June 30, 2002 and 2001 3 Notes to Condensed Consolidated Financial Statements (Unaudited) 4-7 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 8-10 Item 3. Quantitative and Qualitative Disclosures About Market Risk 11 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 12 Item 6. Exhibits and Reports on Form 8-K 12 PART I. FINANCIAL INFORMATION Item 1. Financial Statements MOCON, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, December 31, 2002 2001 ------------ ------------ ASSETS Current assets: Cash and temporary cash investments $ 838,660 $ 1,030,596 Marketable securities, current 3,717,301 3,168,858 Accounts receivable, net 3,580,218 4,271,430 Other receivables 50,302 30,527 Inventories 4,051,453 3,662,043 Prepaid expenses 150,759 250,319 Deferred income taxes 429,399 429,399 ------------ ------------ Total current assets 12,818,092 12,843,172 ------------ ------------ Marketable securities, noncurrent 471,842 735,463 ------------ ------------ Net property, plant, and equipment 2,251,801 2,263,505 ------------ ------------ Other assets: Software development costs, net 697,850 422,660 Goodwill, net 1,346,795 1,346,795 Technology rights and other intangibles, net 1,192,710 1,207,794 Other 142,214 138,719 ------------ ------------ Total other assets 3,379,569 3,115,968 ------------ ------------ TOTAL ASSETS $ 18,921,304 $ 18,958,108 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 916,508 $ 1,301,097 Accrued compensation and vacation 557,570 773,906 Other accrued expenses 990,945 1,095,530 ------------ ------------ Total current liabilities 2,465,023 3,170,533 Deferred income taxes 319,603 319,603 ------------ ------------ Total liabilities 2,784,626 3,490,136 ------------ ------------ Stockholders' equity: Common stock - $.10 par value 549,799 547,645 Capital in excess of par value 237,564 105,057 Retained earnings 15,349,352 14,806,169 Accumulated other comprehensive income (37) 9,101 ------------ ------------ Total stockholders' equity 16,136,678 15,467,972 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,921,304 $ 18,958,108 ============ ============
Note: The condensed consolidated balance sheet at December 31, 2001 has been summarized from the Company's audited consolidated balance sheet at that date. See accompanying notes to condensed consolidated financial statements. -1- MOCON, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ---------------------------- ---------------------------- 2002 2001 2002 2001 ---------------------------- ---------------------------- Sales Products $ 4,453,124 $ 3,958,789 $ 8,840,736 $ 7,917,524 Consulting services 501,911 660,166 942,977 1,240,581 ------------ ------------ ------------ ------------ Total sales 4,955,035 4,618,955 9,783,713 9,158,105 ------------ ------------ ------------ ------------ Cost of sales Products 2,012,909 1,458,444 3,974,948 2,846,883 Consulting services 283,021 287,632 553,991 658,164 ------------ ------------ ------------ ------------ Total cost of sales 2,295,930 1,746,076 4,528,939 3,505,047 ------------ ------------ ------------ ------------ Gross profit 2,659,105 2,872,879 5,254,774 5,653,058 ------------ ------------ ------------ ------------ Selling, general and administrative expenses 1,506,152 1,415,354 2,976,459 2,835,983 Research and development expenses 305,358 273,831 604,514 524,192 ------------ ------------ ------------ ------------ 1,811,510 1,689,185 3,580,973 3,360,175 Operating income 847,595 1,183,694 1,673,801 2,292,883 Investment income 55,253 106,302 114,883 238,352 ------------ ------------ ------------ ------------ Income before income taxes 902,848 1,289,996 1,788,684 2,531,235 Income taxes 298,000 413,000 586,000 810,000 ------------ ------------ ------------ ------------ Net income $ 604,848 $ 876,996 $ 1,202,684 $ 1,721,235 ============ ============ ============ ============ Net income per common share: Basic $ 0.11 $ 0.16 $ 0.22 $ 0.31 ============ ============ ============ ============ Diluted $ 0.11 $ 0.16 $ 0.21 $ 0.31 ============ ============ ============ ============ Weighted average shares outstanding: Basic 5,495,199 5,458,977 5,487,025 5,588,108 ============ ============ ============ ============ Diluted 5,674,849 5,508,588 5,654,423 5,636,377 ============ ============ ============ ============
See accompanying notes to condensed consolidated financial statements. -2- MOCON, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ----------------------------- 2002 2001 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,202,684 $ 1,721,235 Adjustments to reconcile net income to net cash provided by operating activities: Loss on disposition of long-term assets -- (7,931) Depreciation and amortization 419,434 371,974 Deferred income taxes -- (10,800) Changes in operating assets and liabilities: Trade accounts receivable 691,212 (241,365) Other receivables (19,775) 45,494 Inventories (389,410) 109,422 Prepaid expenses 99,560 74,162 Accounts payable (384,589) (303,191) Accrued compensation and vacation (216,336) (73,042) Other accrued expenses (105,768) (161,333) --------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,297,012 1,524,625 --------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities (2,117,374) (1,054,906) Proceeds from sales of marketable securities 1,823,414 3,729,803 Purchases of property and equipment (268,951) (501,930) Proceeds from sale of fixed assets -- 705 Purchases of software (325,296) -- Purchases of patents, trademarks and technology rights (73,589) (11,764) Other (3,495) (3,056) --------------------------------------------------------------------------------------------------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (965,291) 2,158,852 --------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from the exercise of stock options 134,660 3,399 Purchases and retirement of common stock -- (2,378,473) Dividends paid (658,317) (676,099) Other -- 3,000 --------------------------------------------------------------------------------------------------- NET CASH USED IN FINANCING ACTIVITIES (523,657) (3,048,173) --------------------------------------------------------------------------------------------------- NET (DECREASE) INCREASE IN CASH AND TEMPORARY CASH INVESTMENTS (191,936) 635,304 CASH AND TEMPORARY CASH INVESTMENTS: Beginning of period 1,030,596 641,942 --------------------------------------------------------------------------------------------------- End of period $ 838,660 $ 1,277,246 --------------------------------------------------------------------------------------------------- Supplemental schedule of noncash investing activities: Unrealized holding (loss) gain on available-for-sale securities $ (9,138) $ 20,232
See accompanying notes to condensed consolidated financial statements. -3- MOCON, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 - Condensed Consolidated Financial Statements The condensed consolidated balance sheet as of June 30, 2002, the condensed consolidated statements of income for the three and six month periods ended June 30, 2002 and 2001, and the condensed consolidated statements of cash flows for the six month periods ended June 30, 2002 and 2001 have been prepared by us, without audit. However, all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows at June 30, 2002, and for all periods presented, have been made. The results of operations for the period ended June 30, 2002 are not necessarily indicative of operating results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes included in our December 31, 2001 annual report to shareholders. Note 2 - Inventories Inventories consist of the following: June 30, December 31, 2002 2001 ------------ ------------ Finished Products $ 422,903 $ 338,852 Work in Process 1,415,666 1,316,881 Raw Materials 2,212,884 2,006,310 ------------ ------------ $ 4,051,453 $ 3,662,043 ============ ============ Note 3 - Net Income Per Common Share Basic net income per common share is computed by dividing net income by the weighted average common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average common and dilutive potential common stock outstanding during the period. -4- The following table presents a reconciliation of the denominators used in the computation of net income per common share-basic and net income per common share-diluted for the three and six month periods ended June 30, 2002, and 2001:
Three Months Ended Six Months Ended June 30, June 30, --------------------------------------------------- 2002 2001 2002 2001 --------------------------------------------------------------------------------------------------- Weighted shares of common stock outstanding - basic 5,495,199 5,458,977 5,487,025 5,588,108 Weighted shares of common stock assumed upon exercise of stock options 179,650 49,611 167,398 48,269 --------------------------------------------------------------------------------------------------- Weighted shares of common stock outstanding - diluted 5,674,849 5,508,588 5,654,423 5,636,377 ===================================================================================================
Note 4 - Goodwill and Intangible Assets In June 2001, the Financial Accounting Standards Board approved for issuance Statement of Financial Accounting Standards (SFAS) 141, BUSINESS COMBINATIONS, and SFAS 142, GOODWILL AND INTANGIBLE ASSETS. For all business combinations initiated after June 30, 2001, these Statements require the use of the purchase, rather than the pooling, method of accounting. Intangible assets acquired in a business combination are recorded separately from goodwill if they arise from contractual or other legal rights or are separable from the acquired entity and can be sold, transferred, licensed, rented or exchanged, either individually or as part of a related contract, asset or liability. The Statements also provide that effective January 1, 2002, goodwill is no longer amortized. Instead, goodwill and intangible assets with indefinite lives are tested for impairment annually and whenever there is an impairment indicator. The Company performed an initial impairment test upon adoption of the new statement and determined that no impairment exists. The following table presents a reconciliation of net income and income per share adjusted for the exclusion of goodwill, net of tax:
Three Months Ended June 30, Six Months Ended June 30, ----------------------------------------------------------------- 2002 2001 2002 2001 ----------------------------------------------------------------- Reported net income $ 604,848 $ 876,996 $ 1,202,684 $ 1,721,235 Add: Goodwill amortization, net of tax -- 19,428 -- 38,856 ----------------------------------------------------------------- Adjusted net income $ 604,848 $ 896,424 $ 1,202,684 $ 1,760,091 ----------------------------------------------------------------- Reported basic earnings per share $ 0.11 $ 0.16 $ 0.22 $ 0.31 Add: Goodwill amortization, net of tax -- -- -- -- ----------------------------------------------------------------- Adjusted basic earnings per share $ 0.11 $ 0.16 $ 0.22 $ 0.31 ----------------------------------------------------------------- Reported diluted earnings per share $ 0.11 $ 0.16 $ 0.21 $ 0.31 Add: Goodwill amortization, net of tax -- -- -- -- ----------------------------------------------------------------- Adjusted diluted earnings per share $ 0.11 $ 0.16 $ 0.21 $ 0.31 -----------------------------------------------------------------
-5- Information regarding the Company's other intangible assets are as follows:
As of June 30, 2002 Carrying Accumulated Amount Amortization Net --------------------------------------------- Patents $ 536,563 $ 138,433 $ 398,130 Trademarks and tradenames 64,622 52,282 12,340 Technology rights 600,000 210,000 390,000 Other intangibles 452,008 109,420 342,588 Projects in process 49,652 -- 49,652 --------------------------------------------- $ 1,702,845 $ 510,135 $ 1,192,710 =============================================
Amortization expense for the three and six months ended June 30, 2002 was $44,372 and $88,673 respectively. Estimated amortization expense for each of the five succeeding fiscal years based on the intangible assets as of June 30, 2002 is as follows: Estimated Expense ----------------------------- 2002 $176,735 2003 175,229 2004 174,873 2005 174,780 2006 161,472 Note 5 - Shipping and Handling Fees and Costs In 2001, we adopted the provisions of Emerging Issues Task Force 00-10 (EITF 00-10), Accounting for Shipping and Handling Fees and Costs. We historically classified shipping and handling costs billed to customers as an offset in cost of sales, with the related expenses being recorded in cost of sales. Effective with the adoption of EITF 00-10, approximately $39,000 and $94,000 of shipping and handling costs billed to customers were reclassified from cost of sales to revenues for the three and six month periods ended June 30, 2001, respectively. Note 6 - Marketable Securities Available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on available-for-sale securities are excluded from income and are reported as a separate component of stockholders' equity until realized. At June 30, 2002, and June 30, 2001, this resulted in a net unrealized (loss) gain of ($37) and $20,232, respectively, within stockholders' equity. -6- Note 7 - Comprehensive Income
Three Months Ended Six Months Ended June 30, June 30, 2002 2001 2002 2001 -------------------------------------------------------------------------------------------------------------- Net Income $ 604,848 $ 876,996 $ 1,202,684 $ 1,721,235 Net unrealized (loss) gain on marketable securities (5,395) (3,232) (9,138) 20,232 -------------------------------------------------------------------------------------------------------------- Comprehensive Income $ 599,453 $ 873,764 $ 1,193,546 $ 1,741,467 ==============================================================================================================
-7- MOCON, INC. Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition This Form 10-Q includes certain statements that are deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events, or developments that we expect, believe, or anticipate will or may occur in the future, are forward-looking statements. The forward-looking statements in this filing are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statement because these statements are subject to a number of risks and uncertainties including the risk factors described in our annual report on Form 10-K for the year ended December 31, 2001, including, but not limited to, the factors included in the section entitled "Certain Important Factors." Persons reading this Form 10-Q should carefully review the discussion of all of the risk factors described in such Form 10-K and in our other filings made from time to time with the Securities and Exchange Commission. Results of Operations Sales for the three month period ended June 30, 2002, were $4,955,035, up 7 percent from second quarter 2001 sales of $4,618,955. The increase in 2002 sales was primarily the result of Baseline-MOCON, Inc. (Baseline) sales in the second quarter totaling $952,099 (Baseline was acquired in the fourth quarter of 2001), and increased sales of our sample preparation and gas chromatography analyzer products, offset somewhat by decreases in the sales volume of our weighing products, permeation products, headspace analyzer products, and consulting services sales, which continue to be affected by the global economic slowdown. The increased sales of our sample preparation products was primarily due to continued sales in the second quarter of 2002 of a new unit to Waters Corporation of Milford, MA, for use in the drug discovery and life sciences markets. Sales for the six month period ended June 30, 2002, were $9,783,713, up 7 percent from sales for the first six months of 2001 of $9,158,105. The 7 percent increase was primarily the result of Baseline sales in the first six months of 2002 totaling $2,165,205, and increased sales of our sample preparation products, offset somewhat by decreases in the sales volume of our weighing products, permeation products, headspace analyzer products, and decreases in consulting services sales. Total domestic sales for the quarter ended June 30, 2002, including domestic Baseline sales of $712,438, increased 35 percent over the second quarter of 2001 to $3,264,040, and total foreign sales, including foreign Baseline sales of $239,661, decreased 23 percent to $1,690,995. Domestic sales were 66 percent of total second quarter 2002 sales, compared to $2,412,932, or 52 percent, of second quarter 2001 sales. Foreign sales were 34 percent of total second quarter 2002 sales, compared to $2,206,023, or 48 percent, of second quarter 2001 sales. Total domestic sales for the six months ended June 30, 2002, including domestic Baseline sales of $1,656,954, increased 23 percent over the six months ended June 30, 2001, to $6,436,737, and total foreign sales, including foreign -8- Baseline sales of $508,251, decreased 14 percent to $3,346,976. Domestic sales were 66 percent for the six months ended June 30, 2002, compared to $5,247,703, or 57 percent, for the same period in 2001. Foreign sales were 34 percent for the first six months of 2002, compared to $3,910,402, or 43 percent, for the same period in 2001. We derive our revenue from product sales and consulting services, consisting of standard laboratory testing services and consulting and analytical services performed for various customers. In the second quarter of 2002, product sales were $4,453,124 and consulting services were $501,911, or 90 and 10 percent, respectively, of our total second quarter 2002 sales. This compares to product sales of $3,958,789 and consulting services of $660,166 in the second quarter of 2001, or 86 and 14 percent of total sales, respectively. For the first six months of 2002, product sales were $8,840,736 and consulting services were $942,977, or 90 and 10 percent, respectively, of our total sales for the first six months of 2002. This compares to product sales of $7,917,524 and consulting services of $1,240,581, or 86 and 14 percent of total sales, respectively, for the same period in 2001. Gross profit was 54 percent of sales for the three and six month periods ended June 30, 2002, compared to 62 percent of sales for the three and six month periods ended June 30, 2001. The 8 percentage point decrease in the gross profit margin was primarily due to the product mix in the second quarter and first six months of 2002 including Baseline sales, which on average carry a lower gross margin percentage. We are currently working on increasing Baseline's gross margin percentage in several ways, including increasing prices where appropriate, and introducing new higher margin products. Selling, general and administrative (SG&A) expenses were 30 percent for both the three and six month periods ended June 30, 2002. This compares to 31 percent of sales for the three and six month periods ended June 30, 2001. The $90,798 and $140,476 total dollar increases for the three and six months ended June 30, 2002, respectively, are due primarily to an increase in commission and other expenses associated with the increase in sales, including Baseline sales. Research and development (R&D) expenses as a percentage of sales were 6 percent for the quarters and six month periods ended June 30, 2002 and June 30, 2001. Continued R&D expenditures are necessary as we develop new products to expand in our niche markets. For the foreseeable future, we expect to spend on an annual basis approximately 5 to 8 percent of sales on R&D. Investment income decreased $51,049 in the second quarter of 2002 as compared to the second quarter of 2001, and decreased $123,469 in the first six months of 2002 as compared to the same period in 2001. The decreases are the result of lower average investment balances and investment yields in 2002 versus 2001. Our provision for income taxes was 33 and 32 percent of income before income taxes for the three and six month periods ending June 30, 2002 and 2001, respectively. We review the tax rate quarterly and may make adjustments to reflect changing estimates. Based on current operating conditions and income tax laws, we expect the effective tax rate for all of 2002 to be in a range of 32 to 35 percent. Net income was $604,848 for the second quarter of 2002, compared to $876,996, for the second quarter of 2001. Diluted net income per share was $.11 for the second quarter of 2002, compared to $.16 for the same period in 2001. For the six months ended June 30, 2002, net income was $1,202,684 compared to $1,721,235 for the six months ended June 30, 2001. Diluted net income per share was $.21 and $.31, respectively, for the six month periods ended June 30, 2002, and 2001. -9- Liquidity and Capital Resources We continue to maintain a strong financial position. Total cash, temporary cash investments and marketable securities increased $92,886 during the six months ended June 30, 2002. We used our cash resources to pay dividends of $658,317 during this period. We have no long-term debt or material commitments for capital expenditures as of June 30, 2002. Our plant and equipment does not require any major expenditures to accommodate a significant increase in operating demands. We anticipate that a combination of our existing cash, temporary cash investments and marketable securities, plus an expected continuation of cash flow from operations, will continue to be adequate to fund operations, capital expenditures and dividend payments in the foreseeable future. Critical Accounting Policies MOCON considers its critical accounting policies to be the allowance for doubtful accounts, inventory reserves and recoverability of long-lived assets as discussed in the section with this title in Management's Discussion and Analysis of Financial Condition and Results of Operations that appears in the company's Annual Report on Form 10-K for the year ended December 31, 2001. No material change occurred in the periods covered by this report. New Accounting Pronouncements We adopted the provisions of Statement 142 effective January 1, 2002. Goodwill and intangible assets determined to have an indefinite useful life acquired in a purchase business combination completed after June 30, 2001 have not been amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-Statement 142 accounting literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 have been amortized prior to the adoption of Statement 142. As of June 30, 2002, we have unamortized goodwill in the amount of $1,346,795 and unamortized identifiable intangible assets related to acquisitions in the amount of $879,588. If the new accounting standards would have been in effect for the second quarter of 2001, net income from continuing operations would have increased by $19,428 and $38,856 for the three and six months periods ended June 30, 2001, respectively, with no effect on net income per common share. We adopted the provisions of FASB Statement No. 144, ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS, effective January 1, 2002. Statement 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. While Statement 144 supersedes Statement No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, it retains many of the fundamental provisions of that Statement. The adoption of Statement 144 did not impact our financial condition or results of operations. -10- MOCON, INC. Item 3. Quantitative and Qualitative Disclosures About Market Risk Market Risk Management Substantially all of our marketable securities are at fixed interest rates. However, all of our marketable securities mature within three years, therefore, we believe that the market risk arising from the holding of these financial instruments is minimal. We currently sell our products and services in United States dollars; accordingly, the exposure to foreign currency exchange risk is minimal. There have been no significant changes since December 31, 2001. -11- MOCON, INC. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders At the Annual Meeting of Shareholders of MOCON, Inc. on May 21, 2002, the nominees for election as Directors of the Company were elected without opposition as follows: Director-Nominee Votes For Votes Withheld/Against ---------------- --------- ---------------------- Robert L. Demorest 4,789,844 256,412 Dean B. Chenoweth 4,783,999 262,257 J. Leonard Frame 4,787,711 258,545 Paul L. Sjoquist 4,791,403 254,853 Richard A. Proulx 4,791,403 254,853 Tom C. Thomas 4,784,379 261,877 Ronald A. Meyer 4,789,824 256,432 Daniel W. Mayer 4,786,469 259,787 The proposal to amend our 1998 Stock Option Plan to increase the number of shares of our common stock specifically reserved for issuance under that plan by 550,000 shares was adopted as follows: For the proposal: 2,059,634 shares Against the proposal: 1,142,442 shares Abstaining: 223,021 shares Item 6. Exhibits and Reports on Form 8-K a. Exhibits None b. Reports on Form 8-K There were no reports on Form 8-K filed for the quarter ended June 30, 2002. -12- SIGNATURES Pursuant to the requirements of the SECURITIES EXCHANGE ACT of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MOCON, INC. Registrant Date: August 13, 2002 /s/ Robert L. Demorest, Chairman, President and Chief Executive Officer Date: August 13, 2002 /s/ Dane D. Anderson, Vice President, Treasurer and Chief Financial Officer The written statements of our Chief Executive Officer and Chief Financial Officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, accompanied the filing of this report by correspondence to the Securities and Exchange Commission and have been furnished under Item 9 of our Form 8-K filed August 13, 2002. -13-