Mesa Laboratories (NasdaqGS:MLAB) 2025 Conference November 20, 2025 07:00 AM ET Company ParticipantsJohn Sakys - CFOGary Owens - CEOConference Call ParticipantsNone - AnalystGary OwensWhich will be highly attractive. Biopharmaceutical development did 17% growth in the quarter. This is where we do protein analytics to support clinical trials and is essentially an engineering tool for bioprocessing design. That was probably a little bit inflated in the quarter. The 6.4% we have done for the full year is proba ...

LAKEWOOD, Colo., Nov. 12, 2025 (GLOBE NEWSWIRE) -- Mesa Laboratories, Inc. (NASDAQ:MLAB) today announced that Gary Owens, President and CEO, and John Sakys, CFO will be attending the following upcoming conferences: Raymond James Napa Valley Small Cap SymposiumFormat: 1x1 Meetings Date: Monday, November 17, 2025Jefferies London Healthcare Conference Format: Fireside chatDate: Thursday, November 20, 2025Time: 12:00 p.m. GMTWebcast: Click Here 8th Annual Evercore Healthcare ConferenceFormat: Fireside chat Date ...

Revenue Performance - For the six months ended September 30, 2025, the company achieved revenue growth of 3.7% compared to the prior year, driven by the Calibration Solutions, Biopharmaceutical Development, and Sterilization and Disinfection Control divisions [94]. - The Clinical Genomics division experienced a revenue decline of 6.4% for the six months ended September 30, 2025, primarily due to trade tensions and unfavorable macroeconomic conditions in China [94]. - Revenues for the three months ended September 30, 2025, were $60,737,000, representing a 5.0% increase from $57,833,000 in the prior year [102]. - The Sterilization and Disinfection Control division reported revenues of $47.5 million for the six months ended September 30, 2025, with a gross profit margin of 69.5% [101]. - The Biopharmaceutical Development division generated revenues of $25.4 million for the same period, with a gross profit margin of 56.8% [101]. - The Calibration Solutions division achieved revenues of $25.9 million, reflecting a 7.7% organic revenue growth for the six months ended September 30, 2025 [101]. - The Sterilization and Disinfection Control division's revenues declined 0.4% for the three months ended September 30, 2025, primarily due to lower-than-expected order fulfillments [105]. - The Biopharmaceutical Development division's revenues increased 17.3% for the three months ended September 30, 2025, driven by higher sales of Peptides instruments [110]. - Revenues for the Calibration Solutions division increased 10.7% for the three months ended September 30, 2025, due to ongoing commercial efforts and price increases [114]. - Clinical Genomics division revenues declined 3.1% for the three months ended September 30, 2025, primarily due to lower sales to customers in China [118]. Operating Expenses and Profitability - Consolidated gross profit as a percentage of revenues decreased by 1.0 percentage point to 61.7% for the first half of fiscal year 2026, impacted by the weakening of the U.S. dollar and tariffs [95]. - Operating expenses increased by 4.5% for the six months ended September 30, 2025, largely due to higher personnel expenses and non-cash stock-based compensation [98]. - Operating expenses increased 2.1% for the three months ended September 30, 2025, influenced by the weakening of the U.S. dollar against the euro and Swedish krona [121]. - Selling expenses decreased 0.5% for the three months ended September 30, 2025, primarily due to lower personnel and training costs [123]. - General and administrative expenses increased 1.7% for the three months ended September 30, 2025, driven by higher estimated uncollectible accounts receivable in China [125]. - Gross profit as a percentage of revenues for the Biopharmaceutical Development division decreased 2.0 percentage points for the three months ended September 30, 2025, primarily due to tariffs and unfavorable product mix [112]. Cost Management and Future Outlook - The company expects to realize annualized cost reductions of approximately $2.3 million starting in the third quarter of fiscal year 2026, following headcount reductions and other cost-saving initiatives [97]. - Research and development expenses increased by 8.9% to $5.048 million for the three months ended September 30, 2025, and by 7.1% to $10.032 million for the six months ended September 30, 2025, compared to the prior year periods [128]. - Interest expense decreased by 5.2% to $2.862 million for the three months ended September 30, 2025, and by 13.7% to $5.060 million for the six months ended September 30, 2025, primarily due to lower interest rates and outstanding debt levels [129]. - The company expects to incur approximately $11.6 million in cash interest expense over the next twelve months [140]. Cash Flow and Working Capital - Net cash provided by operating activities was $10.115 million for the six months ended September 30, 2025, a decrease of $5.9 million compared to the prior year [148]. - Working capital improved to $49.1 million as of September 30, 2025, from negative working capital of $(61.3) million as of March 31, 2025, due to the settlement of $97.5 million in principal related to Notes [139]. - Cash used in investing activities decreased to $(2.101) million for the six months ended September 30, 2025, compared to $(2.679) million in the prior year [149]. Dividends and Shareholder Returns - The company paid dividends of $0.16 per share during the three months ended September 30, 2025, and announced a quarterly cash dividend of $0.16 per share payable on December 15, 2025 [142]. Market Risk and Global Operations - Approximately 53% of the company's revenues were earned outside the United States during the six months ended September 30, 2025, highlighting its global operations [93]. - There were no material changes to the company's market risk exposure during the three months ended September 30, 2025 [156]. - The company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, contains detailed disclosures about market risk exposure [156]. Organic Revenue Growth - Total company organic revenue growth for the three months ended September 30, 2025, was 5.0%, compared to 8.8% in the same period of 2024 [155]. - Biopharmaceutical Development segment showed organic revenue growth of 17.3% for the three months ended September 30, 2025, down from 28.9% in 2024 [155]. - Clinical Genomics segment experienced a decline in organic revenue of (3.1%) for the three months ended September 30, 2025, compared to a decline of (26.0%) in 2024 [155]. - For the six months ended September 30, 2025, total company organic revenue growth was 3.7%, down from 11.7% in 2024 [155]. - Calibration Solutions segment reported organic revenue growth of 7.7% for the six months ended September 30, 2025, compared to 5.6% in 2024 [155]. - Sterilization and Disinfection Control segment had organic revenue growth of 5.2% for the six months ended September 30, 2025, down from 36.8% in 2024 [155]. - Clinical Genomics segment's organic revenue decline was (6.4%) for the six months ended September 30, 2025, compared to (20.8%) in 2024 [155]. Goodwill and Foreign Currency - The carrying values of goodwill associated with the Clinical Genomics and Peptides reporting units were $17.1 million and $13.7 million, respectively, as of September 30, 2025 [146]. - The company recognized unrealized foreign currency gains of approximately $6.1 million during the six months ended September 30, 2025, related to an intercompany loan [130].

Exhibit 99.1 Mesa Labs Announces Second Quarter Results Lakewood, Colorado, November 6, 2025 – Mesa Laboratories, Inc. (NASDAQ:MLAB) ("Mesa" or "the Company"), a global leader in the design and manufacture of life science tools and critical quality control solutions, today announced results for its second fiscal quarter ("2Q26") ended September 30, 2025 (amounts in thousands). Financial Summary – 2Q26 versus the same year ago period We operate a diversified business across four divisions: Sterilization and ...

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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 Announcement - Mesa Laboratories, Inc. will issue a press release with financial results for the second quarter of fiscal year 2026 following market close on Thursday, November 6, 2025 [1]

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)