[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]

Revenue Growth - Quarterly revenues for 4Q25 were $62,135, representing a 5.5% increase compared to 4Q24, with core organic revenues growth of 6.3%[9] - Full fiscal year revenues for FY25 reached $240,978, an 11.5% increase from FY24, with core organic revenues growth of 5.0%[10] - The Sterilization and Disinfection Control division generated revenues of $24,749 in 4Q25, with core organic revenues growth of 10.3%[12] - The Biopharmaceutical Development division saw a 20.3% increase in core organic revenues for FY25, driven by increased spending on capital equipment in North America and Europe[15] - Clinical Genomics division revenues for 4Q25 were $11,511, with core organic revenues growth of 4.4%, but a decline of 10.1% for the full year due to regulatory challenges in the China market[16] - Organic revenues growth for the year ended March 31, 2025, was 4.6%, while total revenues growth was 11.5%[31] Financial Performance - Adjusted operating income (AOI) for FY25 increased 12.3% year over year to 23.5% as a percentage of revenues, despite a significant rise in performance-based compensation expenses[4] - Cash flows from operations for FY25 totaled $46,808, with free cash flow of $42,559 primarily used to pay down debt[3] - Gross profit for the year ended March 31, 2025, was $150,870,000, representing a 13.3% increase from $133,250,000 in 2024[26] - The company reported a net loss of $7,114,000 for the three months ended March 31, 2025, compared to a net loss of $254,583,000 in the same period of 2024[26] - Non-GAAP adjusted operating income (AOI) for the three months ended March 31, 2025, was $12,104,000, slightly down from $12,336,000 in 2024[29] Asset Management - The company reduced inventories by 22.4% compared to the prior year, enhancing its ability to manage debt[4] - The company’s total assets decreased to $433,348,000 as of March 31, 2025, from $446,796,000 in 2024[28] - Stockholders' equity increased to $159,830,000 as of March 31, 2025, compared to $145,393,000 in 2024[28] Strategic Initiatives - Mesa Labs fully integrated GKE into its corporate infrastructure within nine months and exceeded acquisition commitments for revenues and profitability[5] - The company implemented Salesforce CRM across all sales teams, contributing to accelerated bookings growth[5] Market Outlook - The company anticipates continued growth in revenues and operating performance, despite uncertainties in the market environment[24] Impairment - The company experienced a significant impairment of goodwill and long-lived assets amounting to $274,533,000 in the year ended March 31, 2024[26] Shareholder Information - The weighted average common shares outstanding for the three months ended March 31, 2025, was 5,439,000, compared to 5,394,000 in the same period of 2024[29]

Core Insights - Mesa Laboratories, Inc. reported solid momentum in FY25 with core organic revenue growth across all four divisions and bookings growth in 4Q25 [2][3] - The company generated total revenues of $240,978, marking an 11.5% increase compared to FY24, with core organic revenue growth of 5.0% [10][34] - Profitability, as measured by adjusted operating income (AOI), increased 12.3% year-over-year to 23.5% as a percentage of revenues, despite challenges from performance-based compensation expenses [3][10] Financial Performance - In 4Q25, total revenues were $62,135, a 5.5% increase from 4Q24, with operating income rising 100.5% to $1,469 [9][10] - For the full fiscal year, operating income increased 106.0% to $16,336, while net loss improved to $(1,974) from $(254,246) in FY24 [10][27] - Cash flows from operations for the year were $46,808, with free cash flow of $42,559 primarily used to pay down debt [2][21] Division Performance - The Sterilization and Disinfection Control (SDC) division generated revenues of $24,749 in 4Q25, with core organic revenue growth of 10.3% [13] - Calibration Solutions (CS) revenues were $13,257 in 4Q25, achieving core organic revenue growth of 3.4% [15] - Biopharmaceutical Development (BPD) revenues reached $12,618 in 4Q25, with a significant annual growth of 20.3% driven by increased spending on capital equipment [16] - Clinical Genomics (CG) revenues were $11,511 in 4Q25, with a quarterly growth of 4.4% but an annual decline of 10.1% due to regulatory challenges in the China market [17] Strategic Milestones - The company successfully integrated GKE into its corporate structure within nine months and exceeded acquisition commitments for revenues and profitability [4] - Implementation of Salesforce CRM across all divisions and progress in Commercial Excellence initiatives contributed to accelerated bookings growth [4] - The Mesa Way initiative led to 45 discrete process improvement events, setting a new record for the company [5] Market Dynamics - Approximately 75% of revenues are derived from a recurring service and consumables mix, which has helped mitigate short-term impacts from increased tariffs [8] - The company is focused on driving profitable market share growth despite uncertainties in global trade and economic conditions [8]

Core Viewpoint - Mesa Labs (MLAB) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements [4][6]. - Mesa Labs is projected to earn $10.44 per share for the fiscal year ending March 2025, reflecting an 11.3% year-over-year increase [8]. - Over the past three months, the Zacks Consensus Estimate for Mesa Labs has risen by 8.3% [8]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [9][10].

Core Viewpoint - Mesa Labs (MLAB) is positioned as a strong investment opportunity due to its improving earnings outlook and analysts' increasing earnings estimates [1][2] Earnings Estimate Revisions - Current-quarter earnings estimate is $2.75 per share, reflecting a -0.72% change from the previous year, with a 16.76% increase in the Zacks Consensus Estimate over the last 30 days [4] - Full-year earnings estimate stands at $10.44 per share, showing an 11.3% increase from the prior year, with an 8.25% rise in the consensus estimate due to positive revisions [5] Analyst Sentiment - Analysts are optimistic about Mesa Labs' earnings prospects, leading to higher estimates which are expected to positively influence the stock price [2][3] - The Zacks Rank system indicates a strong buy rating for Mesa Labs, with a Zacks Rank 1, suggesting significant potential for outperformance compared to the S&P 500 [6] Stock Performance - Mesa Labs shares have increased by 18.1% over the past four weeks, indicating strong investor confidence in the company's earnings growth potential [7]

Core Insights - Mesa Labs reported quarterly earnings of $2.67 per share, exceeding the Zacks Consensus Estimate of $2.45 per share, and up from $2.02 per share a year ago [1] - The company achieved revenues of $62.84 million for the quarter, surpassing the Zacks Consensus Estimate by 4.91%, compared to $53.47 million in the same quarter last year [3] Earnings Performance - The earnings surprise for the quarter was 8.98%, with the company having surpassed consensus EPS estimates two times over the last four quarters [2] - In the previous quarter, Mesa Labs had a negative surprise of -1.21% [2] Revenue Performance - Mesa Labs has also topped consensus revenue estimates two times in the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $2.54, with expected revenues of $61.4 million, and for the current fiscal year, the estimate is $10.01 on revenues of $237.3 million [8] Market Position - Mesa Labs shares have increased by approximately 1.6% since the beginning of the year, while the S&P 500 has gained 1.9% [4] - The Zacks Industry Rank for Medical - Instruments places it in the top 36% of over 250 Zacks industries, indicating a favorable market position [9] Future Outlook - The estimate revisions trend for Mesa Labs is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [7] - The performance of Mesa Labs may be influenced by the overall outlook for the industry [9]

Revenue Growth - Revenues increased by 13.7% during the first three quarters of fiscal year 2025 compared to the prior year period, with GKE contributing $18,971 in revenues [117]. - Organic revenues grew by 4.3% in the first three quarters of fiscal year 2025, driven by a 26.6% increase in the Biopharmaceutical Development division and a 10.1% increase in the Calibration Solutions division [117]. - Revenues for the three months ended December 31, 2024, increased by 17.5% to $62,840 million compared to $53,473 million in the prior year [126]. - The Sterilization and Disinfection Control division's revenues increased by 21.6% for the three months ended December 31, 2024, primarily due to the GKE acquisition, contributing $2,857 million [128]. - Clinical Genomics division revenues increased by 1.0% to $12,667 million for the three months ended December 31, 2024, driven by strong consumables growth in North America [132]. - Biopharmaceutical Development division revenues surged by 29.8% to $12,237 million for the three months ended December 31, 2024, attributed to increased capital spending in the biopharmaceutical markets [136]. - Calibration Solutions division revenues rose by 18.7% to $14,429 million for the three months ended December 31, 2024, due to commercial efforts and price increases [139]. - Total company organic revenue growth for the three months ended December 31, 2024, was 12.6%, compared to a decline of 8.6% in the same period of 2023 [184]. - The Sterilization and Disinfection Control segment showed a total revenue growth of 21.6% for the three months ended December 31, 2024, up from 18.8% in 2023 [184]. - The Biopharmaceutical Development segment achieved a total revenue growth of 29.8% for the three months ended December 31, 2024, compared to a decline of 19.0% in 2023 [184]. - For the nine months ended December 31, 2024, total company organic revenue growth was 4.3%, an improvement from a decline of 6.2% in the same period of 2023 [184]. - The Clinical Genomics segment experienced a decline in total revenue of 14.2% for the nine months ended December 31, 2024, compared to a decline of 14.6% in 2023 [184]. Profitability and Operating Income - Gross profit as a percentage of revenues increased by 1.4 percentage points in the first nine months of fiscal year 2025, primarily due to lower intangible asset amortization expenses [119]. - Operating income for the nine months ended December 31, 2025, was $14,867, an increase of $15,658 compared to the prior year period, attributed to increased revenues and lower amortization expenses [121]. - Gross profit for the same period rose by 19.0% to $39,754 million, up from $33,402 million [126]. - Operating income for the three months ended December 31, 2024, was $5,779 million, a significant increase of 8,725.4% from a loss of $67 million in the prior year [126]. Operating Expenses - Operating expenses remained flat during the nine months ended December 31, 2025, with increases primarily due to higher performance-based compensation and professional services costs related to the GKE acquisition [120]. - Operating expenses increased by 1.5% for the three months ended December 31, 2024, with a notable increase of 10.5% when excluding decreased amortization expenses [141]. - Selling expenses increased by 7.3% to $10,450 million for the three months ended December 31, 2024, primarily due to performance-based compensation expenses [144]. - General and administrative expenses decreased by 5.0% to $18,472 million for the three months ended December 31, 2024, but would have increased by 10.5% excluding amortization expenses [146]. - Research and development expenses increased by 17.7% to $5,053 million for the three months ended December 31, 2024, and by 2.3% to $14,422 million for the nine months ended December 31, 2024, compared to the prior year periods [148]. Cash Flow and Financing - Net cash provided by operating activities was $34,143 million for the nine months ended December 31, 2024, an increase of $2,893 million compared to the prior year [175]. - Cash used in investing activities increased to $(3,492) million for the nine months ended December 31, 2024, primarily due to equipment purchases for the Biopharmaceutical Development division [175]. - Cash used in financing activities amounted to $28,316 for the nine months ended December 31, 2024, with $23,500 used to repay the Revolver and $2,813 to pay down the Term Loan [176]. - The company plans to use cash on hand, draws against the Revolver, and cash generated from operating activities to fund $101,250 million in principal debt payments due within the next twelve months [164]. - Revenues increased by $21,560 compared to the prior year period, although cash paid for interest on the Credit Facility rose by $5,600 due to higher outstanding debt [178]. Acquisitions - The company acquired GKE for $87,187 million during fiscal year 2024, with an expected holdback of approximately $9,000 million related to the acquisition [159]. - The GKE acquisition includes a payment of approximately $9,000 due in April 2025, pending adjustments for potential indemnification losses [179]. - The Belyntic acquisition may result in a payment of $1,500 if specified patents are issued, with an estimated fair value of remaining contingent consideration at $650 as of December 31, 2024 [180]. Risks and Challenges - The Biopharmaceutical Development division is particularly exposed to currency exchange risks, with significant expenses in Swedish Krona while revenues are primarily in USD and euros [185]. - The company faces foreign currency exchange rate risks, particularly in the Biopharmaceutical Development division, which incurs significant expenses in Swedish Krona while most revenues are in USD and euros [185]. - An estimated additional cash interest expense of approximately $930 per year is expected if interest rates increase by 1 percentage point [187]. - Inflation has historically been offset by annual price increases, but future price increases may lead to declines in sales volume if competitors do not adjust prices accordingly [188]. - Material weaknesses in internal controls were identified, with remediation plans implemented, but one related to IT general controls remains unresolved [191]. - The company identified material weaknesses in internal controls over financial reporting, with remediation plans implemented during the fiscal year 2025 [191]. - GKE was acquired in the third quarter of the fiscal year ended March 31, 2024, and its control environment is now included in the assessment of internal controls over financial reporting [195].