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LAKEWOOD, Colo., Oct. 03, 2025 (GLOBE NEWSWIRE) -- Mesa Laboratories, Inc. (NASDAQ:MLAB) will issue a press release with financial results for the second quarter of fiscal year 2026 following market close on Thursday, November 6, 2025. About Mesa Laboratories, Inc. Mesa is a global leader in the design and manufacture of life science tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare and medical device industries. Mesa offers products and services to he ...

Company Overview - Mesa Labs (MLAB) shares increased by 5.7% to close at $73.14, with notable trading volume compared to typical sessions, and a 3.4% gain over the past four weeks [1] - The company is recognized for its quality control instruments and disposable products [3] Financial Performance - Mesa Labs is expected to report quarterly earnings of $2.59 per share, reflecting a year-over-year increase of 5.7%, with revenues projected at $61.3 million, up 6% from the previous year [3] - The company recently repaid $97.5 million of its 1.375% Convertible Senior Notes due August 2025, indicating a strong execution of its strategic financial plan [2] Market Sentiment - Investor optimism is driven by Mesa Labs' steady commercial success, ongoing traction with key initiatives, and a resilient operating model [2] - The consensus EPS estimate for the upcoming quarter has remained unchanged over the last 30 days, suggesting that stock price movements may be influenced by trends in earnings estimate revisions [4] Industry Context - Mesa Labs operates within the Zacks Medical - Instruments industry, where Waters (WAT) is another player, closing 1.8% lower at $300.87, with a 5.5% return over the past month [4] - Waters' consensus EPS estimate has also remained unchanged at $3.22, representing a year-over-year change of 9.9% [5]

Core Insights - Mesa Laboratories, Inc. has successfully executed its financial strategy by repaying $97.5 million of its 1.375% Convertible Senior Notes due August 2025, utilizing funds drawn from its Credit Agreement [1][2] - The company aims to optimize its capital structure and reduce shareholder dilution while supporting long-term growth [2][5] Financial Performance - The company drew $97.0 million under its Amended and Restated Credit Agreement, increasing the total outstanding balance to $108 million [1] - Interest rate on the Credit Facility is currently 7.18% and is expected to decrease with future Federal Funds Rate reductions, with anticipated interest payments of approximately $2.7 million for Q2 FY 2026 [2][3] Debt Management - Mesa's total net leverage ratio was 3.16 as of June 30, 2025, defined as total debt minus unrestricted cash in excess of $10 million compared to trailing 12 months EBITDA [3] - The company made over $7 million in principal payments in Q1 FY 2026 and expects to make approximately $20 million in principal payments for the remaining quarters of FY 2026 [4] Company Overview - Mesa Laboratories, Inc. is a global leader in designing and manufacturing life science tools and quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries [6]

Core Viewpoint - Mesa Labs reported quarterly earnings of $2.32 per share, missing the Zacks Consensus Estimate of $2.46 per share, and down from $2.83 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -5.69%, and the company had a previous quarter surprise of -18.91% with earnings of $2.23 per share against an expectation of $2.75 [2] - Revenues for the quarter were $59.54 million, missing the Zacks Consensus Estimate by 2.07%, and up from $58.17 million year-over-year [3] - Over the last four quarters, the company has surpassed consensus EPS estimates only once and has topped revenue estimates just once [2][3] Stock Performance - Mesa Labs shares have declined approximately 42% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [4] - The current Zacks Rank for Mesa Labs is 5 (Strong Sell), indicating expected underperformance in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $2.59 on revenues of $61.3 million, and for the current fiscal year, it is $10.60 on revenues of $253.2 million [8] - The outlook for the Medical - Instruments industry is currently in the bottom 37% of over 250 Zacks industries, which may impact the stock's performance [9]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Mesa Laboratories, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income, comprehensive income, stockholders' equity, and cash flow statements, along with detailed accounting notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :-------------------------------- | :----------------------------- | :---------------------------- | | Total Assets | $435,743 | $433,348 | | Total Liabilities | $263,247 | $273,518 | | Total Stockholders' Equity | $172,496 | $159,830 | | Cash and cash equivalents | $21,279 | $27,321 | | Accounts receivable, net | $39,068 | $41,970 | | Inventories | $28,106 | $25,365 | | Convertible notes, current portion | $97,432 | $97,297 | - Total assets increased by **$2,395 thousand** from March 31, 2025, to June 30, 2025, while total liabilities decreased by **$10,271 thousand**, leading to a **$12,666 thousand** increase in total stockholders' equity[10](index=10&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :--------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | Revenues | $59,543 | $58,170 | +2.4% | | Cost of revenues | $22,604 | $20,921 | +8.0% | | Gross profit | $36,939 | $37,249 | -0.8% | | Operating expense | $33,875 | $31,669 | +7.0% | | Operating income | $3,064 | $5,580 | -45.1% | | Earnings before income taxes | $7,012 | $3,905 | +79.6% | | Income tax expense | $2,270 | $517 | +339.1% | | Net income | $4,742 | $3,388 | +40.0% | | Basic EPS | $0.87 | $0.63 | +38.1% | | Diluted EPS | $0.85 | $0.62 | +37.1% | - Net income increased by **40.0%** year-over-year, primarily driven by a significant increase in 'Other (income) expense, net' which swung from an expense of **$1,720 thousand** in 2024 to an income of **$(6,146) thousand** in 2025, largely due to foreign currency gains[12](index=12&type=chunk)[121](index=121&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Net income | $4,742 | $3,388 | | Foreign currency translation adjustments | $5,977 | $452 | | Comprehensive income | $10,719 | $3,840 | - Comprehensive income significantly increased to **$10,719 thousand** in Q1 FY2026 from **$3,840 thousand** in Q1 FY2025, primarily due to a substantial increase in foreign currency translation adjustments from **$452 thousand** to **$5,977 thousand**[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | March 31, 2025 (in thousands) | June 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :---------------------------- | :--------------------------- | :-------------------- | | Total Stockholders' Equity | $159,830 | $172,496 | +$12,666 | | Common Stock Amount | $358,541 | $361,361 | +$2,820 | | Accumulated Deficit | $(188,936) | $(185,067) | +$3,869 | | Accumulated Other Comprehensive (Loss) Income (AOCI) | $(9,775) | $(3,798) | +$5,977 | - The increase in total stockholders' equity was driven by net income of **$4,742 thousand**, stock-based compensation expense of **$3,881 thousand**, and positive foreign currency translation of **$5,977 thousand**, partially offset by dividends paid of **$873 thousand** and tax withholding on restricted stock units of **$1,061 thousand**[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | Net cash provided by operating activities | $1,893 | $10,743 | -$8,850 | | Net cash (used in) investing activities | $(1,009) | $(891) | -$118 | | Net cash (used in) financing activities | $(8,427) | $(9,419) | +$992 | | Effect of exchange rate changes on cash | $1,501 | $(175) | +$1,676 | | Net (decrease) increase in cash and cash equivalents | $(6,042) | $258 | -$6,300 | | Cash and cash equivalents at end of period | $21,279 | $28,472 | -$7,193 | - Net cash provided by operating activities decreased significantly by **$8.8 million** year-over-year, primarily due to lower gross margins, higher cash payments for accrued bonuses and commissions, and increased inventory purchases for tariff strategy[140](index=140&type=chunk)[144](index=144&type=chunk) - Cash used in financing activities decreased by **$992 thousand**, mainly due to higher debt borrowings (**$10.5 million** in 2025 vs. **$73.5 million** in 2024) and lower debt repayments (**$7.4 million** in 2025 vs. **$9.4 million** in 2024), partially offset by a **$9.6 million** GKE acquisition-related holdback payment in 2025[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Description of Business and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Description%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Mesa Laboratories, Inc. is a global leader in life sciences tools and quality control solutions for regulated applications in pharmaceutical, healthcare, and medical device industries, with manufacturing in the US and Europe, and sales in North America, Europe, and Asia Pacific[23](index=23&type=chunk) - The company operates in four reportable segments: Sterilization and Disinfection Control, Biopharmaceutical Development, Calibration Solutions, and Clinical Genomics[24](index=24&type=chunk)[26](index=26&type=chunk) - The FASB issued ASU No. 2023-09 (Income Taxes) effective for fiscal years beginning after December 15, 2024 (FY2026), and ASU No. 2024-03 (Expense Disaggregation) effective for fiscal years beginning after December 15, 2026 (FY2028), which are expected to increase disclosure detail but not materially impact consolidated financial statements[29](index=29&type=chunk)[30](index=30&type=chunk) [Note 2. Revenue](index=10&type=section&id=Note%202.%20Revenue) - Revenue is generated from hardware sales (instruments, software licenses), consumables (single-use products critical for instrument use or standalone), and services (maintenance, calibration, testing)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) Revenue by Category | Revenue Category | Q1 FY2026 (in thousands) | Q1 FY2025 (in thousands) | YoY Change | | :----------------------- | :----------------------- | :----------------------- | :--------- | | Consumables | $35,773 | $33,010 | +8.4% | | Hardware and software | $12,569 | $14,075 | -10.7% | | Services | $11,201 | $11,085 | +1.0% | | Total Revenues | $59,543 | $58,170 | +2.4% | Geographic Revenue | Geographic Revenue | Q1 FY2026 (in thousands) | Q1 FY2025 (in thousands) | YoY Change | | :----------------------- | :----------------------- | :----------------------- | :--------- | | United States | $27,646 | $26,861 | +2.9% | | China | $5,429 | $6,559 | -17.3% | | Other | $26,468 | $24,750 | +6.9% | | Total Revenues | $59,543 | $58,170 | +2.4% | - Contract liabilities (unearned revenues) increased slightly from **$14,803 thousand** as of March 31, 2025, to **$15,087 thousand** as of June 30, 2025, with **$4,385 thousand** of prior year liabilities recognized as revenue[37](index=37&type=chunk) [Note 3. Fair Value Measurements](index=12&type=section&id=Note%203.%20Fair%20Value%20Measurements) - Cash and cash equivalents, trade accounts receivable, and trade accounts payable are classified as Level 1 fair value due to their short-term nature[38](index=38&type=chunk) - The company's 1.375% convertible notes due August 15, 2025, with an outstanding principal of **$97,500 thousand**, are valued using Level 2 inputs, with fair value approximating **$96,708 thousand** as of June 30, 2025[40](index=40&type=chunk)[41](index=41&type=chunk) - The carrying amounts of the term loan and revolving line of credit approximate fair value due to variable interest rates[41](index=41&type=chunk) [Note 4. Supplemental Information](index=13&type=section&id=Note%204.%20Supplemental%20Information) Inventory by Category | Inventory Category | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :----------------- | :--------------------------- | :---------------------------- | | Raw materials | $16,089 | $14,775 | | Work in process | $626 | $560 | | Finished goods | $11,391 | $10,030 | | Total inventories | $28,106 | $25,365 | Accrued Payroll and Benefits | Accrued Payroll and Benefits | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :--------------------------- | :--------------------------- | :---------------------------- | | Wages and paid-time-off payable | $4,013 | $3,672 | | Payroll related taxes | $3,277 | $2,475 | | Bonus payable | $2,269 | $10,891 | | Other benefits payable | $867 | $820 | | Total | $10,426 | $17,858 | - Accrued payroll and benefits decreased significantly from **$17,858 thousand** to **$10,426 thousand**, primarily due to the payment of fiscal year 2025 bonuses in June 2025[44](index=44&type=chunk) - Other accrued expenses decreased from **$24,601 thousand** to **$16,070 thousand**, mainly due to the settlement of the GKE acquisition holdback liability in April 2025[45](index=45&type=chunk) [Note 5. Goodwill and Intangible Assets, Net](index=14&type=section&id=Note%205.%20Goodwill%20and%20Intangible%20Assets,%20Net) Intangible Assets | Intangible Asset | June 30, 2025 Net Carrying Amount (in thousands) | March 31, 2025 Net Carrying Amount (in thousands) | | :----------------------- | :----------------------------------------------- | :------------------------------------------------ | | Customer relationships | $73,524 | $72,880 | | Other intangibles | $23,877 | $23,995 | | Total intangible assets | $97,401 | $96,875 | Amortization Expense | Amortization Expense | Q1 FY2026 (in thousands) | Q1 FY2025 (in thousands) | | :--------------------------- | :----------------------- | :----------------------- | | Amortization in cost of revenues | $702 | $647 | | Amortization in general and administrative | $3,851 | $3,414 | | Total | $4,553 | $4,061 | - Goodwill increased from **$181,760 thousand** as of March 31, 2025, to **$188,050 thousand** as of June 30, 2025, primarily due to a **$6,290 thousand** effect of foreign currency translation[47](index=47&type=chunk) [Note 6. Indebtedness](index=15&type=section&id=Note%206.%20Indebtedness) - The Credit Facility, maturing in April 2029, includes a **$125,000 thousand** revolving credit facility (Revolver) and a **$75,000 thousand** term loan, with a weighted average interest rate of **7.2%** as of June 30, 2025[48](index=48&type=chunk)[49](index=49&type=chunk)[52](index=52&type=chunk) - The company was in compliance with all Credit Facility covenants as of June 30, 2025, including a maximum leverage ratio of **4.0 to 1.0** and a minimum fixed charge coverage ratio of **1.25 to 1.0**[50](index=50&type=chunk) - As of June 30, 2025, **$14,000 thousand** was outstanding under the Revolver, with **$111,000 thousand** available for borrowing, and the Term Loan had a net carrying amount of **$65,533 thousand**[51](index=51&type=chunk)[53](index=53&type=chunk) - Convertible Notes with an aggregate principal of **$97,500 thousand** remained outstanding as of June 30, 2025, maturing on August 15, 2025, and were classified as a current liability[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [Note 7. Stockholders' Equity](index=17&type=section&id=Note%207.%20Stockholders'%20Equity) Stock Awards | Stock Award Type | Outstanding as of March 31, 2025 (Shares) | Awards Granted (Shares) | Awards Distributed (Shares) | Outstanding as of June 30, 2025 (Shares) | | :--------------------------- | :---------------------------------------- | :---------------------- | :-------------------------- | :--------------------------------------- | | Time-Based Restricted Stock Units | 145 | 90 | (53) | 180 | | Performance-Based Restricted Stock Units | 85 | 44 | (4) | 125 | - RSUs granted in Q1 FY2026 vest in equal installments over three years (June 2026, 2027, 2028), while PSUs granted (FY26 PSUs) have a grant date fair value of **$99.56** per unit and are subject to service and market-based performance conditions over a period from June 15, 2025, to June 15, 2028[62](index=62&type=chunk)[64](index=64&type=chunk) - As of June 30, 2025, there were **134 shares** subject to options outstanding, with a weighted average exercise price of **$190.87** and a remaining contractual life of **2.8 years**[65](index=65&type=chunk) [Note 8. Earnings Per Share](index=18&type=section&id=Note%208.%20Earnings%20Per%20Share) EPS Metrics | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Basic earnings per share | $0.87 | $0.63 | | Diluted earnings per share | $0.85 | $0.62 | | Weighted average outstanding shares (Basic) | 5,465 | 5,397 | | Fully diluted shares | 5,553 | 5,424 | - Potentially dilutive securities, including **344 shares** from assumed conversion of Notes and **161 anti-dilutive stock awards**, were excluded from diluted EPS calculation for Q1 FY2026[67](index=67&type=chunk) [Note 9. Income Taxes](index=19&type=section&id=Note%209.%20Income%20Taxes) Income Tax Metrics | Income Tax Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | | Income tax expense | $2,270 | $517 | | Effective tax rate | 32.4% | 13.2% | - The effective tax rate increased significantly to **32.4%** in Q1 FY2026 from **13.2%** in Q1 FY2025, primarily due to prior year valuation allowance adjustments related to German operations and an increase in German statutory taxes[69](index=69&type=chunk)[70](index=70&type=chunk) - The company is evaluating the impact of updated regulations from the Tax Cuts and Jobs Act, which made **100% bonus depreciation**, expensing of domestic research costs, and business interest expense deduction limitations permanent, on its financial statements starting in Q2 FY2026[71](index=71&type=chunk) [Note 10. Commitments and Contingencies](index=19&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) - As of June 30, 2025, Mesa Laboratories, Inc. is not party to any legal proceeding that management believes could have a material adverse effect on its financial position, results of operations, or cash flows[72](index=72&type=chunk) [Note 11. Segment Information](index=20&type=section&id=Note%2011.%20Segment%20Information) - The company's four reportable segments are Sterilization and Disinfection Control, Biopharmaceutical Development, Calibration Solutions, and Clinical Genomics, managed by the CEO based on segment revenues, organic revenues growth, and gross profit[73](index=73&type=chunk) Segment Revenues and Gross Profit | Segment | Q1 FY2026 Revenues (in thousands) | Q1 FY2025 Revenues (in thousands) | Q1 FY2026 Gross Profit (in thousands) | Q1 FY2025 Gross Profit (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------------ | :------------------------------------ | | Sterilization and Disinfection Control | $25,410 | $22,957 | $18,166 | $15,558 | | Biopharmaceutical Development | $11,486 | $12,008 | $6,306 | $7,959 | | Calibration Solutions | $12,350 | $11,801 | $7,042 | $7,242 | | Clinical Genomics | $10,297 | $11,404 | $5,425 | $6,490 | | Total | $59,543 | $58,170 | $36,939 | $37,249 | Segment Inventories | Segment Inventories | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :-------------------------------- | :--------------------------- | :---------------------------- | | Sterilization and Disinfection Control | $6,269 | $5,545 | | Biopharmaceutical Development | $5,944 | $4,934 | | Calibration Solutions | $5,887 | $5,110 | | Clinical Genomics | $10,006 | $9,776 | | Total inventories | $28,106 | $25,365 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three months ended June 30, 2025, covering overall performance, strategy, market trends, segment results, expenses, non-operating items, taxes, liquidity, capital, dividends, goodwill, cash flows, and critical accounting estimates [Overview](index=22&type=section&id=Overview) - Mesa Laboratories is a global leader in life sciences tools and quality control solutions for regulated applications in pharmaceutical, healthcare, and medical device industries, operating through four reportable segments[79](index=79&type=chunk)[80](index=80&type=chunk) [Corporate Strategy](index=23&type=section&id=Corporate%20Strategy) - The company's corporate strategy focuses on creating stakeholder value by growing organically and through acquisitions, improving operating efficiency using the 'Mesa Way' (a lean-based system for continuous improvement), and hiring, developing, and retaining top talent[82](index=82&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[88](index=88&type=chunk) - Organic revenue growth is driven by customer base expansion, increased sales volumes, new product offerings, and price increases, while acquisitions expand product offerings, industries served, and global scale[83](index=83&type=chunk)[84](index=84&type=chunk) - Efficiency improvements are pursued in manufacturing, commercial, engineering, and administrative operations, including process automation and artificial intelligence[85](index=85&type=chunk)[87](index=87&type=chunk) [General Trends](index=24&type=section&id=General%20Trends) - Approximately **54%** of revenues were earned outside the United States in Q1 FY2026, highlighting global operations and exposure to varied economic environments, regulatory changes, and foreign currency fluctuations[90](index=90&type=chunk) - Revenues increased **2.4%** year-over-year in Q1 FY2026, driven by organic growth in Sterilization and Disinfection Control and Calibration Solutions, partially offset by declines in Clinical Genomics and Biopharmaceutical Development[91](index=91&type=chunk) - Gross profit as a percentage of revenues decreased by **2.0 percentage points** to **62.0%** in Q1 FY2026, and operating expenses increased by **7.0%**, influenced by the weakening U.S. dollar, tariffs, and inflationary pressures[92](index=92&type=chunk) - Tariffs, particularly between the U.S. and China, and international policy changes have created uncertainty, contributing to delays in customer purchasing decisions, especially impacting Biopharmaceutical Development and Clinical Genomics[93](index=93&type=chunk)[94](index=94&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) | Metric | Q1 FY2026 (in thousands) | Q1 FY2025 (in thousands) | Total Change | | :------------------------ | :----------------------- | :----------------------- | :----------- | | Revenues | $59,543 | $58,170 | +2.4% | | Gross profit | $36,939 | $37,249 | -0.8% | | Operating expense | $33,875 | $31,669 | +7.0% | | Operating income | $3,064 | $5,580 | -45.1% | | Net income | $4,742 | $3,388 | +40.0% | [Reportable Segments](index=25&type=section&id=Reportable%20Segments) | Segment | Q1 FY2026 Revenues | Q1 FY2025 Revenues | Organic Revenues Growth (Q1 FY2026) | Gross Profit % (Q1 FY2026) | Gross Profit % (Q1 FY2025) | | :-------------------------------- | :----------------- | :----------------- | :---------------------------------- | :------------------------- | :------------------------- | | Sterilization and Disinfection Control | $25,410 | $22,957 | 10.7% | 71.5% | 67.8% | | Biopharmaceutical Development | $11,486 | $12,008 | (4.3%) | 54.9% | 66.3% | | Calibration Solutions | $12,350 | $11,801 | 4.7% | 57.0% | 61.4% | | Clinical Genomics | $10,297 | $11,404 | (9.7%) | 52.7% | 56.9% | | Total | $59,543 | $58,170 | 2.4% | 62.0% | 64.0% | - Sterilization and Disinfection Control revenues increased **10.7%** due to strong commercial execution, increased sales volumes, order fulfillment from backlog, and favorable euro exchange rates, with gross profit percentage increasing by **3.7 points**[101](index=101&type=chunk)[102](index=102&type=chunk) - Biopharmaceutical Development revenues decreased **4.3%** due to timing of immunoassays orders and macroeconomic/tariff uncertainty, leading to an **11.4 percentage point** drop in gross profit margin due to unfavorable product mix (lower-margin peptides) and Swedish krona appreciation[104](index=104&type=chunk)[105](index=105&type=chunk) - Calibration Solutions revenues increased **4.7%** driven by contract renewals and price increases, but gross profit percentage decreased by **4.4 points** due to increased labor costs, manufacturing input costs (tariffs), and product mix[107](index=107&type=chunk)[108](index=108&type=chunk) - Clinical Genomics revenues decreased **9.7%** primarily due to lower sales in China amid macroeconomic, regulatory, and tariff uncertainty, despite an **18.6%** increase in U.S. revenues, resulting in a **4.2 percentage point** decrease in gross profit margin[110](index=110&type=chunk)[111](index=111&type=chunk) [Operating Expense](index=28&type=section&id=Operating%20Expense) - Total operating expense increased **7.0%** for Q1 FY2026 compared to the prior year, influenced by the weakening U.S. dollar against the euro and Swedish krona[113](index=113&type=chunk) Operating Expense Categories | Operating Expense Category | Q1 FY2026 (in thousands) | Q1 FY2025 (in thousands) | Total Change | | :--------------------------- | :----------------------- | :----------------------- | :----------- | | Selling expense | $10,933 | $10,116 | +8.1% | | General and administrative | $17,958 | $16,818 | +6.8% | | Research and development | $4,984 | $4,735 | +5.3% | - Selling expense increased **8.1%** due to investments in additional personnel for organic growth, General and administrative expense rose **6.8%** primarily from higher personnel costs and increased non-cash stock-based compensation, partially offset by lower consulting fees, and R&D expenses increased slightly by **5.3%** due to purchases of supplies for project-specific activities[115](index=115&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk) [Non-Operating (Income) Expense, Net](index=29&type=section&id=Non-Operating%20(Income)%20Expense,%20Net) Non-Operating Items | Non-Operating Item | Q1 FY2026 (in thousands) | Q1 FY2025 (in thousands) | Total Change | | :---------------------------------------- | :----------------------- | :----------------------- | :----------- | | Interest expense and amortization of debt issuance costs | $2,198 | $2,842 | (22.7%) | | (Gain) on extinguishment of convertible senior notes | $0 | $(2,887) | N/A | | Other (income) expense, net | $(6,146) | $1,720 | (457.3%) | | Non-operating (income) expense, net | $(3,948) | $1,675 | (335.7%) | - Non-operating income swung from an expense of **$1,675 thousand** in Q1 FY2025 to an income of **$(3,948) thousand** in Q1 FY2026, primarily due to unrealized foreign currency gains of approximately **$6.1 million** from an intercompany loan as the U.S. dollar weakened against the euro[121](index=121&type=chunk) - Interest expense decreased by **22.7%** due to lower outstanding balances on the revolving line of credit and lower interest rates on floating rate debt, but is expected to increase in future quarters as convertible notes mature and are replaced by higher-rate revolver borrowings[122](index=122&type=chunk) [Income Taxes](index=29&type=section&id=Income%20Taxes) Income Tax Metrics | Income Tax Metric | Q1 FY2026 | Q1 FY2025 | Total Change | | :------------------ | :-------- | :-------- | :----------- | | Income tax expense | $2,270 | $517 | +339.1% | | Effective tax rate | 32.4% | 13.2% | +19.2 pt | - The effective income tax rate increased to **32.4%** from **13.2%** year-over-year, mainly due to prior year valuation allowance adjustments related to German operations and an increase in German statutory taxes in the current fiscal year[124](index=124&type=chunk) [Net Income](index=29&type=section&id=Net%20Income) - Net income for Q1 FY2026 was **$4,742 thousand**, influenced by **$4.6 million** in non-cash amortization of intangible assets, **$3.9 million** in stock-based compensation expense, **$1.4 million** in depreciation expense, and **$6.2 million** in currency gains[126](index=126&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) - The company's liquidity sources include cash from operations, cash and cash equivalents on hand (**$21.3 million** as of June 30, 2025), and available borrowings under its Credit Facility (**$111.0 million** available on the Revolver as of June 30, 2025)[128](index=128&type=chunk)[130](index=130&type=chunk)[132](index=132&type=chunk) - The company had negative working capital of **$(51.2) million** as of June 30, 2025, primarily due to the classification of **$97.5 million** in convertible notes as a current liability, which mature in August 2025[130](index=130&type=chunk) - Principal debt payments due within the next twelve months total **$101.7 million**, which the company plans to fund using cash on hand, Revolver draws, and operating cash flows[132](index=132&type=chunk) - The company expects to incur approximately **$12.3 million** in cash interest expense over the next twelve months, adjusted for scheduled principal payments and anticipated borrowings[133](index=133&type=chunk) [Dividends](index=30&type=section&id=Dividends) - Mesa Laboratories has paid regular quarterly dividends since 2003, with **$0.16 per share** paid during Q1 FY2026 and a similar dividend declared for September 15, 2025[136](index=136&type=chunk) [Goodwill Impairment Testing](index=30&type=section&id=Goodwill%20Impairment%20Testing) - As of June 30, 2025, the company concluded that its five goodwill reporting units (Sterilization and Disinfection Control, Immunoassays (BPD), Peptides (BPD), Calibration Solutions, and Clinical Genomics) were not impaired[137](index=137&type=chunk) - The Clinical Genomics and Peptides reporting units remain sensitive to significant changes in assumptions and have a heightened risk of future impairment losses, with estimated fair values exceeding carrying values by approximately **40%** and **20%**, respectively, as of January 1, 2025[138](index=138&type=chunk)[139](index=139&type=chunk) - The carrying values of goodwill and other intangible assets for Clinical Genomics were **$17.1 million** and **$8.9 million**, respectively, and for Peptides were **$13.7 million** and **$0.8 million**, respectively, as of June 30, 2025[139](index=139&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) Cash Flow Activities | Cash Flow Activity | Q1 FY2026 (in thousands) | Q1 FY2025 (in thousands) | | :-------------------------------- | :----------------------- | :----------------------- | | Net cash provided by operating activities | $1,893 | $10,743 | | Net cash (used in) investing activities | $(1,009) | $(891) | | Net cash (used in) financing activities | $(8,427) | $(9,419) | - The **$8.8 million** decrease in operating cash flows was primarily due to lower gross margins, higher cash payments for accrued bonuses and commissions, and increased inventory purchases as part of the tariff strategy[140](index=140&type=chunk)[144](index=144&type=chunk) - Cash used in financing activities decreased by **$992 thousand**, with **$10.5 million** borrowed under the Revolver largely to fund a **$9.6 million** GKE acquisition-related holdback payment, and **$7.4 million** in debt repayments[140](index=140&type=chunk) [Recent Accounting Pronouncements](index=31&type=section&id=Recent%20Accounting%20Pronouncements) - For a discussion of new accounting standards impacting the Company, refer to Note 1. 'Description of Business and Summary of Significant Accounting Policies' in Item I. Financial Statements (Unaudited)[141](index=141&type=chunk) [Contractual Obligations and Other Commercial Commitments](index=31&type=section&id=Contractual%20Obligations%20and%20Other%20Commercial%20Commitments) - As of June 30, 2025, the company had contractual obligations for open purchase orders of approximately **$14.2 million**, with the substantial majority payable within one year[142](index=142&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates, such as those used in goodwill impairment testing, involve complex, subjective assessments and assumptions about uncertain matters, which are discussed in the Annual Report on Form 10-K[145](index=145&type=chunk) [Non-GAAP Measures](index=32&type=section&id=Non-GAAP%20Measures) - The company uses organic revenues growth, a non-GAAP measure defined as reported revenues growth excluding revenues from recent acquisitions, to facilitate comparability and provide insight into performance and growth trends[146](index=146&type=chunk) Organic Revenues Growth (non-GAAP) | Segment | Total Revenues Growth (Q1 FY2026) | Impact of Acquisitions (Q1 FY2026) | Organic Revenues Growth (non-GAAP) (Q1 FY2026) | | :-------------------------------- | :-------------------------------- | :--------------------------------- | :--------------------------------------------- | | Sterilization and Disinfection Control | 10.7% | -% | 10.7% | | Biopharmaceutical Development | (4.3%) | -% | (4.3%) | | Calibration Solutions | 4.7% | -% | 4.7% | | Clinical Genomics | (9.7%) | -% | (9.7%) | | Total Company | 2.4% | -% | 2.4% | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the company's Annual Report on Form 10-K for detailed information on market risk exposure, noting no material changes during the three months ended June 30, 2025 - There were no material changes to the company's market risk exposure during the three months ended June 30, 2025, as detailed in the Annual Report on Form 10-K[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the company's disclosure controls and procedures, confirming their effectiveness as of June 30, 2025, and stating no material changes to internal control over financial reporting during the period [Evaluation of Disclosure Controls and Procedures](index=32&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[150](index=150&type=chunk) [Changes in Internal Control Over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - There were no changes to the company's internal control over financial reporting during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect it[151](index=151&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 10 of the financial statements for information regarding legal proceedings, indicating no material adverse effects on the company's financial position - For information regarding legal proceedings, refer to Note 10. 'Commitments and Contingencies' within Item 1. Financial Statements[153](index=153&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section states that there were no material changes to the risk factors previously described in the company's Annual Report on Form 10-K - No material changes occurred to the risk factors described in Part I, Item 1A. Risk Factors of the Annual Report on Form 10-K for the year ended March 31, 2025, during the three months ended June 30, 2025[154](index=154&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the company's purchases of equity securities, primarily related to tax withholding obligations on restricted stock awards, and notes no purchases under its share repurchase plan Shares Purchased | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--------- | :------------------------------- | :--------------------------- | | April 2025 | 2 | $124.64 | | May 2025 | - | - | | June 2025 | 11,313 | $93.71 | | Total | 11,315 | $93.72 | - Shares purchased during the period were transferred from employees to satisfy minimum tax withholding obligations associated with the vesting of restricted stock awards[155](index=155&type=chunk) - No shares were purchased under the company's publicly announced share repurchase plan, which allows for the repurchase of up to **300,000 common shares**[155](index=155&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section confirms that no directors or officers entered into new or amended Rule 10b5-1(c) plans for securities transactions during the reporting period - No directors or officers entered into new or amended written plans for the purchase or sale of securities intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) during the three months ended June 30, 2025[156](index=156&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including articles of incorporation, bylaws, restricted stock unit agreements, executive employment agreement amendments, certifications, and XBRL documents - The exhibits include corporate governance documents (Amended and Restated Articles of Incorporation, Bylaws), equity incentive plan agreements (Restricted Stock Unit Agreement, Performance Stock Unit Agreement), executive employment agreement amendments, certifications (Sarbanes-Oxley Act Sections 302 and 906), and XBRL interactive data files[160](index=160&type=chunk) [Signatures](index=35&type=section&id=Signatures) This section contains the official signatures of Mesa Laboratories, Inc.'s Chief Executive Officer and Chief Financial Officer, certifying the filing of the report - The report is duly signed by Gary M. Owens, Chief Executive Officer, and John V. Sakys, Chief Financial Officer, on August 5, 2025[162](index=162&type=chunk)

[First Quarter FY26 Earnings Announcement](index=1&type=section&id=First%20Quarter%20FY26%20Earnings%20Announcement) Mesa Laboratories reported a 2.4% revenue increase and 0.4% core organic growth in 1Q26, with operating income decreasing but net income rising [Overview and Key Highlights](index=1&type=section&id=Overview%20and%20Key%20Highlights) Mesa Labs reported 1Q26 revenues up 2.4% and core organic growth of 0.4%, with a significant operating income decrease but net income increase Key Financial Highlights (1Q26 vs 1Q25) | Metric | 1Q26 (Thousands) | Change vs 1Q25 | Percentage of Revenues | Source Chunks | | :----------------------------------- | :----------------- | :--------------- | :--------------------- | :------------ | | Revenues | $59,543 | +2.4% | - | [8, 9] | | Non-GAAP core organic revenues growth | - | +0.4% | - | [8, 9] | | Operating income | $3,064 | -45.1% | - | [8, 9] | | Non-GAAP adjusted operating income (AOI) excluding unusual items | $12,902 | -15.9% | 21.7% | [8, 9] | [Executive Commentary](index=1&type=section&id=Executive%20Commentary) CEO Gary Owens discussed 2.4% organic revenue growth, BPD revenue shifts, CG China contraction, and a decline in AOI profitability to 21.7% due to various factors - BPD experienced approximately **$1.5M** of expected 1Q26 revenues shifting into 2Q26 due to final tariff surcharge negotiations, but the company expects to meet first-half revenue goals[4](index=4&type=chunk) - SDC and CG (excluding China) showed strong growth of **7.9%**, overcoming a **$1.8M (69%) contraction** in CG China revenues[4](index=4&type=chunk) - Profitability (AOI excluding unusual items as a percentage of revenues) was **21.7%** in 1Q26, down from **26.4%** in 1Q25 and **23.5%** for FY25, primarily due to FX, strategically prioritized low-margin BPD shipments to China, and increased operating expenses[5](index=5&type=chunk) - The 'Mesa Way' operating model, specifically Breakthrough 7, focused on accelerating New Product Development, improving Product Launches, spreading best practices for Customer Prospecting, and Manufacturing Scrap Reduction within the Clinical Genomics division[6](index=6&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Mesa Labs' 1Q26 consolidated results show a 2.4% revenue increase, significant GAAP operating income decrease, and a 40% net income rise [Summary of Financial Performance](index=2&type=section&id=Summary%20of%20Financial%20Performance) Mesa Labs reported 1Q26 total revenues of $59.54 million, a 2.4% increase, with GAAP operating income down but net income up 40% Consolidated Financial Performance (1Q26 vs 1Q25) | Metric | 1Q26 (Thousands) | 1Q25 (Thousands) | YoY Change | Source Chunks | | :----------------------------------- | :----------------- | :----------------- | :--------- | :------------ | | Total Revenues | $59,543 | $58,170 | +2.4% | [9, 22] | | Operating Income (GAAP) | $3,064 | $5,580 | -45.1% | [9, 22] | | Net Income (GAAP) | $4,742 | $3,388 | +40.0% | [9, 22] | | Diluted EPS (GAAP) | $0.85 | $0.62 | +37.1% | [9, 22] | | Core Organic Revenues Growth (Non-GAAP) | - | - | +0.4% | [9] | | AOI (Non-GAAP) | $12,902 | $13,973 | -7.7% | [9, 26] | | AOI excluding unusual items (Non-GAAP) | $12,902 | $15,341 | -15.9% | [9, 26] | | Total Net Leverage Ratio (as of June 30, 2025) | 3.16 | - | - | [9] | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Consolidated statements show increased revenues but decreased gross profit and operating income, with net income rising due to nonoperating income Condensed Consolidated Statements of Operations (Three Months Ended June 30) | (Amounts in thousands, except per share data) | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Revenues | $59,543 | $58,170 | | Cost of revenues | 22,604 | 20,921 | | Gross profit | 36,939 | 37,249 | | Operating expenses | 33,875 | 31,669 | | Operating income | 3,064 | 5,580 | | Nonoperating (income) expense | (3,948) | 1,675 | | Earnings before income taxes | 7,012 | 3,905 | | Income tax expense | 2,270 | 517 | | Net income | $4,742 | $3,388 | | Earnings per share (basic) | $0.87 | $0.63 | | Earnings per share (diluted) | $0.85 | $0.62 | | Weighted average common shares outstanding (Basic) | 5,465 | 5,397 | | Weighted average common shares outstanding (Diluted) | 5,553 | 5,424 | [Consolidated Condensed Balance Sheets](index=4&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Balance sheets indicate a slight increase in total assets and stockholders' equity, alongside a decrease in total liabilities Consolidated Condensed Balance Sheets | (Amounts in thousands) | June 30, 2025 | March 31, 2025 | | :--------------------- | :------------ | :------------- | | Cash and cash equivalents | $21,279 | $27,321 | | Other current assets | 76,979 | 75,364 | | Total current assets | 98,258 | 102,685 | | Noncurrent assets | 337,485 | 330,663 | | Total assets | $435,743 | $433,348 | | Liabilities | $263,247 | $273,518 | | Stockholders' equity | 172,496 | 159,830 | | Total liabilities and stockholders' equity | $435,743 | $433,348 | [Division Performance Analysis](index=2&type=section&id=Division%20Performance%20Analysis) This section analyzes the performance of SDC, BPD, CS, and CG divisions, detailing revenue growth and profitability drivers [Sterilization and Disinfection Control (SDC)](index=2&type=section&id=Sterilization%20and%20Disinfection%20Control%20(SDC)) SDC division achieved 7.5% core organic revenue growth, driven by strong commercial execution and improved manufacturing productivity SDC Division Performance | Metric | 1Q26 (Thousands) | Core Organic Revenues Growth | Gross Profit % Change (YoY) | Source Chunks | | :------- | :----------------- | :--------------------------- | :-------------------------- | :------------ | | Revenues | $25,410 | 7.5% | +370 bps | [10] | - Growth was driven by strong commercial execution leading to orders growth greater than revenues growth and a reduction in past-due backlog[10](index=10&type=chunk) - Gross profit percentage increase was primarily due to a **340 bps benefit** from non-cash inventory step-up charges in 1Q25[10](index=10&type=chunk) [Biopharmaceutical Development (BPD)](index=2&type=section&id=Biopharmaceutical%20Development%20(BPD)) BPD division saw a 7.0% core organic revenue decline due to order timing and shipping delays, impacting gross profit percentage BPD Division Performance | Metric | 1Q26 (Thousands) | Core Organic Revenues Growth | Gross Profit % Change (YoY) | Source Chunks | | :------- | :----------------- | :--------------------------- | :-------------------------- | :------------ | | Revenues | $11,486 | (7.0)% | -1,140 bps | [11] | - The decline was driven by timing of order placements and shipping delays; without these, revenues would have shown approximately **8.0% positive growth**[11](index=11&type=chunk) - Gross profit percentage contraction was primarily due to unfavorable product mix, delayed volumes, and FX, with SEK appreciating **12.4% vs. USD**[11](index=11&type=chunk) [Calibration Solutions (CS)](index=2&type=section&id=Calibration%20Solutions%20(CS)) CS division achieved 4.8% core organic revenue growth from commercial execution and price increases, despite gross profit percentage decline CS Division Performance | Metric | 1Q26 (Thousands) | Core Organic Revenues Growth | Gross Profit % Change (YoY) | Source Chunks | | :------- | :----------------- | :--------------------------- | :-------------------------- | :------------ | | Revenues | $12,350 | 4.8% | -440 bps | [12] | - Revenues growth was driven by strong commercial execution in renal care and price increases[12](index=12&type=chunk) - Gross profit percentage decreased due to raw material price headwinds (tariffs), increased labor costs, and product mix[12](index=12&type=chunk) [Clinical Genomics (CG)](index=2&type=section&id=Clinical%20Genomics%20(CG)) CG division experienced a 10.7% core organic revenue decline, primarily from a 69% contraction in China, partially offset by growth outside China CG Division Performance | Metric | 1Q26 (Thousands) | Core Organic Revenues Growth | Gross Profit % Change (YoY) | Source Chunks | | :------- | :----------------- | :--------------------------- | :-------------------------- | :------------ | | Revenues | $10,297 | (10.7)% | -420 bps | [13] | - China revenues contracted by approximately **$1.8M (69%)** compared to the prior year, representing **8% of total division revenues** for 1Q26 (down from 19% for FY25)[13](index=13&type=chunk) - Growth outside of China was **7.9%**, primarily from consumables, driven by new product development and commercial strategy[13](index=13&type=chunk) [Non-GAAP Financial Measures and Supplemental Information](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Supplemental%20Information) This section defines and reconciles Mesa Labs' non-GAAP financial measures, including AOI and organic revenues growth, to GAAP [Use and Definition of Non-GAAP Measures](index=3&type=section&id=Use%20and%20Definition%20of%20Non-GAAP%20Measures) Mesa Labs uses non-GAAP measures like AOI and organic revenues growth to provide supplemental operational performance insights, excluding non-cash or non-recurring items - Non-GAAP measures are used to provide meaningful supplemental information regarding operational performance, helping investors understand operating results consistent with management's internal measurements[28](index=28&type=chunk) - Organic revenues growth excludes the impact of acquisitions, and core organic revenues growth further excludes currency translation[14](index=14&type=chunk) - Adjusted operating income (AOI) excludes non-cash impacts of amortization of intangible assets, stock-based compensation, depreciation, and impairment of goodwill and long-lived assets. AOI excluding unusual items further removes non-ongoing, specific transaction-related items[15](index=15&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk) - Total Net Leverage Ratio is defined as total debt minus unrestricted cash (in excess of **$10M**) compared to 12 months trailing EBITDA, where EBITDA is a non-GAAP metric adjusted for interest, taxes, depreciation, amortization, unusual charges, and stock compensation[16](index=16&type=chunk) [Reconciliation of Non-GAAP Measures](index=5&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section reconciles GAAP financial measures to non-GAAP AOI and organic/core organic revenues growth, detailing adjustments for non-cash and unusual items [GAAP Operating Income to Non-GAAP Adjusted Operating Income (AOI)](index=5&type=section&id=GAAP%20Operating%20Income%20to%20Non-GAAP%20Adjusted%20Operating%20Income%20(AOI)) This table reconciles GAAP operating income to non-GAAP AOI, detailing adjustments for amortization, stock-based compensation, and depreciation Reconciliation of GAAP Operating Income to Non-GAAP AOI | (Amounts in thousands, except per share data) | June 30, 2025 | June 30, 2024 | | :-------------------------------------------- | :------------ | :------------ | | Operating income (GAAP) | $3,064 | $5,580 | | Amortization of intangible assets | 4,553 | 4,061 | | Stock-based compensation expense | 3,881 | 2,928 | | Depreciation expense | 1,404 | 1,404 | | AOI (non-GAAP) | $12,902 | $13,973 | | Unusual items – before tax: | | | | Non-cash GKE inventory step-up | -- | 778 | | GKE integration costs | -- | 590 | | Total impact of unusual items on AOI – before tax | -- | $1,368 | | AOI excluding unusual items (non-GAAP) | $12,902 | $15,341 | | AOI per share - diluted (non-GAAP) | $2.32 | $2.58 | | AOI excluding unusual items per share – diluted (non-GAAP) | $2.32 | $2.83 | [Organic and Core Organic Revenues Growth](index=5&type=section&id=Organic%20and%20Core%20Organic%20Revenues%20Growth) This table reconciles total revenues growth to organic and core organic revenues growth, showing acquisition and currency translation impacts Organic and Core Organic Revenues Growth Reconciliation | Metric | Three Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | | Total revenues growth | 2.4% | | Impact of acquisitions | --% | | Organic revenues growth (non-GAAP) | 2.4% | | Currency translation | (2.0)% | | Core organic revenues growth (non-GAAP) | 0.4% | [Additional Company Information](index=3&type=section&id=Additional%20Company%20Information) This section provides company background, forward-looking statement disclaimers, and investor contact information [About Mesa Laboratories, Inc.](index=3&type=section&id=About%20Mesa%20Laboratories,%20Inc.) Mesa Labs is a global leader in life science tools and quality control solutions for pharmaceutical, healthcare, and medical device industries - Mesa is a global leader in life science tools and critical quality control solutions for regulated applications[17](index=17&type=chunk) - The company serves the pharmaceutical, healthcare, and medical device industries[17](index=17&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking statements, subject to risks including acquisitions, market acceptance, economic conditions, and currency fluctuations - Statements regarding future financial results, business conditions, and strategic initiatives are forward-looking and subject to risks and uncertainties[19](index=19&type=chunk) - Risks include successful business growth, acquisition integration, market acceptance, global economy, U.S. trade policies, product development, and foreign currency fluctuations[19](index=19&type=chunk) - The company assumes no obligation to update the information in the press release[19](index=19&type=chunk) [Mesa Laboratories Contacts](index=3&type=section&id=Mesa%20Laboratories%20Contacts) Investor relations contact information for Mesa Laboratories, including key personnel and contact details, is provided - Investor contacts: Gary Owens (President and CEO), John Sakys (CFO)[20](index=20&type=chunk) - Contact details: **1-303-987-8000**, investors@mesalabs.com[20](index=20&type=chunk)

Company Overview - Mesa Laboratories, Inc. is a global leader in the design and manufacture of life science tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries [2] - The company offers products and services aimed at ensuring product integrity, increasing patient and worker safety, and improving the quality of life globally [2] Financial Information - Mesa Laboratories, Inc. will release its financial results for the first quarter of fiscal year 2026 on August 5, 2025, at approximately 8:00 A.M. Eastern time [1]

Core Viewpoint - Mesa Labs reported quarterly earnings of $2.23 per share, missing the Zacks Consensus Estimate of $2.75 per share, and down from $2.77 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -18.91%, with the company previously expected to post earnings of $2.45 per share but actually reporting $2.67 per share in the prior quarter, resulting in a positive surprise of 8.98% [2] - Revenues for the quarter were $62.14 million, missing the Zacks Consensus Estimate by 1.53%, compared to $58.9 million in the same quarter last year [3] - Over the last four quarters, Mesa Labs has surpassed consensus revenue estimates two times [3] Stock Performance - Mesa Labs shares have declined approximately 14.2% since the beginning of the year, while the S&P 500 has gained 0.7% [4] - The current Zacks Rank for Mesa Labs is 3 (Hold), indicating expected performance in line with the market in the near future [7] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.80 on revenues of $61.3 million, and for the current fiscal year, it is $11.35 on revenues of $255.3 million [8] - The trend of estimate revisions for Mesa Labs is mixed, which may change following the recent earnings report [7] Industry Context - The Medical - Instruments industry, to which Mesa Labs belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [9]

Employee and Workforce Management - As of March 31, 2025, the company had 730 employees, with a voluntary employee turnover decrease of approximately 2.0 percentage points compared to the previous fiscal year, indicating improved employee satisfaction [71] - The company has implemented various health and wellness programs to enhance the physical and mental well-being of employees globally [76] - The company maintains a commitment to an inclusive workforce, aiming to reflect the communities in which it operates [73] - The company has invested heavily in talent acquisition and development processes, including standardized assessment processes and mentoring systems [72] - The company’s compensation package includes market-competitive pay, cash bonuses, stock-based compensation, and comprehensive benefits aimed at attracting and retaining talent [75] Financial Performance - Total revenues for the year ended March 31, 2025, were $240,978 thousand, an increase of 11.5% compared to $216,187 thousand in 2024 [302] - Gross profit for the year ended March 31, 2025, was $150,870 thousand, representing a gross margin of 62.6% [302] - Operating income for the year ended March 31, 2025, was $16,336 thousand, a significant recovery from an operating loss of $272,075 thousand in 2024 [302] - Net loss for the year ended March 31, 2025, was $(1,974) thousand, compared to a net loss of $(254,246) thousand in 2024 [304] - The company reported a comprehensive income of $3,006 thousand for the year ended March 31, 2025, compared to a comprehensive loss of $(256,206) thousand in 2024 [304] Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2025, were $27,321 thousand, a decrease from $28,214 thousand in 2024 [300] - Cash provided by operating activities increased to $46,808 thousand in 2025, compared to $44,133 thousand in 2024, reflecting a positive trend in operational efficiency [310] - Net cash used in investing activities was $4,499 thousand in 2025, a decrease from $81,306 thousand in 2024, suggesting improved investment management [310] - Proceeds from credit facility borrowings amounted to $73,465 thousand in 2025, compared to $71,000 thousand in 2024, indicating increased financing activity [310] Assets and Liabilities - Total assets as of March 31, 2025, were $433,348 thousand, down from $446,796 thousand in 2024 [300] - Total liabilities as of March 31, 2025, were $273,518 thousand, a decrease from $301,403 thousand in 2024 [300] - Stockholders' equity increased to $159,830 thousand as of March 31, 2025, from $145,393 thousand in 2024 [300] Research and Development - Research and development expenses for the year ended March 31, 2025, were $19,518 thousand, slightly up from $19,300 thousand in 2024 [302] - Research and development expenses are primarily composed of labor and third-party consultant costs, with costs expensed as incurred [348] Acquisitions and Goodwill - The company did not acquire any businesses in fiscal year 2025, while it acquired businesses for total net purchase prices of $87,187 million in 2024 and $6,140 million in 2023 [367] - Goodwill related to the GKE acquisition amounted to $48,850 as of March 31, 2024 [404] - The estimated fair value of consideration held back from the GKE acquisition was approximately $9,300 as of March 31, 2025 [391] Taxation - The total income tax expense for the year ended March 31, 2025, was $7,935,000, compared to a benefit of $(21,402,000) for 2024 [437] - The effective income tax rate for 2025 was 133.12%, compared to 7.76% in 2024, indicating a substantial increase in tax expense [438] - Deferred tax assets, net, decreased from $15,718 million in 2024 to $12,739 million in 2025, primarily due to an increase in the valuation allowance [439] Inventory and Cost Management - Total inventories decreased from $32,675 in March 31, 2024 to $25,365 in March 31, 2025, a reduction of approximately 22% [407] - The company maintains an inventory reserve for excess or obsolete inventory, which may fluctuate based on new information or changes in business conditions [335] Segment Performance - The company operates in four reportable segments, focusing on life sciences tools and quality control solutions for regulated applications in the pharmaceutical and healthcare industries [311] - The Sterilization and Disinfection Control segment generated revenues of $93,418 million in 2025, up from $75,124 million in 2024, marking a 24.3% increase [449] - Clinical Genomics revenues increased to $47,081 million in 2025 from $52,588 million in 2024, indicating a decline of 10.6% [449] Debt Management - The company repurchased convertible senior notes totaling $71,560 thousand in 2025, reflecting a strategic move to manage debt [310] - The outstanding balance under the Revolver as of March 31, 2025 was $10,000, with $115,000 available for borrowing [415] - The weighted average interest rate on borrowings under the Credit Facility was 7.2% as of March 31, 2025 [410]