0000724004 MESA LABORATORIES INC /CO false --03-31 Q2 2025 1,026 1,321 25,656 22,519 0 0 25,000,000 25,000,000 5,419,855 5,419,855 5,394,491 5,394,491 0.16 0.16 0 4 8.4 1 21 false false false Chief Executive Officer Gary Owens true September 12, 2024 30,939 Intersegment revenues are not significant and are eliminated to arrive at consolidated totals. Unallocated corporate expenses are reported within corporate and other. Revenues of $12,117 from GKE are included in the Sterilization and Disinfection Control division during the six months ended September 30, 2024. Accumulated Other Comprehensive Income (Loss). Revenues of $5,863 from GKE are included in the Sterilization and Disinfection Control division during the three months ended September 30, 2024. Includes post-acquisition GKE results during the three and six months ended September 30, 2024. Balances for PSUs granted are reflected at target. 00007240042024-04-012024-09-30 xbrli:shares 00007240042024-10-31 thunderdome:item iso4217:USD 00007240042024-09-30 00007240042024-03-31 0000724004us-gaap:CustomerRelationshipsMember2024-09-30 0000724004us-gaap:CustomerRelationshipsMember2024-03-31 0000724004us-gaap:OtherIntangibleAssetsMember2024-09-30 0000724004us-gaap:OtherIntangibleAssetsMember2024-03-31 iso4217:USDxbrli:shares 0000724004us-gaap:ProductMember2024-07-012024-09-30 0000724004us-gaap:ProductMember2023-07-012023-09-30 0000724004us-gaap:ProductMember2024-04-012024-09-30 0000724004us-gaap:ProductMember2023-04-012023-09-30 00007240042024-07-012024-09-30 00007240042023-07-012023-09-30 00007240042023-04-012023-09-30 0000724004us-gaap:ServiceMember2024-07-012024-09-30 0000724004us-gaap:ServiceMember2023-07-012023-09-30 0000724004us-gaap:ServiceMember2024-04-012024-09-30 0000724004us-gaap:ServiceMember2023-04-012023-09-30 0000724004us-gaap:CommonStockMember2024-03-31 0000724004us-gaap:RetainedEarningsMember2024-03-31 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-31 0000724004us-gaap:CommonStockMember2024-04-012024-06-30 00007240042024-04-012024-06-30 0000724004us-gaap:RetainedEarningsMember2024-04-012024-06-30 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-30 0000724004us-gaap:CommonStockMember2024-06-30 0000724004us-gaap:RetainedEarningsMember2024-06-30 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-30 00007240042024-06-30 0000724004us-gaap:CommonStockMember2024-07-012024-09-30 0000724004us-gaap:RetainedEarningsMember2024-07-012024-09-30 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-30 0000724004us-gaap:CommonStockMember2024-09-30 0000724004us-gaap:RetainedEarningsMember2024-09-30 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-30 0000724004us-gaap:CommonStockMember2023-03-31 0000724004us-gaap:RetainedEarningsMember2023-03-31 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-31 00007240042023-03-31 0000724004us-gaap:CommonStockMember2023-04-012023-06-30 00007240042023-04-012023-06-30 0000724004us-gaap:RetainedEarningsMember2023-04-012023-06-30 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-30 0000724004us-gaap:CommonStockMember2023-06-30 0000724004us-gaap:RetainedEarningsMember2023-06-30 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-30 00007240042023-06-30 0000724004us-gaap:CommonStockMember2023-07-012023-09-30 0000724004us-gaap:RetainedEarningsMember2023-07-012023-09-30 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-30 0000724004us-gaap:CommonStockMember2023-09-30 0000724004us-gaap:RetainedEarningsMember2023-09-30 0000724004us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-30 00007240042023-09-30 xbrli:pure 0000724004mlab:GkeAcquisitionMembermlab:GkeGmbhAndSalGmbhMember2023-10-16 0000724004mlab:GkeAcquisitionMembermlab:BeijingGkeScienceTechnologyCoLtdMember2023-10-16 0000724004mlab:GkeAcquisitionMember2023-10-162023-10-16 0000724004mlab:GkeAcquisitionMember2024-07-012024-09-30 0000724004mlab:GkeAcquisitionMember2024-04-012024-09-30 0000724004mlab:GkeAcquisitionMembermlab:InventoryStepupRelatedToCostOfRevenueMember2024-07-012024-09-30 0000724004mlab:GkeAcquisitionMembermlab:InventoryStepupRelatedToCostOfRevenueMember2024-04-012024-09-30 0000724004mlab:GkeAcquisitionMembermlab:CostOfRevenuesRelatedToIntangiblesAcquiredMember2024-07-012024-09-30 0000724004mlab:GkeAcquisitionMembermlab:CostOfRevenuesRelatedToIntangiblesAcquiredMember2024-04-012024-09-30 0000724004mlab:GkeAcquisitionMemberus-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-30 0000724004mlab:GkeAcquisitionMemberus-gaap:GeneralAndAdministrativeExpenseMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004mlab:ConsumablesMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004mlab:HardwareAndSoftwareMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:ServiceMemberus-gaap:TransferredAtPointInTimeMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:SterilizationAndDisinfectionControlMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ClinicalGenomicsMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:BiopharmaceuticalDevelopmentMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:CalibrationSolutionsMember2024-07-012024-09-30 0000724004mlab:GkeGmbhMembermlab:SterilizationAndDisinfectionControlMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004mlab:ConsumablesMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004mlab:HardwareAndSoftwareMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:ServiceMemberus-gaap:TransferredAtPointInTimeMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:SterilizationAndDisinfectionControlMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ClinicalGenomicsMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:BiopharmaceuticalDevelopmentMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:CalibrationSolutionsMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004mlab:ConsumablesMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004mlab:HardwareAndSoftwareMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:ServiceMemberus-gaap:TransferredAtPointInTimeMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:SterilizationAndDisinfectionControlMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ClinicalGenomicsMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:BiopharmaceuticalDevelopmentMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:CalibrationSolutionsMember2024-04-012024-09-30 0000724004mlab:GkeGmbhMembermlab:SterilizationAndDisinfectionControlMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ConsumablesMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004mlab:ConsumablesMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:HardwareAndSoftwareMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004mlab:HardwareAndSoftwareMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:SterilizationAndDisinfectionControlMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:ClinicalGenomicsMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:BiopharmaceuticalDevelopmentMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMemberus-gaap:ServiceMembermlab:CalibrationSolutionsMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:ServiceMemberus-gaap:TransferredAtPointInTimeMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:SterilizationAndDisinfectionControlMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ClinicalGenomicsMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:BiopharmaceuticalDevelopmentMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:CalibrationSolutionsMember2023-04-012023-09-30 0000724004country:US2024-07-012024-09-30 0000724004country:US2023-07-012023-09-30 0000724004country:US2024-04-012024-09-30 0000724004country:US2023-04-012023-09-30 0000724004country:CN2024-07-012024-09-30 0000724004country:CN2023-07-012023-09-30 0000724004country:CN2024-04-012024-09-30 0000724004country:CN2023-04-012023-09-30 0000724004mlab:OtherMember2024-07-012024-09-30 0000724004mlab:OtherMember2023-07-012023-09-30 0000724004mlab:OtherMember2024-04-012024-09-30 0000724004mlab:OtherMember2023-04-012023-09-30 0000724004us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2024-07-012024-09-30 0000724004mlab:TheNotesMemberus-gaap:SeniorNotesMember2024-04-05 0000724004mlab:Outstanding2025NotesMember2024-04-05 0000724004mlab:Outstanding2025NotesMember2024-09-30 0000724004us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SeniorNotesMember2024-09-30 0000724004us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMember2024-09-30 0000724004us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SeniorNotesMember2024-03-31 0000724004us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMember2024-03-31 0000724004mlab:GkeAcquisitionMember2024-09-30 0000724004mlab:GkeAcquisitionMemberus-gaap:FairValueInputsLevel3Member2024-09-30 0000724004mlab:OtherLongtermLiabilitiesMembermlab:BelynticAcquisitionMember2022-11-17 0000724004mlab:BelynticAcquisitionMember2024-09-30 0000724004mlab:BelynticAcquisitionMemberus-gaap:FairValueInputsLevel3Member2024-09-30 0000724004mlab:OtherAccruedExpensesMember2024-09-30 0000724004mlab:OtherAccruedExpensesMember2024-03-31 0000724004mlab:GkeAcquisitionMember2024-03-31 0000724004us-gaap:CostOfSalesMember2024-07-012024-09-30 0000724004us-gaap:CostOfSalesMember2023-07-012023-09-30 0000724004us-gaap:CostOfSalesMember2024-04-012024-09-30 0000724004us-gaap:CostOfSalesMember2023-04-012023-09-30 0000724004us-gaap:OperatingExpenseMember2024-07-012024-09-30 0000724004us-gaap:OperatingExpenseMember2023-07-012023-09-30 0000724004us-gaap:OperatingExpenseMember2024-04-012024-09-30 0000724004us-gaap:OperatingExpenseMember2023-04-012023-09-30 0000724004us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-30 0000724004us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-30 0000724004us-gaap:GeneralAndAdministrativeExpenseMember2024-04-012024-09-30 0000724004us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:SterilizationAndDisinfectionControlMember2024-03-31 0000724004us-gaap:OperatingSegmentsMembermlab:ClinicalGenomicsMember2024-03-31 0000724004us-gaap:OperatingSegmentsMembermlab:BiopharmaceuticalDevelopmentMember2024-03-31 0000724004us-gaap:OperatingSegmentsMembermlab:CalibrationSolutionsMember2024-03-31 0000724004us-gaap:OperatingSegmentsMembermlab:SterilizationAndDisinfectionControlMember2024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:ClinicalGenomicsMember2024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:BiopharmaceuticalDevelopmentMember2024-09-30 0000724004us-gaap:OperatingSegmentsMembermlab:CalibrationSolutionsMember2024-09-30 utr:Y 0000724004mlab:SeniorSecuredCreditAgreementMember2021-03-052021-03-05 0000724004us-gaap:RevolvingCreditFacilityMembermlab:SeniorSecuredCreditAgreementMember2021-03-05 0000724004mlab:SeniorSecuredCreditAgreementMembersrt:MaximumMembermlab:SwinglineLoanMember2021-03-05 0000724004us-gaap:LetterOfCreditMembermlab:SeniorSecuredCreditAgreementMembersrt:MaximumMember2021-03-05 0000724004mlab:SeniorSecuredCreditAgreementMembermlab:TheCreditFacilityTermLoanMembersrt:MinimumMember2021-03-05 0000724004mlab:SeniorSecuredCreditAgreementMembermlab:TheCreditFacilityTermLoanMembersrt:MaximumMember2021-03-05 0000724004mlab:SeniorSecuredCreditAgreementMembermlab:TheCreditFacilityTermLoanMembersrt:MaximumMember2023-10-05 0000724004mlab:TheCreditFacilityTermLoanMember2024-09-30 0000724004us-gaap:RevolvingCreditFacilityMembermlab:SeniorSecuredCreditAgreementMember2024-09-30 0000724004mlab:SeniorSecuredCreditAgreementMembermlab:TheCreditFacilityTermLoanMember2024-09-30 0000724004mlab:SeniorSecuredCreditAgreementMembersrt:MinimumMember2024-07-012024-09-30 0000724004mlab:SeniorSecuredCreditAgreementMembersrt:MaximumMember2024-07-012024-09-30 0000724004mlab:TheCreditFacilityTermLoanMember2024-09-30 0000724004mlab:TheCreditFacilityTermLoanMember2024-04-052024-04-05 0000724004mlab:SeniorSecuredCreditAgreementMembersrt:MinimumMember2024-04-052024-04-05 0000724004mlab:TermLoanMember2024-04-05 0000724004mlab:TermLoanMember2024-07-012024-09-30 0000724004mlab:TermLoanMember2024-04-012024-09-30 0000724004mlab:TermLoanMember2024-09-30 0000724004mlab:TermLoanMember2024-03-31 0000724004mlab:SeniorSecuredCreditAgreementMember2024-09-30 0000724004mlab:SeniorSecuredCreditAgreementMemberus-gaap:SubsequentEventMember2024-10-012024-10-01 0000724004mlab:PrepaidExpensesOtherAndOtherAssetsMembermlab:SeniorSecuredCreditAgreementMember2024-09-30 0000724004mlab:PrepaidExpensesOtherAndOtherAssetsMembermlab:SeniorSecuredCreditAgreementMember2024-03-31 0000724004mlab:TheNotesMemberus-gaap:SeniorNotesMember2019-08-12 0000724004mlab:TheNotesMemberus-gaap:SeniorNotesMember2019-08-122019-08-12 0000724004mlab:Outstanding2025NotesMember2024-04-052024-04-05 0000724004mlab:Outstanding2025NotesMember2024-04-012024-09-30 0000724004mlab:TheNotesMemberus-gaap:SeniorNotesMember2024-09-30 0000724004mlab:TheNotesMemberus-gaap:SeniorNotesMember2024-03-31 0000724004mlab:TheNotesMember2024-07-012024-09-30 0000724004mlab:TheNotesMember2023-07-012023-09-30 0000724004mlab:TheNotesMember2024-04-012024-09-30 0000724004mlab:TheNotesMember2023-04-012023-09-30 0000724004mlab:The2021EquityPlanMember2024-06-30 0000724004us-gaap:RestrictedStockUnitsRSUMember2024-03-31 0000724004mlab:PerformanceStockUnitsMember2024-03-31 0000724004us-gaap:RestrictedStockUnitsRSUMember2024-04-012024-09-30 0000724004mlab:PerformanceStockUnitsMember2024-04-012024-09-30 0000724004us-gaap:RestrictedStockUnitsRSUMember2024-09-30 0000724004mlab:PerformanceStockUnitsMember2024-09-30 0000724004us-gaap:RestrictedStockUnitsRSUMembermlab:NonemployeeDirectorsMember2024-07-012024-09-30 0000724004mlab:TheFy25PsusMembermlab:EligibleEmployeesMember2024-09-30 0000724004mlab:TheFy25PsusMembermlab:EligibleEmployeesMember2024-04-012024-09-30 0000724004mlab:TheFy25PsusMembersrt:MinimumMembermlab:EligibleEmployeesMember2024-04-012024-09-30 0000724004mlab:TheFy25PsusMembersrt:MaximumMembermlab:EligibleEmployeesMember2024-04-012024-09-30 00007240042023-04-012024-03-31 0000724004mlab:AssumedConversionOfConvertibleDebtMember2024-07-012024-09-30 0000724004mlab:AssumedConversionOfConvertibleDebtMember2023-07-012023-09-30 0000724004mlab:AssumedConversionOfConvertibleDebtMember2024-04-012024-09-30 0000724004mlab:AssumedConversionOfConvertibleDebtMember2023-04-012023-09-30 0000724004mlab:StockAwardsThatWereAntidilutiveMember2024-07-012024-09-30 0000724004mlab:StockAwardsThatWereAntidilutiveMember2023-07-012023-09-30 0000724004mlab:StockAwardsThatWereAntidilutiveMember2024-04-012024-09-30 0000724004mlab:StockAwardsThatWereAntidilutiveMember2023-04-012023-09-30 0000724004us-gaap:OperatingSegmentsMember2024-07-012024-09-30 0000724004us-gaap:OperatingSegmentsMember2023-07-012023-09-30 0000724004us-gaap:OperatingSegmentsMember2024-04-012024-09-30 0000724004us-gaap:OperatingSegmentsMember2023-04-012023-09-30 0000724004us-gaap:CorporateNonSegmentMember2024-07-012024-09-30 0000724004us-gaap:CorporateNonSegmentMember2023-07-012023-09-30 0000724004us-gaap:CorporateNonSegmentMember2024-04-012024-09-30 0000724004us-gaap:CorporateNonSegmentMember2023-04-012023-09-30
 

 

Table of Contents

 

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

or

 

 

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___ to ___

 

Commission File No: 0-11740

 

 

MESA LABORATORIES, INC.

(Exact name of registrant as specified in its charter)

 

 

Colorado

 

84-0872291

 
 

(State or other jurisdiction of

 

(I.R.S. Employer

 
 

incorporation or organization)

 

Identification number)

 
     
 

12100 West Sixth Avenue

   
 

Lakewood, Colorado

 

80228

 
 

(Address of principal executive offices)

 

(Zip Code)

 

 

Registrant’s telephone number, including area code: (303) 987-8000

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each classTrading SymbolName on each exchange on which registered
Common Stock, no par valueMLABThe Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒   No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐     No ☒

 

Indicate the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date:

 

There were 5,431,424 shares of the Issuer’s common stock, no par value, outstanding as of October 31, 2024.

 

 

 
Table of Contents

 

 

Table of Contents

 

 

 

Part I. Financial Information

 1
   
 

Item 1. Financial Statements (unaudited) 

 1
 

Condensed Consolidated Balance Sheets

 1
 

Condensed Consolidated Statements of Operations

 2
 

Condensed Consolidated Statements of Comprehensive Income (Loss)

 3
 

Condensed Consolidated Statements of Stockholders’ Equity

 4
  Condensed Consolidated Statements of Cash Flows 5
 

Notes to Condensed Consolidated Financial Statements

 6
 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 15
 

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

 22
 

Item 4.  Controls and Procedures

 22
     

Part II. Other Information

 23
   
 

Item 1.  Legal Proceedings

 23
 

Item 1A.  Risk factors

 23
 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

 23
  Item 5. Other Information 23
 

Item 6.  Exhibits

 24
 

Signatures

 25
 

Exhibit 31.1 Certifications Pursuant to Rule 13a-14(a)

  
 

Exhibit 31.2 Certifications Pursuant to Rule 13a-14(a)

  
 

Exhibit 32.1 Certifications Pursuant to Rule 13a-14(b) and 18 U.S.C Section 1350

  
 

Exhibit 32.2 Certifications Pursuant to Rule 13a-14(b) and 18 U.S.C Section 1350

  

 

 
Table of Contents

 

 

Part I. Financial Information

 

Item 1. Financial Statements

 

Mesa Laboratories, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share amounts)

 

  

September 30,

  

March 31,

 
  

2024

  

2024

 

ASSETS

        

Current assets:

        

Cash and cash equivalents

 $24,337  $28,214 

Accounts receivable, less allowance for credit losses of $1,026 and $1,321, respectively

  40,234   39,055 

Inventories

  29,738   32,675 

Prepaid expenses and other current assets

  13,669   9,408 

Total current assets

  107,978   109,352 

Noncurrent assets:

        

Property, plant and equipment, net of accumulated depreciation of $25,656 and $22,519 respectively

  32,073   31,766 

Deferred tax asset

  1,329   1,292 

Other assets

  20,142   10,538 

Customer relationships, net

  81,928   85,383 

Other intangibles, net

  26,895   28,369 

Goodwill

  183,753   180,096 

Total assets

 $454,098  $446,796 
         

LIABILITIES AND STOCKHOLDERS’ EQUITY

        

Current liabilities:

        

Accounts payable

 $5,988  $6,041 

Accrued payroll and benefits

  9,185   9,935 

Unearned revenues

  14,412   15,478 

Other accrued expenses

  22,866   12,858 

Term loan, current portion

  3,750   - 

Convertible senior notes, current portion, net of debt issuance costs

  97,029   - 

Total current liabilities

  153,230   44,312 

Noncurrent liabilities:

        

Deferred tax liability

 $20,561   19,780 

Other noncurrent liabilities

  14,653   15,613 

Revolving line of credit

  35,500   50,500 

Term loan, noncurrent portion, net of discounts and debt issuance costs

  68,703   - 

Convertible senior notes, noncurrent portion, net of debt issuance costs

  -   171,198 

Total liabilities

  292,647   301,403 

Stockholders’ equity:

        

Common stock, no par value; authorized 25,000,000 shares; issued and outstanding, 5,419,855 and 5,394,491 shares, respectively

  349,529   343,642 

(Accumulated deficit)

  (178,407)  (183,494)

Accumulated other comprehensive (loss)

  (9,671)  (14,755)

Total stockholders’ equity

  161,451   145,393 

Total liabilities and stockholders’ equity

 $454,098  $446,796 

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

 

Page 1
Table of Contents

 

 

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

 

      Three Months Ended September 30,       Six Months Ended September 30,  
   

2024

    

2023

    

2024

    

2023

  
                                 

Revenues

   $ 57,833     $ 53,165     $ 116,003     $ 103,810  

Cost of revenues

     22,378       21,056       43,299       40,518  

Gross profit

     35,455       32,109       72,704       63,292  

Operating expense:

                                

Selling

     9,849       9,650       19,965       18,626  

General and administrative

     17,464       17,526       34,282       35,586  

Research and development

     4,634       4,993       9,369       9,804  

Total operating expense

     31,947       32,169       63,616       64,016  

Operating income (loss)

     3,508       (60 )     9,088       (724 )

Nonoperating expense:

                                

Interest expense and amortization of debt issuance costs

     3,018       905       5,860       1,953  

(Gain) on extinguishment of convertible senior notes

     -       -       (3,197 )     -  

Other (income) expense, net

     (3,322 )     360       (1,292 )     (415 )

Total nonoperating (income) expense, net

     (304 )     1,265       1,371       1,538  

Earnings (loss) before income taxes

     3,812       (1,325 )     7,717       (2,262 )

Income tax expense (benefit)

     384       (95 )     901       (483 )

Net income (loss)

   $ 3,428     $ (1,230 )   $ 6,816     $ (1,779 )
                                 

Earnings (loss) per share:

                                

Basic

   $ 0.63     $ (0.23 )   $ 1.26     $ (0.33 )

Diluted

   $ 0.63     $ (0.23 )   $ 1.25     $ (0.33 )
                                 

Weighted-average common shares outstanding:

                                

Basic

     5,413       5,387       5,405       5,379  

Diluted

     5,471       5,387       5,448       5,379  

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

Page 2
Table of Contents

 

 

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

(in thousands) 

 

   Three Months Ended September 30,   Six Months Ended September 30, 
  

2024

  

2023

  

2024

  

2023

 
                 

Net income (loss)

 $3,428  $(1,230) $6,816  $(1,779)

Other comprehensive income (loss):

                

Foreign currency translation adjustments

  4,632   (1,353)  5,084   (8,014)

Comprehensive income (loss)

 $8,060  $(2,583) $11,900  $(9,793)

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

Page 3
Table of Contents

 

 

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(dollars in thousands, except per share data)

 

 

 

  

Common Stock

             
  

Number of Shares

  

Amount

  

(Accumulated Deficit) Retained Earnings

  

AOCI*

  

Total

 

March 31, 2024

  5,394,491  $343,642  $(183,494) $(14,755) $145,393 

Exercise of stock options and vesting of restricted stock units

  20,858   -   -   -   - 

Tax withholding on vesting of restricted stock units

  (6,194)  (571)  -   -   (571)

Dividends paid, $0.16 per share

  -   -   (863)  -   (863)

Stock-based compensation expense

  -   2,928   -   -   2,928 

Foreign currency translation

  -   -   -   452   452 

Net income

  -   -   3,388   -   3,388 

June 30, 2024

  5,409,155  $345,999  $(180,969) $(14,303) $150,727 

Exercise of stock options and vesting of restricted stock units

  13,006   -   -   -   - 

Tax withholding on vesting of restricted stock units

  (2,306)  (307)  -   -   (307)

Dividends paid, $0.16 per share

  -   -   (866)  -   (866)

Stock-based compensation expense

  -   3,837   -   -   3,837 

Foreign currency translation

  -   -   -   4,632   4,632 

Net income

  -   -   3,428   -   3,428 

September 30, 2024

  5,419,855  $349,529  $(178,407) $(9,671) $161,451 

 

 

   

Common Stock

                          
   

Number of Shares

    

Amount

    

(Accumulated Deficit) Retained Earnings

    

AOCI*

    

Total

  

March 31, 2023

     5,369,466     $ 332,076     $ 74,199     $ (12,795 )   $ 393,480  

Exercise of stock options and vesting of restricted stock units

     20,074       52       -       -       52  

Tax withholding on vesting of restricted stock units

     (5,260 )     (712 )     -       -       (712 )

Dividends paid, $0.16 per share

     -       -       (859 )     -       (859 )

Stock-based compensation expense

     -       2,968       -       -       2,968  

Foreign currency translation

     -       -       -       (6,661 )     (6,661 )

Net (loss)

     -       -       (549 )     -       (549 )

June 30, 2023

     5,384,280     $ 334,384     $ 72,791     $ (19,456 )   $ 387,719  

Exercise of stock options and vesting of restricted stock units

     7,464       304       -       -       304  

Tax withholding on vesting of restricted stock units

     (18 )     (2 )     -       -       (2 )

Dividends paid, $0.16 per share

     -       -       (862 )     -       (862 )

Stock-based compensation expense

     -       3,183       -       -       3,183  

Foreign currency translation

     -       -       -       (1,353 )     (1,353 )

Net (loss)

     -       -       (1,230 )     -       (1,230 )

September 30, 2023

     5,391,726     $ 337,869     $ 70,699     $ (20,809 )   $ 387,759  

 

*Accumulated Other Comprehensive Income (Loss).

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

Page 4
Table of Contents

 

 

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

   

Six Months Ended September 30,

  
   

2024

    

2023

  

Cash flows from operating activities:

                

Net income (loss)

   $ 6,816     $ (1,779 )

Adjustments to reconcile net income (loss) to net cash from operating activities:

                

Depreciation of property, plant and equipment

     2,922       1,825  

Amortization of acquisition-related intangibles

     8,611       14,405  

Stock-based compensation expense

     6,765       6,151  

Gain on extinguishment of convertible notes

     (3,197 )     -  

Amortization of step-up in inventory basis

     1,232       -  

Other

     (1,100 )     1,598  

Cash from changes in operating assets and liabilities:

                

Accounts receivable, net

     (566 )     5,448  

Inventories

     (44 )     (184 )

Prepaid expenses and other assets

     (1,449 )     (3,528 )

Accounts payable

     (189 )     (1,307 )

Accrued liabilities and taxes payable

     (2,788 )     (1,743 )

Unearned revenues

     (1,309 )     (1,171 )

Net cash provided by operating activities

     15,704       19,715  

Cash flows from investing activities:

                

Purchases of property, plant and equipment

     (2,679 )     (904 )

Net cash (used in) investing activities

     (2,679 )     (904 )

Cash flows from financing activities:

                

Proceeds from the issuance of debt, net

     73,465       -  

Repayment of debt

     (16,875 )     (13,000 )

Repurchase of convertible debt

     (71,250 )     -  

Dividends paid

     (1,729 )     (1,721 )

Other financing, net

     (1,330 )     (358 )

Net cash (used in) financing activities

     (17,719 )     (15,079 )

Effect of exchange rate changes on cash and cash equivalents

     817       (1,025 )

Net (decrease) increase in cash and cash equivalents

     (3,877 )     2,707  

Cash and cash equivalents at beginning of period

     28,214       32,910  

Cash and cash equivalents at end of period

   $ 24,337     $ 35,617  

 

Supplemental non-cash activity:

                

Right of use assets obtained in exchange for lease liabilities

   $ 9,658     $ 991  

 

 

See accompanying notes to Condensed Consolidated Financial Statements.

 

Page 5
Table of Contents

 

Mesa Laboratories, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(dollar and share amounts in thousands, unless otherwise specified)

 

 

 

Note 1. Description of Business and Summary of Significant Accounting Policies

 

Description of Business

 

In this quarterly report on Form 10-Q, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries, is collectively referred to as “we,” “us,” “our,” the “Company,” or “Mesa.”

 

We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and Asia Pacific, and by independent distributors in these areas and throughout the rest of the world. We prefer markets in which we can establish a strong presence and achieve high gross profit margins.

 

As of September 30, 2024, we managed our operations in four reportable segments, or divisions:

 

 ●Sterilization and Disinfection Control - manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization, decontamination, disinfection, and cleaning processes in the medical device, pharmaceutical, and healthcare industries. The division also provides testing and laboratory services, mainly to the dental and pharmaceutical industries. 
 

●

Clinical Genomics - develops, manufactures and sells highly sensitive, low-cost, high-throughput genetic analysis tools and related consumables and services that enable clinical research labs and contract research organizations to perform genomic testing for a broad range of research applications in several therapeutic areas, such as screenings for hereditary diseases, pharmacogenetics, oncology related applications, and toxicology research.

 

●

Biopharmaceutical Development - develops, manufactures, sells and services automated systems for protein analysis (immunoassays) and peptide synthesis solutions. Immunoassays and peptide synthesis solutions accelerate the discovery, development, and manufacture of biotherapeutic therapies, among other applications. 

 

●

Calibration Solutions - develops, manufactures, sells and services quality control products using principles of advanced metrology to enable customers to measure and calibrate critical parameters in applications such as environmental and process monitoring, dialysis, gas flow, air quality and torque testing.

 

Basis of Presentation

 

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. In the opinion of management, such unaudited information includes all adjustments, consisting of normal recurring adjustments necessary for the fair statement of our financial position and results of operations. The results of operations for interim periods are not necessarily indicative of results that may be achieved for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The Condensed Consolidated Financial Statements include the accounts of Mesa and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We made no material changes to the application of our significant accounting policies disclosed in our annual report on Form 10-K. This quarterly report should be read in conjunction with the consolidated financial statements included in our annual report on Form 10-K for the year ended  March 31, 2024.

 

Our fiscal year ends on March 31. References in this Quarterly Report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively.

 

Risks and Uncertainties

 

The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods. These estimates represent management's judgment about the outcome of future events. The global business environment continues to be impacted by cost pressures, the overall effects of economic uncertainty on customers' purchasing patterns, high interest rates, and other factors. It is not possible to accurately predict the future impact of such events and circumstances. Actual results could differ from our estimates.

 

Recently Issued Accounting Pronouncements

 

In  November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ASU No. 2023-07 requires all annual disclosures currently required by Topic 280 to be included in interim financial statements and requires disclosure of significant segment expenses regularly provided to the chief operating decision maker ("CODM"), a description of other segment items by reportable segment, and applicable additional measures of segment profit or loss used by the CODM when allocating resources and assessing business performance. The ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year 2025 for annual periods), and interim periods within fiscal years beginning after December 15, 2024 (our fiscal year 2026 for interim periods) on a retrospective basis. We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements.

 

In  December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU No. 2023-09, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for public business entities for fiscal years beginning after  December 15, 2024 (our fiscal year 2026), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.

 

Page 6
Table of Contents
 

We have reviewed all recently issued accounting pronouncements and have concluded that, other than as described above, they are either not applicable to us or are not expected to have a significant impact on our consolidated financial statements.

 
 

Note 2. Significant Transactions

 

GKE - Fiscal Year 2024 Acquisition 

We acquired 100% of the outstanding shares of GKE GmbH and SAL GmbH effective  October 16, 2023, and upon approval by applicable Chinese regulators, effective December 31, 2023, we acquired 100% of the outstanding shares of Beijing GKE Science & Technology Co. Ltd. (“GKE China” and together with GKE GmbH and SAL GmbH, “GKE” or the "GKE acquisition").

 

GKE develops, manufactures and sells a highly competitive portfolio of chemical sterilization indicators, biologics, and process challenge devices to protect patient safety across global healthcare markets. GKE is included in our Sterilization and Disinfection Control ("SDC") division, and GKE's strengths in chemical indictors are complementary to SDC's strengths in biologic indicators as chemical and biologic indicators are used in the same sterility validation workflows. Additionally, GKE’s healthcare-focused commercial capabilities in Europe and Asia greatly expand our reach in the healthcare markets in those geographies. We are working to obtain regulatory 510(k) clearance on certain GKE products for sale in the United States, which would further expand organic revenues growth opportunities from the GKE business.

  

We finalized our purchase price accounting of GKE during fiscal year 2024. Total cash consideration for the GKE acquisition was $87,187, net of cash and financial liabilities acquired and inclusive of working capital adjustments. Of the total acquisition price, approximately $9,700 (at September 30, 2024 exchange rates) is being held back until April 2025 in accordance with the purchase agreement as security against potential indemnification losses ("GKE holdback"). We funded the acquisition through a combination of cash on-hand and a total of $71,000 borrowed under our line of credit. 

 

During the three and six months ended September 30, 2024, GKE's operations contributed the following amounts to our consolidated results of operations: 

 

  

Three Months Ended

  

Six Months Ended

 
  September 30, 2024 

Revenues

 $5,863  $12,117 

Gross profit

  3,733   7,553 
         

Amortization of inventory step-up recorded in cost of revenues

  454   1,232 

Amortization of acquired intangibles recorded in cost of revenues

  134   244 

Amortization of acquired intangibles recorded in general and administrative expense

  956   1,488 

 
 

Note 3. Revenue

 

We develop, manufacture, market, sell and maintain life sciences tools and quality control instruments and related consumables.

 

Hardware sales include physical products such as instruments used for molecular and genetic analysis, protein synthesizers, medical meters, wireless sensor systems, data loggers, and process challenge devices. Hardware sales  may be offered with accompanying perpetual or annual software licenses, which in some cases are required for the hardware to function.

 

Consumables are typically used on a one-time basis and require frequent replacement in our customers' operating cycles. Consumables sold by our Clinical Genomics and Biopharmaceutical Development divisions, such as reagents used for molecular and genetic analysis or solutions used for protein synthesis, are critical to the ongoing use of our instruments. Consumables such as biological and chemical indicator test strips sold by our Sterilization and Disinfection Control division are used on a standalone basis.

 

Revenues from hardware and consumables are recognized upon transfer to the customer, typically at the point of shipment. 

 

We also offer maintenance, calibration, and testing services. Such service contracts result in revenues recognized over time, for example, when we are obligated to perform labor and replace parts on an as-needed basis over a contractually specified period, or at a point in time, upon completion of a specific, discrete service. In many cases, our contracts contain both revenues recognized over time and revenues recognized at a point in time. 

 

We evaluate our revenues internally based on business division and the nature of goods and services provided.

 

The following tables present disaggregated revenues for the three and six months ended September 30, 2024 and 2023, respectively:

 

  

Three Months Ended September 30, 2024

 
  

Sterilization and Disinfection Control (1)

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $19,473  $8,178  $3,826  $444  $31,921 

Hardware and software

  144   2,451   5,168   7,848   15,611 

Services

  2,588   870   2,873   3,970   10,301 

Total revenues

 $22,205  $11,499  $11,867  $12,262  $57,833 

 

(1) Revenues of $5,863 from GKE are included in the Sterilization and Disinfection Control division during the three months ended September 30, 2024. 

 

Page 7
Table of Contents
 
  

Three Months Ended September 30, 2023

 
  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $14,749  $9,963  $4,187  $786  $29,685 

Hardware and software

  120   4,474   2,475   6,884   13,953 

Services

  2,211   1,112   2,545   3,659   9,527 

Total revenues

 $17,080  $15,549  $9,207  $11,329  $53,165 

 

  

Six Months Ended September 30, 2024

 
  

Sterilization and Disinfection Control (1)

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 

Consumables

 $39,869  $16,290  $7,748  $1,024  $64,931 

Hardware and software

  313   4,634   10,005   14,734   29,686 

Services

  4,980   1,979   6,122   8,305   21,386 

Total revenues

 $45,162  $22,903  $23,875  $24,063  $116,003 

 

(1) Revenues of $12,117 from GKE are included in the Sterilization and Disinfection Control division during the six months ended September 30, 2024. 

 

  

Six Months Ended September 30, 2023

 
  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $28,456  $18,732  $8,673  $1,295  $57,156 

Hardware and software

  201   7,901   5,166   13,962   27,230 

Services

  4,350   2,285   5,257   7,532   19,424 

Total revenues

 $33,007  $28,918  $19,096  $22,789  $103,810 

 

Revenues from external customers are attributed to individual countries based upon the locations to which the products are shipped or exported, or locations where services are performed, as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

United States

 $28,078  $27,073  $54,939  $53,610 

China

  7,390   7,529   13,949   13,642 

Other

  22,365   18,563   47,115   36,558 

Total revenues

 $57,833  $53,165  $116,003  $103,810 

 

Other than China, no foreign country exceeded 10% of total revenues for the three and six months ended September 30, 2024 and 2023.

 

Contract Balances

Our contracts have varying payment terms and conditions. Some customers prepay for products and services, resulting in unearned revenues or customer deposits, called contract liabilities. Short-term contract liabilities are included within unearned revenues in the accompanying unaudited Condensed Consolidated Balance Sheets, and long-term contract liabilities are included within other noncurrent liabilities in the accompanying unaudited Condensed Consolidated Balance Sheets. The significant majority of our revenues and related receivables and contract liabilities are generated from contracts with customers with original durations of 12 months or less. Contract liabilities will be recognized to revenue as we satisfy our obligations under the terms of the contracts. 

 

A summary of contract liabilities is as follows:

 

Contract liabilities as of March 31, 2024

 $15,686 

Prior year liabilities recognized in revenues during the six months ended September 30, 2024

  (6,802)

Contract liabilities added during the six months ended September 30, 2024, net of revenues recognized

  5,636 

Contract liabilities as of September 30, 2024

 $14,520 

 

 

Page 8
Table of Contents
 
 

Note 4. Fair Value Measurements

 

Our financial instruments consist primarily of cash and cash equivalents, trade accounts receivable, obligations under trade accounts payable, and debt. Due to their short-term nature, the carrying values for cash and cash equivalents, trade accounts receivable, and trade accounts payable approximate fair value; they are classified within Level 1 of the fair value hierarchy. 

 

The financial instruments that subject us to the highest concentration of credit risk are cash and accounts receivable. We maintain relationships and cash deposits at multiple banking institutions across the world in an effort to diversify and reduce risk of loss. Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sales. No customers accounted for more than 10% of total trade receivables as of September 30, 2024.

 

On April 5, 2024, we entered into separate, privately negotiated purchase agreements with a limited number of holders of our 1.375% convertible senior notes due  August 15, 2025 (the "Notes"), through which we repurchased $75,000 in aggregate principal amount of the Notes. See Note 7. "Indebtedness" for further information. As of September 30, 2024, we had remaining outstanding $97,500 aggregate principal amount of the Notes. We estimate the fair value of the Notes using Level 2 inputs based on the last actively traded price or observable market input preceding the end of the reporting period. The fair value of the Notes is approximately correlated to our stock price.

 

The estimated fair value and carrying value of the Notes were as follows:

 

  

September 30, 2024

  

March 31, 2024

 
  

Carrying Value

  

Fair Value (Level 2)

  

Carrying Value

  

Fair Value (Level 2)

 

Notes

 $97,029  $94,148  $171,198  $163,013 

 

The carrying amount of the term loan and revolving line of credit (together, the "Credit Facility") on the Condensed Consolidated Balance Sheets approximates fair value due to the variable interest rate pricing on the debt with the balance bearing an interest rate approximating current market rates.

 

We expect to pay approximately $9,700 (at  September 30, 2024 exchange rates) for the GKE holdback in April 2025. We estimate the discounted fair value of consideration held back to be approximately $9,400 as of September 30, 2024 based on Level 3 inputs from the acquisition, including discount rate estimates. We adjust the estimated fair value at each reporting period through earnings.

 

During fiscal year 2023, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“the Belyntic acquisition”). The Belyntic acquisition obligates us to pay contingent consideration of up to $1,500 cash upon regulatory approval of certain patent applications (see Note 11. "Commitments and Contingencies"), of which $750 has not yet been paid. We estimate the fair value of the remaining contingent consideration is $650, using Level 3 inputs and a probability-weighted outcome analysis based on our expectations of patent approval, leveraging our historical experience and expert input. 

 

Amounts recognized or disclosed at fair value in the unaudited condensed consolidated financial statements on a nonrecurring basis include the initial recognition and disclosure of most assets and liabilities purchased in business acquisitions and any related measurement period adjustments. Additionally, assets such as property and equipment, operating lease assets, goodwill and other intangible assets are adjusted to fair value if determined to be impaired. Fair values of such assets and liabilities require measurement using Level 3 inputs. We recorded no impairments during the three and six months ended September 30, 2024 or 2023. 

 

There were no transfers between the levels of the fair value hierarchy during the three months ended three and six months ended September 30, 2024.

 
 

Note 5. Supplemental Information

 

Inventories consisted of the following:

 

  

September 30, 2024

  

March 31, 2024

 

Raw materials

 $18,215  $18,335 

Work in process

  366   1,256 

Finished goods

  11,157   13,084 

Total inventories

 $29,738  $32,675 

 

Prepaid expenses and other current assets consisted of the following: 

 

  

September 30, 2024

  

March 31, 2024

 

Prepaid expenses

 $3,674  $2,932 

Deposits

  1,666   1,898 

Prepaid income taxes

  4,407   1,237 

Other current assets

  3,922   3,341 

Total prepaid expenses and other current assets

 $13,669  $9,408 

 

Accrued payroll and benefits consisted of the following:

 

  

September 30, 2024

  

March 31, 2024

 

Bonus payable

 $4,224  $3,838 

Wages and paid-time-off payable

  2,404   3,072 

Payroll related taxes

  2,029   1,956 

Other benefits payable

  528   1,069 

Total accrued payroll and benefits

 $9,185  $9,935 

 

Page 9
Table of Contents
 

Other accrued expenses consisted of the following: 

 

  

September 30, 2024

  

March 31, 2024

 

Accrued business taxes

 $5,908  $5,557 

Current operating lease liabilities

  3,488   2,986 

Income taxes payable

  1,386   1,615 

Current acquisition-related holdbacks

  9,891   436 

Other

  2,193   2,264 

Total other accrued expenses

 $22,866  $12,858 

 

The increase in other accrued expenses is primarily due to the reclassification of the held back GKE acquisition-related consideration from noncurrent liabilities.

 

Other noncurrent liabilities consisted of the following: 

 

  

September 30, 2024

  

March 31, 2024

 

Noncurrent operating lease liabilities

 $14,385  $6,613 

Noncurrent acquisition-related holdbacks

  160   8,792 

Other

  108   208 

Total other noncurrent liabilities

 $14,653  $15,613 

 

The increase in operating lease liabilities is primarily attributable to new a new right-of-use leased facility associated with the manufacturing and administrative office facilities used by our Biopharmaceutical Development division in Uppsala, Sweden.

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Depreciation expense in cost of revenues

 $904  $655  $1,766  $1,329 

Depreciation expense in operating expense

  614   256   1,156   496 

Total depreciation expense

 $1,518  $911  $2,922  $1,825 

 

The increase in depreciation expense for the three and six months ended September 30, 2024 is primarily due to GKE's operations, which included $321 and $625 of depreciation expense, respectively. 
 

Note 6. Goodwill and Intangible Assets, Net

 

Finite-lived intangible assets consisted of the following:

 

  

September 30, 2024

  

March 31, 2024

 
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 

Customer relationships

 $194,931  $(113,003) $81,928  $189,911  $(104,528) $85,383 

Other intangibles

  62,320   (35,425)  26,895   61,161   (32,792)  28,369 

Total finite-lived intangible assets

 $257,251  $(148,428) $108,823  $251,072  $(137,320) $113,752 

 

Amortization expense for finite-lived intangible assets was as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Amortization in cost of revenues

 $672  $1,756  $1,319  $3,484 

Amortization in general and administrative

  3,878   5,429   7,292   10,921 

Total amortization expense

 $4,550  $7,185  $8,611  $14,405 

 

For the following fiscal years ending March 31, amortization expense is estimated as follows, based on foreign currency exchange rates as of September 30, 2024:

 

Fiscal Year

 Amortization Expense 
  

Remainder of 2025

 $9,118 

2026

  17,586 

2027

  16,915 

2028

  16,301 

2029

  15,729 

  

Page 10
Table of Contents
 

The change in the carrying amount of goodwill was as follows:

 

  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 

March 31, 2024

 $79,430  $16,940  $46,515  $37,211   180,096 

Effect of foreign currency translation

  1,979   116   1,530   32   3,657 

September 30, 2024

 $81,409  $17,056  $48,045  $37,243  $183,753 

 
 

Note 7. Indebtedness

 

Credit Facility

On  March 5, 2021, we entered into a four-year senior secured credit agreement that included 1) a revolving credit facility with an aggregate principal amount of up to $75,000 (the "Revolver"), 2) a swingline loan with an aggregate principal amount not exceeding $5,000, and 3) letters of credit with an aggregate stated amount not exceeding $2,500 at any time. The agreement also provided for an incremental term loan or an increase in revolving commitments with a minimum aggregate principal amount of $25,000 and a maximum amount of $75,000, subject to the satisfaction of certain conditions and lender considerations. We refer to the agreement in whole as the “Credit Facility.”

 

On  October 5, 2023, we amended the terms of the Credit Facility to increase the maximum principal amount available to us under the Revolver from $75,000 to $125,000. 

 

On  April 5, 2024, we further amended and restated the terms of the Credit Facility to:

 

(i)

Extend the maturity of the Credit Facility to  April 2029; 

(ii)

Allow proceeds from the Credit Facility to be used to redeem some or all of the Company’s 2025 Notes;

(iii)

Include a $75,000 senior secured term loan facility (the “Term Loan”), which is subject to principal amortization payments; and

(iv)

Make certain changes to the financial covenants.

 

In conjunction with the amendment and restatement of the Credit Facility during the six months ended September 30, 2024, we incurred $1,987 of customary lender fees and debt issuance costs paid to third parties, of which $1,242 is related to the Revolver and $745 is related to the Term Loan. The fees are being amortized to interest expense through maturity. 

 

Amounts borrowed under the Credit Facility bear interest at either a base rate or a SOFR rate plus an applicable spread ranging from 1.5% to 3.5%, depending on our total net leverage ratio. The interest rate on borrowings under our line of credit as of  September 30, 2024 was 8.4%.

 

The financial covenants in the Credit Facility as amended include a maximum leverage ratio of 4.50 to 1.00 for the first five testing dates on which amounts under the Revolver are outstanding; 4.0 to 1.0 on each of the sixth, seventh, eighth, and ninth testing dates; and 3.5 to 1.0 on each testing date following the ninth testing date. The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to 1.0 and a minimum senior net leverage ratio of 3.5 to 1. Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes to our business as defined in the contract, engage in certain transactions with affiliates, or conduct asset sales. As of  September 30, 2024, we were in compliance with all covenants under the Credit Facility.

 

Term Loan

We borrowed $75,000 under the Term Loan on  April 5, 2024, to fund the privately negotiated repurchases of a portion of the Notes (see “Convertible Notes” below). During the three and six months ended September 30, 2024, we made required quarterly principal payments on the Term Loan of $937 and $1,875, respectively. 

 

We are required to make quarterly principal payments on the Term Loan. For the following fiscal years ending March 31, debt payments on the Term Loan are required as follows:

 

Fiscal Year

 

Amount

 

Remainder of 2025

 $1,875 

2026

  3,750 

2027

  5,625 

2028

  5,625 

2029

  7,500 

Thereafter

  48,750 

Total Principal Remaining

 $73,125 

 

The net carrying amount of the Term Loan was as follows:

 

  

September 30, 2024

  

March 31, 2024

 

Term Loan (8.4% as of September 30, 2024)

 $73,125  $- 

Less: discount and debt issuance costs

  (672)  - 

Less: current portion

  (3,750)  - 

Noncurrent portion

 $68,703  $- 


The effective interest rate on the Term Loan at the time of borrowing was 8.13%.

 

Page 11
Table of Contents
 

Revolver

As of  September 30, 2024, the outstanding balance under the Revolver was $35,500 and $89,500 was available for borrowing. Subsequent to  September 30, 2024, we repaid an additional $4,500 on the Revolver. 

 

We are obligated to pay quarterly unused commitment fees of between 0.20% and 0.35% of the Revolver’s aggregate principal amount, based on our leverage ratio.

 

The balance of unamortized customary lender fees related to the Revolver, including fees from the original debt issuance and all subsequent amendments and restatements, was $1,353 and $321 as of  September 30, 2024 and  March 31, 2024, respectively.

 

Convertible Notes 

On August 12, 2019, we issued an aggregate principal amount of $172,500 of Notes. The net proceeds from the Notes, after deducting underwriting discounts and commissions and other related offering expenses payable by us, were approximately $167,056. The Notes mature on August 15, 2025, unless earlier repurchased or converted, and bear interest at a rate of 1.375% payable semi-annually in arrears on February 15 and August 15 each year. The Notes are initially convertible, subject to certain conditions, at a conversion rate of 3.5273 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $283.50 per share of common stock. 

 

On April 5, 2024, we entered into separate, privately negotiated transactions with certain holders of the Notes to repurchase $75,000 aggregate principal amount of the Notes for an aggregate repurchase price of $71,250 in cash, plus accrued and unpaid interest of $160. We accounted for the partial repurchase of the Notes as a debt extinguishment, which resulted in the recognition of a gain on extinguishment of $3,197 in other income on the Condensed Consolidated Statements of Operations during the six months ended September 30, 2024. As of September 30, 2024, $97,500 in aggregate principal amount of the Notes remained outstanding, which we intend to pay using a combination of cash on hand and a draw on our Revolver.

 

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock. The circumstances necessary for conversion were not met during the three or six months ended  September 30, 2024. The Notes will become convertible at any time from, and including, April 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date. As of September 30, 2024, the Notes were classified as a current liability on our Condensed Consolidated Balance Sheets. The if-converted value of the Notes did not exceed the principal balance as of  September 30, 2024.

 

The net carrying amount of the Notes was as follows:

 

  

September 30, 2024

  

March 31, 2024

 

Principal outstanding

 $97,500  $172,500 

Unamortized debt issuance costs

  (471)  (1,302)

Net carrying value

 $97,029  $171,198 

 

We recognized interest expense on the Notes as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Coupon interest expense at 1.375%

 $335  $593  $702  $1,186 

Amortization of debt issuance costs

  133   231   278   461 

Total interest and amortization of debt issuance costs

 $468  $824  $980  $1,647 

 

The effective interest rate on the Notes is approximately 1.9%.

 
 

Note 8. Stockholders' Equity

 

Stock-Based Compensation

During the six months ended September 30, 2024, we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the Mesa Laboratories, Inc. Amended and Restated 2021 Equity Incentive Plan, which authorizes the issuance of 660 shares of common stock to eligible participants. Stock-based compensation expense is included in cost of revenues, selling, general and administrative, and research and development expense in the accompanying unaudited Condensed Consolidated Statements of Operations.

 

The following is a summary of RSU and PSU award activity for the six months ended September 30, 2024:

 

  

Time-Based Restricted Stock Units

  

Performance-Based Restricted Stock Units

 
  

Number of Shares

  

Weighted- Average Grant Date Fair Value per Share

  

Number of Shares

  

Weighted- Average Grant Date Fair Value per Share

 

Outstanding as of March 31, 2024

  76  $157.83   56  $240.96 

Awards granted(1)

  111   93.05   41   102.57 

Awards forfeited

  (4)  137.89   

-

   - 

Awards distributed

  (34)  165.50   -   - 

Outstanding as of September 30, 2024

  149  $108.40   97  $181.85 

 

(1)

Balances for PSUs granted are reflected at target.

 

Page 12
Table of Contents
 

Outstanding time-based RSUs vest and settle in shares of our common stock on a one-for-one basis. The majority of RSUs granted to employees during the six months ended September 30, 2024 vest in equal installments on the first, second, and third anniversaries of the grant date. RSUs granted to non-employee directors during the six months ended September 30, 2024 vest one year from the grant date. We generally recognize the expense relating to RSUs, net of estimated forfeitures, on a straight-line basis over the vesting period.

 

We grant PSUs to certain key employees. The number of shares earned is determined at the end of each performance period based on Mesa's achievement of certain pre-defined targets per the related award agreement. The outstanding PSUs vest upon completion of the service period described in the award agreement. We recognize the expense relating to the performance-based RSUs based on the probable outcome of achievement of the performance targets on a straight-line basis over the service period. 

 

During the six months ended September 30, 2024, the Compensation Committee of the Board of Directors created a plan to award 41 PSUs at target (“the FY25 PSUs”) to eligible employees. Of the 41 PSUs granted, 23 PSUs have a grant date fair value of $89.82 and are subject to service and company financial performance conditions. The financial performance measurement period is from April 1, 2024 through March 31, 2027. The remaining 18 PSUs have a grant date fair value of $119.54 and are subject to service and market conditions, with the market performance period measured from June 18, 2024 through June 18, 2027. The service period for all of the FY25 PSUs is from June 18, 2024 through June 18, 2027. The quantity of shares that will be earned based upon either company financial performance or market performance will range from 0% to 200% of the targeted number of shares; if the defined minimum targets are not met, then no shares will vest.

 

The following is a summary of stock option award activity for the six months ended September 30, 2024:

 

  

Stock Options

 
  

Shares Subject to Options

  

Weighted- Average Exercise Price per Share

  

Weighted-Average Remaining Contractual Life (Years)

  

Aggregate Intrinsic Value

 

Outstanding as of March 31, 2024

  194  $181.89   3.2  $26 

Awards granted

  -   -         

Awards forfeited or expired

  (14)  147.90         

Awards exercised

  -   -         

Outstanding as of September 30, 2024

  180  $184.42   2.9  $229 

 
 

Note 9. Earnings (Loss) Per Share

 

The following table presents a reconciliation of the denominators used in the computation of basic and diluted earnings (loss) per share:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income (loss) available for shareholders

 $3,428  $(1,230) $6,816  $(1,779)

Weighted average outstanding shares of common stock

  5,413   5,387   5,405   5,379 

Dilutive effect of RSUs

  58   -   43   - 

Fully diluted shares

  5,471   5,387   5,448   5,379 
                 

Basic earnings (loss) per share

 $0.63  $(0.23) $1.26  $(0.33)

Diluted earnings (loss) per share

 $0.63  $(0.23) $1.25  $(0.33)

 

Potentially dilutive securities include stock options and both time and performance based RSUs (collectively "stock awards"), as well as common shares underlying our Notes. Stock awards are excluded from the calculation of diluted EPS if they are subject to performance conditions that have not yet been achieved or if they are antidilutive. Diluted EPS does not consider the impact of potentially dilutive securities in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect in such cases.

 

The following stock awards were excluded from the calculation of diluted EPS:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Assumed conversion of the Notes

  344   608   358   608 

Stock awards that were anti-dilutive

  218   282   213   255 

Total stock awards excluded from diluted EPS

  562   890   571   863 

 

Shares underlying the Notes were excluded from the diluted EPS calculation for the three and six months ended September 30, 2024 and 2023 as the impact of the assumed conversion of the Notes calculated under the if-converted method was antidilutive. The decrease in assumed conversion of the Notes is related to the partial repayment of the Notes that occurred during the six months ended September 30, 2024 (see Note 7. "Indebtedness").

Table of Contents
 

 
 

Note 10. Income Taxes

 

We reported an income tax provision as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Income tax expense (benefit)

 $384  $(95) $901  $(483)
Effective tax rate  10.1%  7.2%  11.7%  21.4%

 

Page 13
Table of Contents
 

For interim income tax reporting, we estimate our annual effective tax rate and apply this effective tax rate to our year-to-date pre-tax income. Each quarter, our estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. Additionally, the tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur. There is a potential for volatility in the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which they relate, changes in tax laws and foreign tax holidays, settlement with taxing authorities, and foreign currency fluctuations.

 

The change in the effective tax rate for both the three and six months ended September 30, 2024 compared to the prior year periods is primary due to the valuation allowance established on the US deferred taxes during fiscal year 2024. The effective tax rate for both the three and the six months ended September 30, 2024 differed from the statutory federal rate of 21% primarily due to the valuation allowance established on the US deferred taxes during fiscal year 2024.

 

 

Note 11. Commitments and Contingencies

 

We are party to various legal proceedings arising in the ordinary course of business. As of  September 30, 2024, we are not party to any legal proceeding that management believes could have a material adverse effect on our unaudited consolidated financial position, results of operations, or cash flows. 

 

We expect to pay approximately $9,700 (at  September 30, 2024 exchange rates) for the GKE holdback in April 2025, pending adjustments for potential indemnification losses that  may arise. The liability is recorded at its discounted fair value of $9,400 in other accrued expenses on our unaudited Condensed Consolidated Balance Sheets as of September 30, 2024. 

 

As part of the Belyntic acquisition, we agreed to pay the sellers a contingency based upon approval of contractually specified patents. The estimated fair value of the probable remaining contingent consideration was $650 as of  September 30, 2024.

 
 

Note 12. Segment Information

 

The following tables set forth our segment information:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Revenues (a):

                

Sterilization and Disinfection Control (b)

 $22,205  $17,080  $45,162  $33,007 

Clinical Genomics

  11,499   15,549   22,903   28,918 

Biopharmaceutical Development

  11,867   9,207   23,875   19,096 

Calibration Solutions

  12,262   11,329   24,063   22,789 

Total revenues

 $57,833  $53,165  $116,003  $103,810 
                 

Gross profit:

                

Sterilization and Disinfection Control (b)

 $15,172  $12,476  $30,730  $24,067 

Clinical Genomics

  5,906   7,727   12,396   14,455 

Biopharmaceutical Development

  7,167   5,509   15,126   11,942 

Calibration Solutions

  7,210   6,407   14,452   12,838 

Reportable segment gross profit

  35,455   32,119   72,704   63,302 

Corporate and other (c)

  -   (10)  -   (10)

Gross profit

 $35,455  $32,109  $72,704  $63,292 
                 

Reconciling items:

                

Operating expense

  31,947   32,169   63,616   64,016 

Operating income (loss)

  3,508   (60)  9,088   (724)

Nonoperating expense, net

  (304)  1,265   1,371   1,538 

Earnings (loss) before income taxes

 $3,812  $(1,325) $7,717  $(2,262)

 

 

(a)

Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.

 

(b)

Includes post-acquisition GKE results during the three and six months ended September 30, 2024.

 (c)Unallocated corporate expenses are reported within corporate and other. 

 

The following table sets forth inventories by reportable segment. Our chief operating decision maker is not provided with and does not regularly review any other segment asset information.

 

  

September 30,

  

March 31,

 
  

2024

  

2024

 

Sterilization and Disinfection Control

 $5,920  $7,014 

Clinical Genomics

  11,459   11,813 

Biopharmaceutical Development

  6,001   6,304 

Calibration Solutions

  6,358   7,544 

Total inventories

 $29,738  $32,675 

 

Page 14
Table of Contents
 
 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Dollars in thousands, except per share amounts)

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements in this Quarterly Report on Form 10-Q do not constitute guarantees of future performance. Investors are cautioned that statements in this Quarterly Report on Form 10-Q which are not strictly historical statements, including, without limitation, express or implied statements or guidance regarding current or future financial performance and position; results of acquisitions; management’s strategy, plans and objectives for future operations or acquisitions, product development and sales; and adequacy of capital resources and financing plans constitute forward-looking statements. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which the Company operates, and management’s beliefs and assumptions. In addition, other written and oral statements that constitute forward-looking statements may be made by the Company or on the Company’s behalf. Words such as “seek,” “believe,” “may,” “intend,” “could,” “target,” “expect,” “anticipate,” “plan,” “estimate,” “project,” or variations of such words and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including risks associated with: our ability to successfully grow our business, including as a result of acquisitions; the effect that acquisitions have on our operations; our ability to consummate acquisitions at our historical rate and at appropriate prices, and our ability to effectively integrate acquired businesses and achieve desired results; the market acceptance of our products; technological or market viability of our products; reduced demand for our products, including as a result of competitive factors; conditions in the global economy and the particular markets we serve; significant developments or uncertainties stemming from governmental actions, including changes in trade policies and medical device regulations; the timely development and commercialization, and customer acceptance, of enhanced and new products and services; retirement of old products and customer migration to new products; the potential inaccuracy of projections of revenues, growth, operating results, profit margins, earnings, expenses, margins, tax rates, tax provisions, liquidity, cash flows, demand, and competition; the effects of additional actions taken to become more efficient or lower costs; supply chain challenges; cost pressures; laws regulating fraud and abuse in the health care industry and the privacy and security of health and personal information; product liability; information security; outstanding claims, legal and regulatory proceedings; international business challenges including anti-corruption and sanctions laws and political developments; tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; general economic, industry, and capital markets conditions; the timing of any of the foregoing; and assumptions underlying any of the foregoing. Such risks and uncertainties also include those listed in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2024 and in this report. The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements. We disclaim any obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. 

 

Overview

 

We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and Asia Pacific, and by independent distributors in these areas as well as throughout the rest of the world. We prefer markets in which we can establish a strong presence and achieve high gross profit margins. 

 

As of September 30, 2024, we managed our operations in four reportable segments, or divisions: Sterilization and Disinfection Control, Clinical Genomics, Biopharmaceutical Development, and Calibration Solutions. Each of our divisions is described further in "Results of Operations" below. Unallocated corporate expenses and other business activities are reported within Corporate and Other.

 

Corporate Strategy

We strive to create stakeholder value and further our purpose of Protecting the Vulnerable® by growing our business both organically and through acquisitions, by improving our operating efficiency, and by continuing to hire, develop and retain top talent. As a business, we commit to our purpose of Protecting the Vulnerable® every day by taking a customer-focused approach to developing, building, and delivering our products. We serve a broad set of industries, in particular the pharmaceutical, healthcare services, and medical device verticals, in which the safety, quality, and efficacy of products is critical, by delivering the highest quality products possible. We are committed to protecting the communities we serve.

 

Organic Revenues Growth

Organic revenues growth is driven by the expansion of our customer base, increases in sales volumes, new product offerings, and price increases, and may be affected positively or negatively by changes in foreign currency rates. Our ability to increase organic revenues is affected by general economic conditions, both domestic and international, customer capital spending trends, competition, and the introduction of new products. Our policy is to price our products competitively and, where possible, we pass along cost increases to our customers in order to maintain our margins. We typically evaluate costs and pricing annually, with price increases effective January 1.

 

Inorganic Growth - Acquisitions

Over the past decade, we have consummated a number of acquisitions as part of our growth strategy. These acquisitions have allowed us to expand our product offerings and the industries we serve, globalize our company, and increase the scale at which we operate. In turn, this growth affords us the ability to improve our operating efficiency, extend our customer base, and further the pursuit of our purpose: Protecting the Vulnerable®.

 

Improving Our Operating Efficiency

Our ongoing goal is to maximize value in our existing businesses and those we acquire by implementing efficiencies in our manufacturing, commercial, engineering, and administrative operations. We achieve efficiencies using the four pillars that make up the Mesa Way, which is our customer-centric, lean-based system for continuously improving and operating the manufacturing and administrative aspects of our high-margin, niche businesses. The Mesa Way is focused on: "Measuring What Matters" using our customers' perspective and setting high standards for performance; "Empowering Teams" to improve operationally and exceed customer expectations; "Sustainably Improving" using lean-based tools designed to help us identify and prioritize the biggest opportunities; and "Always Learning" so that performance continuously improves. 

 

Page 15
Table of Contents

 

Gross profit is affected by many factors including our product mix, foreign currency rates, manufacturing efficiencies, costs of products and labor, and price competition. Historically, as we have integrated our acquisitions and taken advantage of manufacturing efficiencies, our gross profit percentages for some products have improved. There are, however, differences in gross profit percentages between product lines, and ultimately our mix of revenues will continue to impact our overall gross profit.

 

Hire, Develop, and Retain Top Talent

At the center of our organization are talented people who are capable of taking on new challenges using a team approach. Indeed, it is our exceptionally talented workforce that works together and uses our lean-based tool set to find ways to continuously and sustainably improve our products, our services, and ourselves, resulting in long-term value creation for our stakeholders. 

 

General Trends

We are a global company with multinational operations. During the six months ended September 30, 2024, approximately 53% of our revenues were earned outside of the United States. We face both opportunities and challenges resulting from our geographic and industry diversity, such as varied economic environments across served geographies, technology changes in served markets, opportunities in high-growth markets, the impact of foreign currency movements against the U.S. dollar ("USD"), changes in trends and costs of a global labor force, and increasing regulation. Continued growth of our revenue will depend on our ability to (i) continue commercial efforts to expand business with new and existing customers, (ii) identify, consummate, and integrate acquisitions successfully, and (iii) develop or purchase differentiated products and services. We maintain our profitability by improving the effectiveness of our sales forces, continuing to pursue cost reduction initiatives, and improving our operating efficiency.  

 

During the first half of fiscal year 2025, our revenues increased 11.7%, versus the comparable prior year period, primarily driven by revenues of $12,117 from GKE, which we acquired in the third quarter of fiscal year 2024. Organic revenues increased 0.1% during the first half of fiscal year 2025 primarily as a result of 25.0% organic revenues growth from our Biopharmaceutical Development division, and to a lesser extent organic revenues increases of 5.6% from our Calibration Solutions division. Our Biopharmaceutical Development division, in particular, benefited from an improved environment for capital equipment purchases in the biopharmaceutical vertical. Organic revenues in our Clinical Genomics business declined 20.8% as we continue to experience challenges from the economic slowdown in China and regulatory challenges that are impacting sales of new Clinical Genomics instruments in the United States. However, the Clinical Genomics division's revenues have increased sequentially in both the first and second quarters of fiscal year 2025.

 

Gross profit as a percentage of revenues increased 1.7 percentage points in the first half of fiscal year 2025 compared to the first half of fiscal year 2024, primarily attributable to lower amortization of intangible expenses flowing through cost of revenues as a result of the Clinical Genomics intangible asset impairment charge recorded in the fourth quarter of fiscal year 2024 and margin contribution of 62.3% from the GKE acquisition, including $1,232 of non-cash inventory step up amortization.

 

Operating expenses declined slightly during the first half of fiscal year 2025 versus the comparable prior year period, despite an 11.7% increase in revenues. Operating expenses incurred by GKE during the six months ended September 30, 2024 were offset by lower amortization expense as we impaired a portion of the intangible assets held by the Clinical Genomics division in fiscal year 2024. The weakening of the USD increased reported expenses incurred in Europe, but despite foreign currency headwinds, operating income was $9,088, an increase of $9,812 versus the comparable prior year period. Additionally, we recorded about $900 more for bonuses in the first six months of fiscal year 2025 versus the comparable prior year period due to improved performance. GKE contributed $4,533 to our consolidated operating income during the first half of fiscal year 2025. 

 

A weakening or strengthening of foreign currencies against the USD increases or decreases our reported revenues, gross profit margins, and operating expenses, and impacts the comparability of our results between periods. 

 

Results of Operations

 

Our results of operations and period-over-period changes are discussed in the following section. The tables and discussion below should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto appearing in Item 1. Financial Statements (in thousands, except percent data).

 

Results by reportable segment are as follows:

 

   

Revenues

    

Organic Revenues Growth (non-GAAP) (a)

    

Gross Profit as a % of Revenues

  
    Three Months Ended September 30,     Three Months Ended September 30,     Three Months Ended September 30,  
   

2024

    

2023

    

2024

    

2023

    

2024

    

2023

  

Sterilization and Disinfection Control

   $ 22,205     $ 17,080       (4.3 %)     0.7 %     68.3 %     73.0 %

Clinical Genomics

     11,499       15,549       (26.0 %)     (15.7 %)     51.4 %     49.7 %

Biopharmaceutical Development

     11,867       9,207       28.9 %     (24.4 %)     60.4 %     59.8 %

Calibration Solutions

     12,262       11,329       8.2 %     1.1 %     58.8 %     56.6 %

Mesa's reportable segments

   $ 57,833     $ 53,165       (2.2 %)     (9.6 %)     61.3 %     60.4 %

 

   

Revenues

    

Organic Revenues Growth (non-GAAP) (a)

    

Gross Profit as a % of Revenues

  
    Six Months Ended September 30,     Six Months Ended September 30,     Six Months Ended September 30,  
   

2024

    

2023

    

2024

    

2023

    

2024

    

2023

  

Sterilization and Disinfection Control

   $ 45,162     $ 33,007       0.1 %     4.0 %     68.0 %     72.9 %

Clinical Genomics

     22,903       28,918       (20.8 %)     (12.2 %)     54.1 %     50.0 %

Biopharmaceutical Development

     23,875       19,096       25.0 %     (17.8 %)     63.4 %     62.5 %

Calibration Solutions

     24,063       22,789       5.6 %     6.4 %     60.1 %     56.3 %

Mesa's reportable segments

   $ 116,003     $ 103,810       0.1 %     (5.0 %)     62.7 %     61.0 %

 

(a)   Organic revenues growth is a non-GAAP measure of financial performance. See "Non-GAAP Measures" below for further information and for a reconciliation of organic revenues growth to total revenues growth. 

 

Page 16
Table of Contents

 

Our unaudited condensed consolidated results of operations are as follows:

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Revenues

   $ 57,833     $ 53,165       8.8 %   $ 116,003     $ 103,810       11.7 %

Gross profit

     35,455       32,109       10.4 %     72,704       63,292       14.9 %

Operating expense

     31,947       32,169       (0.7 %)     63,616       64,016       (0.6 %)

Operating income (loss)

     3,508       (60 )     5,946.7 %     9,088       (724 )     1,355.2 %

Net income (loss)

   $ 3,428     $ (1,230 )     378.7 %   $ 6,816     $ (1,779 )     483.1 %

 

Reportable Segments

 

Sterilization and Disinfection Control

Our Sterilization and Disinfection Control division manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization, decontamination, disinfection and cleaning processes in the pharmaceutical, medical device, and healthcare industries. The division also provides testing and laboratory services, mainly to the dental and pharmaceutical industries. Sterilization and Disinfection Control products are disposable and are used on a routine basis.

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Revenues

   $ 22,205     $ 17,080       30.0 %   $ 45,162     $ 33,007       36.8 %

Gross profit

     15,172       12,476       21.6 %     30,730       24,067       27.7 %

Gross profit as a % of revenues

     68.3 %     73.0 %    

(4.7 pt)

       68.0 %     72.9 %    

(4.9 pt)

  

 

The Sterilization and Disinfection Control division's revenues increased 30.0% and 36.8% for the three and six months ended September 30, 2024, respectively versus the comparable prior year periods. The GKE acquisition contributed inorganic revenues of $5,863 and $12,117 for the three and six months ended September 30, 2024, respectively. Organic revenues declined 4.3% for the three months ended September 30, 2024 and increased 0.1% for the six months ended September 30, 2024. Strong commercial execution that resulted in organic revenues growth in the first quarter of fiscal year 2025 and significant orders growth of 6% in the first half of the fiscal year excluding GKE was largely offset by lower than expected order fulfillments. However, the past due backlog for the division has increased and is expected to be fulfilled over the next two quarters. We anticipate positive organic revenues growth in the Sterilization and Disinfection Control division in fiscal year 2025.

 

The Sterilization and Disinfection Control division's gross profit percentage decreased 4.7 percentage points and 4.9 percentage points for the three and six months ended September 30, 2024, respectively, versus the comparable prior year periods. The three and six months ended September 30, 2024 includes $588 and $1,476, respectively, of both amortization of GKE’s intangible assets and amortization of non-cash inventory step-up, which affect the comparability of gross margins as a percentage of revenues. There will be no further charges for the inventory step up. Excluding these non-cash charges from purchase accounting, the Sterilization and Disinfection Control division’s margin decreased 2.1 percentage points and 1.6 percentage points for the three and six months ended September 30, 2024, respectively. Beginning in the third quarter of fiscal year 2025, when the inventory step up is no longer being amortized through cost of revenues, we expect GKE's gross profit percentage will be in the low 70s. 

 

Clinical Genomics

The Clinical Genomics division develops, manufactures and sells highly sensitive, low-cost, high-throughput genetic analysis tools and related consumables and services that enable clinical research labs and contract research organizations to perform genomic testing for a broad range of research applications in several therapeutic areas, such as screenings for hereditary diseases, pharmacogenetics, oncology related applications, and toxicology research.

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Revenues

   $ 11,499     $ 15,549       (26.0 %)   $ 22,903     $ 28,918       (20.8 %)

Gross profit

     5,906       7,727       (23.6 %)     12,396       14,455       (14.2 %)

Gross profit as a % of revenues

     51.4 %     49.7 %    

1.7 pt

       54.1 %     50.0 %    

4.1 pt

  

 

The Clinical Genomics division's revenues decreased 26.0% and 20.8% for the three and six months ended September 30, 2024 versus the comparable prior year periods. The decrease for the three and six months ended September 30, 2024 was primarily due to decreases in revenues from consumables, and to a lesser extent, new systems in China as a result of China's economic slowdown and anti-corruption initiatives, which began to significantly impact us during the third quarter of fiscal year 2024. Decreased instrument sales in the United States due to increased regulation of lab-developed tests further contributed to decreased revenues. 

 

Gross profit percentage for the Clinical Genomics division increased 1.7 and 4.1 percentage points for the three and six months ended September 30, 2024 versus the comparable prior year periods, primarily due to lower intangibles amortization expense as a result of an impairment charge recorded in the fourth quarter of fiscal year 2024. Excluding the impact of amortization expense, gross profit as a percentage of revenues would have decreased 5.8 and 4.0 percentage points for the three and six months ended September 30, 2024, respectively, primarily as a result of lower revenues on a partially fixed cost base as well as realizing lower margins on certain strategic instrument sales into our APAC region that we expect will increase our consumables sales in the future. 

 

Biopharmaceutical Development

Our Biopharmaceutical Development division develops, manufactures, and sells automated systems for protein analysis (immunoassays) and peptide synthesis solutions. Immunoassays and peptide synthesis solutions accelerate the discovery, development, and manufacture of biotherapeutic therapies, among other applications. 

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Revenues

   $ 11,867     $ 9,207       28.9 %   $ 23,875     $ 19,096       25.0 %

Gross profit

     7,167       5,509       30.1 %     15,126       11,942       26.7 %

Gross profit as a % of revenues

     60.4 %     59.8 %    

0.6 pt

       63.4 %     62.5 %    

0.9 pt

  

 

Page 17
Table of Contents

 

The Biopharmaceutical Development division's revenues increased 28.9% and 25.0% for the three and six months ended September 30, 2024 versus the comparable prior year periods, primarily due to increased capital spending in the biopharmaceutical markets. Revenues from hardware and software sales increased 108.8% and 93.7% for the three and six months ended September 30, 2024, respectively, versus the comparable prior year periods.

 

For the three and six months ended September 30, 2024, gross margin as a percentage of revenues for the Biopharmaceutical Development division increased slightly as a result of favorable product mix, as well as increased revenues on a partially fixed cost base. 

 

Calibration Solutions

The Calibration Solutions division develops, manufactures and sells quality control products using principles of advanced metrology to measure or calibrate critical chemical or physical parameters in various dialysis, process monitoring, instrument monitoring, environmental monitoring, gas flow, environmental air quality, and torque applications, primarily in medical device manufacturing, pharmaceutical manufacturing, laboratory, and hospital environments.

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Revenues

   $ 12,262     $ 11,329       8.2 %   $ 24,063     $ 22,789       5.6 %

Gross profit

     7,210       6,407       12.5 %     14,452       12,838       12.6 %

Gross profit as a % of revenues

     58.8 %     56.6 %    

2.2 pt

       60.1 %     56.3 %    

3.8 pt

  

 

The Calibration Solutions division's revenues increased 8.2% and 5.6%, respectively, for the three and six months ended September 30, 2024 versus the comparable prior year period, primarily due to commercial efforts and increases in prices, particularly in our Renal Care product lines. 

 

The Calibration Solutions division's gross profit percentage increased 2.2 and 3.8 percentage points for the three and six months ended September 30, 2024, respectively, versus the comparable prior year period, primarily due to increased revenues on a partially-fixed cost base and favorable product mix.

 

Operating Expense

 

Operating expense decreased 0.7% and 0.6% for the three and six months ended September 30, 2024, respectively, versus the comparable prior year period. Increases in operating expenses from GKE's operations were offset by lower amortization of intangible assets as a result of the Clinical Genomics impairment charge recorded in the fourth quarter of fiscal year 2024. 

 

Selling Expense

Selling expense is driven primarily by labor costs, including salaries and commissions; accordingly, it may vary with sales levels.

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Selling expense

   $ 9,849     $ 9,650       2.1 %   $ 19,965     $ 18,626       7.2 %

As a percentage of revenues

     17.0 %     18.2 %    

(1.2 pt)

       17.2 %     17.9 %    

(0.7 pt)

  

 

Selling expense for the three and six months ended September 30, 2024 increased 2.1% and 7.2%, respectively, versus the comparable prior year periods. The increase is primarily attributable to sales and marketing costs from GKE and higher commissions as revenues increased.

 

General and Administrative Expense

Labor costs, non-cash stock-based compensation and non-cash amortization of intangible assets drive the substantial majority of our general and administrative expense.

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

General and administrative expense

   $ 17,464     $ 17,526       (0.4 %)   $ 34,282     $ 35,586       (3.7 %)

As a percentage of revenues

     30.2 %     33.0 %    

(2.8 pt)

       29.6 %     34.3 %    

(4.7 pt)

  

 

General and administrative expenses decreased 0.4% and 3.7% for the three and six months ended September 30, 2024, respectively, versus the comparable prior year period, largely due to the decrease of amortization of intangible assets due to an impairment charge recorded in the fourth quarter of fiscal year 2024. Excluding amortization expense, general and administrative expense would have increased 12.3% for the three months ended September 30, 2024, primarily as a result of GKE's general and administrative expenses as well as higher non-cash stock-based compensation expense. Excluding amortization expense, for the six months ended September 30, 2024, general administrative costs would have increased 9.4%, primarily as a result of general and administrative costs from GKE and costs associated with integrating GKE into our enterprise resource planning tool.   

 

Research and Development Expense

Research and development expense is predominantly comprised of labor costs and costs of third-party consultants.

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Research and development expense

   $ 4,634     $ 4,993       (7.2 %)   $ 9,369     $ 9,804       (4.4 %)

As a percentage of revenues

     8.0 %     9.4 %    

(1.4 pt)

       8.1 %     9.4 %    

(1.3 pt)

  

 

Research and development expenses decreased 7.2% and 4.4% for the three and six months ended September 30, 2024, respectively, versus the comparable prior year periods. We undertook cost containment efforts during fiscal year 2024, which included recording severance. Lower costs in the three and six months ended September 30, 2024 were a result of lower headcount, no severance charges, and reduced research and development supplies purchases.

 

Page 18
Table of Contents

 

Nonoperating (Income) Expense, Net 

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Interest expense and amortization of debt issuance costs

   $ 3,018     $ 905       233.5 %   $ 5,860     $ 1,953       200.1 %

(Gain) on extinguishment of convertible senior notes

     -       -       N/A       (3,197 )     -       N/A  

Other (income) expense, net

     (3,322 )     360       (1,022.8 %)     (1,292 )     (415 )     211.3 %

Nonoperating (income) expense, net

   $ (304 )   $ 1,265       (124.0 %)   $ 1,371     $ 1,538       (10.9 %)

 

Nonoperating expense, net for the six months ended September 30, 2024 is composed primarily of a $3,197 gain recorded related to the partial extinguishment of the Notes during the first quarter of fiscal year 2025. The gain represents the difference between the fair value and the carrying value of the Notes and any unamortized debt issuance costs at the time of settlement. The gain on the extinguishment was offset by the combination of interest expense and debt issuance costs, and gains and losses on foreign currency transactions. 

 

We incurred significantly more interest expense during the three and six months ended September 30, 2024 versus the comparable prior year period as we re-financed our Credit Facility during the first quarter of fiscal year 2025 in order to repurchase a portion of the Notes. We had $107,953 outstanding under our Credit Facility as of September 30, 2024, net of discounts on the Term Loan, and $0 outstanding under our Credit Facility as of September 30, 2023. The interest rate on our Credit Facility is variable, but was approximately 7.0 percentage points higher than the fixed-rate interest on the Notes during the first half of fiscal year 2025.

 

During the third quarter of fiscal year, Mesa issued an intercompany loan denominated in USD to our wholly owned subsidiary, Mesa Germany GmbH, to purchase GKE. Nonoperating income increased for the three and six months ended September 30, 2024 as we recorded net unrealized gains on foreign currency resulting from the weakening of the USD against the euro.

 

Income Taxes

 

   

Three Months Ended September 30,

    

Total

    

Six Months Ended September 30,

    

Total

  
   

2024

    

2023

    

Change

    

2024

    

2023

    

Change

  

Income tax expense (benefit)

   $ 384     $ (95 )     (505.3 %)   $ 901     $ (483 )     (286.7 %)

Effective tax rate

     10.1 %     7.2 %    

2.9 pt

       11.7 %     21.4 %    

(9.7 pt)

  

 

Our effective income tax rate was 10.1% for the three months ended September 30, 2024 and 7.2% for the three months ended September 30, 2023. Our effective income tax rate was 11.7% for the six months ended September 30, 2024 and 21.4% for the six months ended September 30, 2023. 

 

The change in the effective tax rate for both the three and six months ended September 30, 2024 compared to the prior year periods is primary due to the valuation allowance established on the US deferred taxes during fiscal year 2024. The effective tax rate for both the three and the six months ended September 30, 2024 differed from the statutory federal rate of 21% primarily due to the valuation allowance established on the US deferred taxes during fiscal year 2024.

 

Our future effective income tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles, or interpretations thereof, and the geographic composition of our pre-tax income. We carefully monitor these factors and adjust our effective income tax rate accordingly.

 

Net Income

Net income varies with changes in revenues, gross profit, and operating expense (and included $8,611, $6,765 and $2,922 of non-cash: amortization of intangible assets acquired in business combinations, stock-based compensation expense, and depreciation expense, respectively, for the six months ended September 30, 2024).

 

Market-Based Awards

The performance-based restricted stock awards granted during fiscal year 2025 and fiscal year 2024 included a market-based component. 

 

Liquidity and Capital Resources

 

Our sources of liquidity include cash generated from operations, cash and cash equivalents on hand, cash available from our Credit Facility and Open Market Sale AgreementSM, working capital, and potential additional equity and debt offerings. We believe that cash flows from operating activities and potential cash provided by borrowings from our Credit Facility or funds from our Open Market Sale AgreementSM, when necessary, will be sufficient to meet our ongoing operating requirements, scheduled interest payments on debt, dividend payments, and anticipated capital expenditures. 

 

Our more significant uses of resources have historically included acquisitions, payments of debt and interest obligations, long-term capital expenditures, and quarterly dividends to shareholders. During fiscal year 2024, we acquired GKE for $87,187, net of cash and financial liabilities acquired and inclusive of working capital adjustments. We expect to pay a holdback of approximately $9,700 (at September 30, 2024 exchange rates) from the acquisition in April 2025, pending adjustments for potential indemnification losses. 

 

Working capital is the amount by which current assets exceed current liabilities. We had working capital of $(45,252) and $65,040 as of September 30, 2024 and March 31, 2024, respectively. As of September 30, 2024 and March 31, 2024, we had $24,337 and $28,214, respectively, of cash and cash equivalents. Our working capital balance is negative as of September 30, 2024 primarily because of the balance on the Notes is now current, due August 15, 2025, which is within 12 months of September 30, 2024. See further discussion below.

 

Page 19
Table of Contents

 

During the first quarter of fiscal year 2025, we amended and restated our Credit Facility to: 

 

 

●

Allow proceeds from the Credit Facility to be used to redeem some or all of the Notes.
 

●

Add the $75,000 senior secured Term Loan.
 

●

Extend the maturity of the Credit Facility to April 2029.
 

●

Make certain changes to the financial covenants.

 

Under the revised Credit Facility, we maintain access to our Revolver, allowing access to up to $125,000 of borrowings. During the three months ended December 31, 2023, we borrowed a total of $71,000 under the Revolver to fund the majority of the acquisition of GKE. As of September 30, 2024, $35,500 remained outstanding under the Revolver. During October 2024, we repaid $4,500 on our Revolver.

 

We used the $75,000 proceeds from borrowings under the Term Loan to enter into a separate, privately negotiated purchase agreements with a limited number of holders of our Notes. Pursuant to the purchase agreements, we purchased $75,000 aggregate principal amount of the Notes for an aggregate cash purchase price of approximately $71,250. Following these transactions, $97,500 aggregate principal amount of the Notes remains outstanding and is now classified as current on our condensed consolidated balance sheets.  

 

At the interest rate effective through October 30, 2024, within the next twelve months we expect to incur cash interest expense of approximately $7,300 (adjusted for required future principal payments) on undiscounted borrowings of $104,125 related to the Credit Facility as of the date of this filing.

 

We have $97,500 due on the Notes in August 2025. Together with the current portion of our Term Loan, the cash needed for principal debt payments is $101,250 within the next 12 months. We plan use cash on hand, draws against our Revolver, which has $94,000 available as of the date of this filing, and cash generated from operating activities over the next three quarters to fund the amount due.

 

In April 2022, we entered into an Open Market Sale AgreementSM pursuant to which we may issue and sell, from time to time, shares of our common stock with an aggregate value of up to $150,000. We have not sold any shares under this agreement. 

 

We routinely evaluate opportunities for strategic acquisitions. Future material acquisitions may require that we obtain additional capital, assume additional third-party debt or incur other long-term obligations. We believe that we have the ability to issue more equity or debt in the future in order to finance our acquisition and investment activities; however, additional equity or debt financing, or other transactions, may not be available on acceptable terms, if at all.

 

We may from time to time repurchase or take other steps to reduce our debt. These actions may include retirements or refinancing of outstanding debt through tender offers, privately negotiated transactions, or otherwise. The amount of debt that may be retired, if any, could be material. Retirement would be decided at the sole discretion of our Board of Directors and would depend on market conditions, our cash position, and other considerations.

 

Dividends

We have paid regular quarterly dividends since 2003. We paid dividends of $0.16 per share during the three months ended September 30, 2024, as well as each quarter of fiscal years 2025 and 2024.

 

In October 2024, we announced that our Board of Directors declared a quarterly cash dividend of $0.16 per share of common stock, payable on December 16, 2024, to shareholders of record at the close of business on November 29, 2024.

 

Goodwill and Intangible Assets

We perform analyses at least quarterly to identify potential impairment indicators and to assess whether it is more likely than not that our goodwill reporting units are impaired. We have determined our goodwill reporting units are not impaired as of September 30, 2024; however, impairment losses recorded in the prior fiscal year resulted in a 0% cushion between the fair and carrying values of our Clinical Genomics division and the Immunoassays reporting unit within our Biopharmaceutical Development division as of our most recent annual impairment testing date on January 1, 2024. Revenues related to our Biopharmaceutical Development division were higher than our impairment model indicated; however, our Clinical Genomics reporting unit remains susceptible to future impairment losses if actual results differ significantly from the assumptions used in our most recent impairment tests. While revenues in our Clinical Genomics division have declined somewhat from fiscal year 2024 levels, we deployed cost saving measures late in fiscal year 2024, primarily a reduction in force, and as a result, we believe that our operating cash flows for fiscal year 2025 for Clinical Genomics will approximate the levels used in our recent impairment model. At our last testing date, the fair value of the applicable reporting units was assessed by weighting Gordon Growth and Exit Multiple discounted cash flow models and guideline public company models (one-year forward multiples), relying on unobservable Level 3 inputs, including but not limited to discount rates, expected useful lives, applicable competitors, and anticipated revenues growth and margins. Inputs were established through discussions between management and external valuation specialists, and were based on internal expectations for future performance, market indicators, and reputable valuation research resources. These assumptions required inputs and estimates that are subject to uncertainty such that there is a reasonable possibility that further impairment losses, which could be material to our consolidated financial statements, may occur in the future.

 

Cash Flows

 

Our cash flows from operating, investing, and financing activities were as follows (in thousands):

 

   

Six Months Ended September 30,

  
   

2024

    

2023

  

Net cash provided by operating activities

   $ 15,704     $ 19,715  

Net cash (used in) investing activities

     (2,679 )     (904 )

Net cash (used in) financing activities

     (17,719 )     (15,079 )

 

Page 20
Table of Contents

 

Cash flows from operating activities for the six months ended September 30, 2024 provided $15,704, a decrease of $4,011 versus the comparable prior year period. The decrease in cash flows from operating activities for the six months ended September 30, 2024 compared to September 30, 2023 was primarily a result of:

 

●

 lower cash collected on accounts receivable,
● higher payments made for income taxes,

●

 approximately $3,900 more paid for interest as we had more debt outstanding at higher rates; partially offset by
● cash provided by improved operating performance, primarily due to an increase in revenues of $12,193. 

 

Cash used in investing activities for the six months ended September 30, 2024 increased compared to the six months ended September 30, 2023 primarily due to spending on property, plant and equipment, including for our new leased facility in Sweden. 

 

Cash used in financing activities resulted in a $17,719 use of cash for the six months ended September 30, 2024. Net proceeds from borrowings under the Term Loan in the first quarter of fiscal year 2025 were almost fully offset by payments made to repurchase the Notes. We used $15,000 of cash to repay the Revolver and $1,875 to pay down the Term Loan in the six months ended September 30, 2024, compared to $13,000 to pay down the Revolver in the comparable prior year period.

 

Contractual Obligations and Other Commercial Commitments

 

We are party to many contractual obligations that involve commitments to make payments to third parties in the ordinary course of business. For a description of our contractual obligations and other commercial commitments as of March 31, 2024, see our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the Securities and Exchange Commission on June 28, 2024.

 

On a consolidated basis, as of September 30, 2024, we had contractual obligations for open purchase orders of approximately $18,030 for routine purchases of supplies and inventory, the majority of which are payable in less than one year. 

 

As part of the GKE acquisition, we have agreed to pay the GKE sellers approximately $9,700 (at September 30, 2024 exchange rates) of the acquisition price in April 2025, pending adjustments for potential indemnification losses that may arise. 

 

As part of the Belyntic acquisition, we agreed to pay $1,500 to the sellers if specified patents related to the technology purchased are issued. The estimated fair value of the probable remaining contingent consideration was $650 as of September 30, 2024. 

 

See "Liquidity and Capital Resources" for information related to future required debt payments.

 

Critical Accounting Policies and Estimates

 

Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective, or complex judgments, often because we need to estimate the effect of inherently uncertain matters. These estimates are based on historical experience and various other factors that we believe to be appropriate under the circumstances. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in our Annual Report on Form 10-K for the year ended March 31, 2024, in the Critical Accounting Policies and Estimates section of Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Although we believe that our estimates, assumptions, and judgements are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.

 

Non-GAAP Measures

 

In addition to the financial measures prepared in accordance with generally accepted accounting principles, we present organic revenues growth (reported revenues growth excluding revenues from recent acquisitions), as a supplemental non-GAAP financial measure. We believe that presenting supplemental organic revenues growth facilitates comparability between current period and prior period information, and provides insight into Mesa’s short-term and long-term financial trends. We use organic revenue growth internally to forecast and evaluate Mesa’s operating performance and to compare revenues of current periods to prior periods, for financial and operating decision-making and for compensation purposes.

 

A reconciliation of organic revenues growth to total revenues growth is as follows: 

 

   

Total Revenues Growth

    

Impact of Acquisitions

    

Organic Revenues Growth (non-GAAP)

  
    Three Months Ended September 30,     Three Months Ended September 30,     Three Months Ended September 30,  
    2024     2023     2024     2023     2024     2023  

Sterilization and Disinfection Control

     30.0 %     0.7 %     (34.3 %)     - %     (4.3 %)     0.7 %

Clinical Genomics

     (26.0 %)     (15.7 %)     - %     - %     (26.0 %)     (15.7 %)

Biopharmaceutical Development

     28.9 %     (24.2 %)     - %     (0.2 %)     28.9 %     (24.4 %)

Calibration Solutions

     8.2 %     1.1 %     - %     - %     8.2 %     1.1 %

Total Company

     8.8 %     (9.5 %)     (11.0 %)     (0.1 %)     (2.2 %)     (9.6 %)

 

   

Total Revenues Growth

    

Impact of Acquisitions

    

Organic Revenues Growth (non-GAAP)

  
    Six Months Ended September 30,     Six Months Ended September 30,     Six Months Ended September 30,  
   

2024

  

2023

    

2024

    

2023

    

2024

    

2023

  

Sterilization and Disinfection Control

     36.8 %     4.0 %     (36.7 %)     - %     0.1 %     4.0 %

Clinical Genomics

     (20.8 %)     (12.2 %)     - %     - %     (20.8 %)     (12.2 %)

Biopharmaceutical Development

     25.0 %     (17.4 %)     - %     (0.4 %)     25.0 %     (17.8 %)

Calibration Solutions

     5.6 %     6.4 %     - %     - %     5.6 %     6.4 %

Total Company

     11.7 %     (4.9 %)     (11.6 %)     (0.1 %)     0.1 %     (5.0 %)

 

Page 21
Table of Contents

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Foreign Currency Exchange Rates

We face exchange rate risk from transactions with customers in countries outside the United States and from intercompany transactions between affiliates. Transactional exchange rate risk arises from the purchase and sale of goods and services in currencies other than the functional currency of the applicable subsidiary. We also face translational exchange rate risk related to the translation of financial statements of our foreign operations into USD, our functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into USD using average exchange rates effective during the respective period. As a result, we are exposed to movements in the exchange rates of various currencies against the USD. Our Biopharmaceutical Development division is particularly susceptible to currency exposures since it incurs a substantial portion of its expenses in Swedish Krona, while most of the division's revenue contracts are in USD and euros. Therefore, when the Swedish Krona strengthens or weakens against the USD, operating profits are increased or decreased, respectively. As we continue to consummate acquisitions of companies with foreign operations or with functional currencies other than the USD, our foreign currency exchange rate risk will increase. The effect of a change in currency exchange rates on our international subsidiaries' assets and liabilities is reflected in the accumulated other comprehensive income component of stockholders’ equity.

 

Interest Rates

Our Credit Facility bears interest at either a base rate or a SOFR rate plus an applicable spread. Based on the balance outstanding as of the date of this filing and required future principal payments, we estimate that if interest rates increased 1 percentage point, we would incur approximately $920 of additional cash interest expense per year.

 

Inflation Risk

Inflation generally impacts us by increasing our costs of labor, materials, and freight. The rates of inflation experienced in recent years have not had a significant impact on our financial statements as inflationary cost increases have been offset by annual price increases. However, any price increases imposed may lead to declines in sales volume if competitors do not similarly adjust prices. We cannot reasonably estimate our ability to successfully recover any impact of inflation cost increases into the future.

 

Other

We have no derivative instruments. We have minimal exposure to commodity market risks.

 

Item 4. Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Evaluation of Disclosure Controls and Procedures

 

As of September 30, 2024, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report, due to a material weakness identified in the fourth quarter of fiscal year 2024 that has not yet been remediated. Two of the material weaknesses identified in the fourth quarter of fiscal year 2024 were remediated in the first quarter of fiscal year 2025. The material weaknesses are described further below.

 

Prior Year Material Weaknesses

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As disclosed in Part II Item 9A. "Controls and Procedures" in our annual report on Form 10-K for the year ended March 31, 2024, during fiscal year 2024 we identified three material weaknesses in our internal controls: 

 

●

Controls over technical accounting for complex and non-routine transactions - We did not have adequate supervision and review controls over complex technical accounting related to non-routine goodwill impairment transactions and related analyses.
● Controls over determining the useful lives of our recently acquired intangibles - During the GKE acquisition's measurement period, we selected a useful life over which to amortize acquired customer relationships, but there was evidence that a longer useful life may be appropriate.

●

 Certain controls related to change management and logical access controls related to our enterprise resource planning tool, part of our information technology general controls set, were not operating effectively for a portion of the year ended March 31, 2024.  The failure of these information technology general controls extended to automated application controls across portions of financial reporting and business transaction cycles which rely upon the affected information technology application controls. 

 

Remediation Status for Material Weaknesses in Internal Control Over Financial Reporting

 

Beginning during the three months ended June 30, 2024, and continuing into the three months ended September 30, 2024, we implemented our previously-disclosed remediation plans: 

 

●

Technical accounting for complex and non-routine transactions - We executed two transactions during the first quarter of our fiscal year 2025, partial repurchases of the Notes and the amendment and modification of our Credit Facility, which met our definition of complex technical accounting matters for which we should obtain technical accounting support from an outside expert. We identified and selected qualified third-party advisors, including validation that that the advisors possessed adequate knowledge to address the complexities of the applicable technical accounting matters, and we ensured analyses were appropriately reviewed, ensuring consensus on accounting conclusions. Following the execution of our remediation plan for these transactions, management has concluded that the material weakness has been remediated.  

 

Page 22
Table of Contents

 

● Assessment of useful lives of recently acquired intangibles - We modified the useful life of our customer relationship intangible and recorded an immaterial cumulative effect true-up to release amortization expense during the three months ended June 30, 2024. Following the execution of our remediation plan related to the useful lives of recently acquired intangible assets, management has concluded that the material weakness has been remediated.

●

Information technology general controls ("ITGCs") - We have not yet remediated the material weakness related to ITGCs. We believe that our existing user access review control over our ERP was not designed to operate at a precise enough level to appropriately identify the user groups tested in certain of our other logical access and change management controls. Therefore, we have designed a new user access control regarding users of our ERP that will operate at a higher degree of precision compared with our existing user access control and will enhance our review of roles, particularly roles with the ability to add, edit or delete transactions. Management has modified the reports used as source data to test change management and logical access controls in our enterprise resource planning tool, which we expect will allow us to conclude that the related controls are operating effectively by the end of fiscal year 2025. We have engaged a third party specialist to assist in the remediation of our ITGCs.

 

Changes in Internal Control Over Financial Reporting

 

We acquired GKE during the third quarter of our fiscal year ended March 31, 2024. As such, the scope of our assessment of our internal control over financial reporting does not yet include GKE. This exclusion is in accordance with the Securities and Exchange Commission’s general guidance that an assessment of a recently acquired business may be omitted from our scope for one year from the date of acquisition. GKE GmbH and Sal GmbH will be included in the scope of our assessment of our internal controls over financial reporting, and GKE China will be included for cash, in the third quarter of our fiscal year 2025. The Company's total assets as of September 30, 2024 include $105,000 of assets held by GKE. The Company's consolidated revenues for the three months ended September 30, 2024 include $5,863 from GKE.

 

Other than as discussed above, during the three months ended September 30, 2024 there were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. 

 

Part II. Other Information

 

Item 1. Legal Proceedings

 

See Note 11. “Commitments and Contingencies” within Item 1. Financial Statements for information regarding any legal proceedings in which we may be involved.

 

Item 1A. Risk factors

 

During the three months ended September 30, 2024, there were no material changes from the risk factors described in Part 1, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended March 31, 2024. 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Issuer Purchases of Equity Securities

 

The following table provides information about the Company's purchases of equity securities for the periods indicated:

 

   

Total Number of Shares Purchased(1)

    

Average Price Paid Per Share

    

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)

    

Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs

  

July 2024

     -       -       -       162,486  

August 2024

     2,306       133.32       -       162,486  

September 2024

     -       -       -       162,486  

Total

     2,306       133.32       -       162,486  

 

 

(1)

Shares purchased during the period were transferred to the Company from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock awards during the period.
 

(2)

 On November 7, 2005, our Board of Directors adopted a share repurchase plan which allows for the repurchase of up to 300,000 of our common shares; however, no shares have been purchased under the plan in any period presented. This plan will continue until the maximum is reached or the plan is terminated by further action of the Board of Directors.

 

 

Item 5. Other Information

 

The following of our directors or officers entered into written plans for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) (each, a "trading arrangement") on the dates indicated:

 

Chief Executive Officer Gary Owens entered into a trading arrangement on September 12, 2024. The trading arrangement is effective through June 10, 2025, and contemplates that Mr. Owens may exercise 30,939 non-qualified stock options and sell the resulting 30,939 shares of Mesa Labs' common stock, subject to certain conditions. 
 

 

Page 23
Table of Contents

 

Item 6. Exhibits

 

Exhibit No.

Description of Exhibit
3.1 Amended and Restated Articles of Incorporation of Mesa Laboratories, Inc. (incorporated by reference from exhibit 3.1 to the Current Report on Form 8-K filed August 25, 2023 (Commission File Number: 000-11740)).
3.2 Amended and Restated Bylaws of Mesa Laboratories, Inc. (incorporated by reference from exhibit 3.1 to the Current Report on Form 8-K filed on May 10, 2019 (Commission File Number: 000-11740)).

31.1+

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2+

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS+ XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH+ Inline XBRL Taxonomy Extension Schema Document.
101.CAL+ Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+ Inline XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB+ Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE+ Inline XBRL Taxonomy Extension Presentation Linkbase Document

104+

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*).

 

+ Filed herewith

* Furnished herewith

 

Page 24
Table of Contents

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

MESA LABORATORIES, INC.

(Registrant)

 

 

DATED: November 7, 2024 BY:

/s/ Gary M. Owens.

Gary M. Owens

Chief Executive Officer
     
     
DATED: November 7, 2024 BY:

/s/ John V. Sakys

John V. Sakys

Chief Financial Officer

                      

Page 25

 

Exhibit 31.1 Certifications Pursuant to Rule 13a-14(a)

 

I, Gary M. Owens, certify that:

 

 

1.

I have reviewed this quarterly report on Form 10-Q of Mesa Laboratories, Inc.;

 

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

Date: November 7, 2024

 /s/ Gary M. Owens

Gary M. Owens

Chief Executive Officer

             

 

 

Exhibit 31.2 Certifications Pursuant to Rule 13a-14(a)

 

I, John V. Sakys, certify that:

 

 

1.

I have reviewed this quarterly report on Form 10-Q of Mesa Laboratories, Inc.;

 

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

Date: November 7, 2024

/s/ John V. Sakys

John V. Sakys

Chief Financial Officer

              

 

 

Exhibit 32.1 Certifications Pursuant to Rule 13a-14(b) and 18 U.S.C Section 1350

 

In connection with the Quarterly Report of Mesa Laboratories, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gary M. Owens, Chief Executive Officer of the Company, certify, pursuant to Rule 13a-14(b) and 18 U.S.C. § 1350, that:

 

 

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date: November 7, 2024

/s/ Gary M. Owens

Gary M. Owens

Chief Executive Officer

              

 

 

 

 

 

Exhibit 32.2 Certifications Pursuant to Rule 13a-14(b) and 18 U.S.C Section 1350

 

In connection with the Quarterly Report of Mesa Laboratories, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John V. Sakys, Chief Financial Officer of the Company, certify, pursuant to Rule 13a-14(b) and 18 U.S.C. § 1350, that:

 

 

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date: November 7, 2024

/s/ John V. Sakys

John V. Sakys

Chief Financial Officer

              

 
v3.24.3
Document And Entity Information - shares
 6 Months Ended
Sep. 30, 2024
Oct. 31, 2024
Document Information [Line Items]    
Entity Central Index Key 0000724004  
Entity Registrant Name MESA LABORATORIES INC /CO  
Amendment Flag false  
Current Fiscal Year End Date --03-31  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2025  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 0-11740  
Entity Incorporation, State or Country Code CO  
Entity Tax Identification Number 84-0872291  
Entity Address, Address Line One 12100 West Sixth Avenue  
Entity Address, City or Town Lakewood  
Entity Address, State or Province CO  
Entity Address, Postal Zip Code 80228  
City Area Code 303  
Local Phone Number 987-8000  
Title of 12(b) Security Common Stock, no par value  
Trading Symbol MLAB  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   5,431,424
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Cash and cash equivalents $ 24,337 $ 28,214
Accounts receivable, less allowance for credit losses of $1,026 and $1,321, respectively 40,234 39,055
Inventories 29,738 32,675
Prepaid expenses and other current assets 13,669 9,408
Total current assets 107,978 109,352
Noncurrent assets:    
Property, plant and equipment, net of accumulated depreciation of $25,656 and $22,519 respectively 32,073 31,766
Deferred tax asset 1,329 1,292
Other assets 20,142 10,538
Intangible assets 108,823 113,752
Goodwill 183,753 180,096
Total assets 454,098 446,796
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Accounts payable 5,988 6,041
Accrued payroll and benefits 9,185 9,935
Unearned revenues 14,412 15,478
Other accrued expenses 22,866 12,858
Term loan, current portion 3,750 0
Convertible senior notes, current portion, net of debt issuance costs 97,029 0
Total current liabilities 153,230 44,312
Noncurrent liabilities:    
Deferred tax liability 20,561 19,780
Other 14,653 15,613
Revolving line of credit 35,500 50,500
Noncurrent portion 68,703 0
Convertible senior notes, noncurrent portion, net of debt issuance costs 0 171,198
Total liabilities 292,647 301,403
Stockholders’ equity:    
Common stock, no par value; authorized 25,000,000 shares; issued and outstanding, 5,419,855 and 5,394,491 shares, respectively 349,529 343,642
(Accumulated deficit) (178,407) (183,494)
Accumulated other comprehensive (loss) (9,671) (14,755)
Total stockholders’ equity 161,451 145,393
Total liabilities and stockholders’ equity 454,098 446,796
Customer Relationships [Member]    
Noncurrent assets:    
Intangible assets 81,928 85,383
Other Intangible Assets [Member]    
Noncurrent assets:    
Intangible assets $ 26,895 $ 28,369
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
$ / shares in Thousands, $ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Allowance for doubtful accounts receivable $ 1,026 $ 1,321
Property, plant, and equipment accumulated depreciation $ 25,656 $ 22,519
Common stock, no par value (in dollars per share) $ 0 $ 0
Common stock, authorized (in shares) 25,000,000 25,000,000
Common stock, issued (in shares) 5,419,855 5,394,491
Common stock, outstanding (in shares) 5,419,855 5,394,491
v3.24.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenues [1] $ 57,833 $ 53,165 $ 116,003 $ 103,810
Cost of revenues 22,378 21,056 43,299 40,518
Gross profit 35,455 32,109 72,704 63,292
Selling 9,849 9,650 19,965 18,626
Research and development 4,634 4,993 9,369 9,804
Total operating expense 31,947 32,169 63,616 64,016
Operating income (loss) 3,508 (60) 9,088 (724)
Interest expense and amortization of debt issuance costs 3,018 905 5,860 1,953
Gain on extinguishment of convertible notes 0 0 (3,197) 0
Other (income) expense, net (3,322) 360 (1,292) (415)
Total nonoperating (income) expense, net (304) 1,265 1,371 1,538
Earnings (loss) before income taxes 3,812 (1,325) 7,717 (2,262)
Income tax expense (benefit) 384 (95) 901 (483)
Net income (loss) $ 3,428 $ (1,230) $ 6,816 $ (1,779)
Basic earnings (loss) per share (in dollars per share) $ 0.63 $ (0.23) $ 1.26 $ (0.33)
Diluted earnings (loss) per share (in dollars per share) $ 0.63 $ (0.23) $ 1.25 $ (0.33)
Basic (in shares) 5,413 5,387 5,405 5,379
Diluted (in shares) 5,471 5,387 5,448 5,379
Product [Member]        
Revenues $ 57,833 $ 53,165 $ 116,003 $ 103,810
Service [Member]        
General and administrative $ 17,464 $ 17,526 $ 34,282 $ 35,586
[1] Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.
v3.24.3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Net income (loss) $ 3,428 $ (1,230) $ 6,816 $ (1,779)
Other comprehensive income (loss):        
Foreign currency translation adjustments 4,632 (1,353) 5,084 (8,014)
Comprehensive income (loss) $ 8,060 $ (2,583) $ 11,900 $ (9,793)
v3.24.3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Total
Balance at Mar. 31, 2023 $ 332,076 $ 74,199 $ (12,795) [1] $ 393,480
Exercise of stock options and vesting of restricted stock units (in shares) 20,074      
Exercise of stock options and vesting of restricted stock units $ 52     52
Tax withholding on vesting of restricted stock units (in shares) (5,260)      
Tax withholding on vesting of restricted stock units $ (712) 0 0 (712)
Dividends paid, $0.16 per share   (859)   (859)
Stock-based compensation expense $ 2,968     2,968
Foreign currency translation     (6,661) [1] (6,661)
Net income   (549)   (549)
Balance (in shares) at Jun. 30, 2023 5,384,280      
Balance at Jun. 30, 2023 $ 334,384 72,791 (19,456) [1] 387,719
Balance (in shares) at Mar. 31, 2023 5,369,466      
Net (loss) income   (549)   (549)
Balance at Mar. 31, 2023 $ 332,076 74,199 (12,795) [1] 393,480
Foreign currency translation       (8,014)
Net income       (1,779)
Balance (in shares) at Sep. 30, 2023 5,391,726      
Balance at Sep. 30, 2023 $ 337,869 70,699 (20,809) [1] 387,759
Balance (in shares) at Mar. 31, 2023 5,369,466      
Net (loss) income       (1,779)
Balance at Jun. 30, 2023 $ 334,384 72,791 (19,456) [1] 387,719
Exercise of stock options and vesting of restricted stock units (in shares) 7,464      
Exercise of stock options and vesting of restricted stock units $ 304     304
Tax withholding on vesting of restricted stock units (in shares) (18)      
Tax withholding on vesting of restricted stock units $ (2)     (2)
Dividends paid, $0.16 per share   (862)   (862)
Stock-based compensation expense $ 3,183     3,183
Foreign currency translation     (1,353) (1,353)
Net income   (1,230)   (1,230)
Balance (in shares) at Sep. 30, 2023 5,391,726      
Balance at Sep. 30, 2023 $ 337,869 70,699 (20,809) [1] 387,759
Balance (in shares) at Jun. 30, 2023 5,384,280      
Net (loss) income   (1,230)   $ (1,230)
Balance (in shares) at Mar. 31, 2024 5,394,491     5,394,491
Balance at Mar. 31, 2024 $ 343,642 (183,494) (14,755) [1] $ 145,393
Exercise of stock options and vesting of restricted stock units (in shares) 20,858      
Exercise of stock options and vesting of restricted stock units $ 0     0
Tax withholding on vesting of restricted stock units (in shares) (6,194)      
Tax withholding on vesting of restricted stock units $ (571) 0 0 (571)
Dividends paid, $0.16 per share   (863)   (863)
Stock-based compensation expense 2,928     2,928
Foreign currency translation     452 [1] 452
Net income $ 0 3,388 0 3,388
Balance (in shares) at Jun. 30, 2024 5,409,155      
Balance at Jun. 30, 2024 $ 345,999 (180,969) (14,303) [1] 150,727
Net (loss) income $ 0 3,388 0 $ 3,388
Balance (in shares) at Mar. 31, 2024 5,394,491     5,394,491
Balance at Mar. 31, 2024 $ 343,642 (183,494) (14,755) [1] $ 145,393
Exercise of stock options and vesting of restricted stock units (in shares)       (0)
Foreign currency translation       $ 5,084
Net income       6,816
Balance (in shares) at Sep. 30, 2024 5,419,855      
Balance at Sep. 30, 2024 $ 349,529 (178,407) (9,671) [1] 161,451
Net (loss) income       6,816
Balance at Jun. 30, 2024 $ 345,999 (180,969) (14,303) [1] 150,727
Exercise of stock options and vesting of restricted stock units (in shares) 13,006      
Exercise of stock options and vesting of restricted stock units $ 0     0
Tax withholding on vesting of restricted stock units (in shares) (2,306)      
Tax withholding on vesting of restricted stock units $ (307)     (307)
Dividends paid, $0.16 per share   (866)   (866)
Stock-based compensation expense 3,837     3,837
Foreign currency translation     4,632 4,632
Net income $ 0 3,428 0 3,428
Balance (in shares) at Sep. 30, 2024 5,419,855      
Balance at Sep. 30, 2024 $ 349,529 (178,407) (9,671) [1] 161,451
Balance (in shares) at Jun. 30, 2024 5,409,155      
Net (loss) income $ 0 $ 3,428 $ 0 $ 3,428
[1] Accumulated Other Comprehensive Income (Loss).
v3.24.3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares
 3 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Dividends paid, per share (in dollars per share) $ 0.16 $ 0.16
v3.24.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash flows from operating activities:    
Net income (loss) $ 6,816 $ (1,779)
Adjustments to reconcile net income (loss) to net cash from operating activities:    
Depreciation of property, plant and equipment 2,922 1,825
Amortization of acquisition-related intangibles 8,611 14,405
Stock-based compensation expense 6,765 6,151
Gain on extinguishment of convertible notes (3,197) 0
Amortization of step-up in inventory basis 1,232 0
Other (1,100) 1,598
Cash from changes in operating assets and liabilities:    
Accounts receivable, net (566) 5,448
Inventories (44) (184)
Prepaid expenses and other assets (1,449) (3,528)
Accounts payable (189) (1,307)
Accrued liabilities and taxes payable (2,788) (1,743)
Unearned revenues (1,309) (1,171)
Net cash provided by operating activities 15,704 19,715
Cash flows from investing activities:    
Purchases of property, plant and equipment (2,679) (904)
Net cash (used in) investing activities (2,679) (904)
Cash flows from financing activities:    
Proceeds from the issuance of debt, net 73,465 0
Repayment of debt (16,875) (13,000)
Repurchase of convertible debt (71,250) 0
Dividends paid (1,729) (1,721)
Other financing, net (1,330) (358)
Net cash (used in) financing activities (17,719) (15,079)
Effect of exchange rate changes on cash and cash equivalents 817 (1,025)
Net (decrease) increase in cash and cash equivalents (3,877) 2,707
Cash and cash equivalents at beginning of period 28,214 32,910
Cash and cash equivalents at end of period 24,337 35,617
Supplemental non-cash activity:    
Right of use assets obtained in exchange for lease liabilities $ 9,658 $ 991
v3.24.3
Note 1 - Description of Business and Summary of Significant Accounting Policies
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

Note 1. Description of Business and Summary of Significant Accounting Policies

 

Description of Business

 

In this quarterly report on Form 10-Q, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries, is collectively referred to as “we,” “us,” “our,” the “Company,” or “Mesa.”

 

We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and Asia Pacific, and by independent distributors in these areas and throughout the rest of the world. We prefer markets in which we can establish a strong presence and achieve high gross profit margins.

 

As of September 30, 2024, we managed our operations in four reportable segments, or divisions:

 

 ●Sterilization and Disinfection Control - manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization, decontamination, disinfection, and cleaning processes in the medical device, pharmaceutical, and healthcare industries. The division also provides testing and laboratory services, mainly to the dental and pharmaceutical industries. 
 

●

Clinical Genomics - develops, manufactures and sells highly sensitive, low-cost, high-throughput genetic analysis tools and related consumables and services that enable clinical research labs and contract research organizations to perform genomic testing for a broad range of research applications in several therapeutic areas, such as screenings for hereditary diseases, pharmacogenetics, oncology related applications, and toxicology research.

 

●

Biopharmaceutical Development - develops, manufactures, sells and services automated systems for protein analysis (immunoassays) and peptide synthesis solutions. Immunoassays and peptide synthesis solutions accelerate the discovery, development, and manufacture of biotherapeutic therapies, among other applications. 

 

●

Calibration Solutions - develops, manufactures, sells and services quality control products using principles of advanced metrology to enable customers to measure and calibrate critical parameters in applications such as environmental and process monitoring, dialysis, gas flow, air quality and torque testing.

 

Basis of Presentation

 

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. In the opinion of management, such unaudited information includes all adjustments, consisting of normal recurring adjustments necessary for the fair statement of our financial position and results of operations. The results of operations for interim periods are not necessarily indicative of results that may be achieved for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The Condensed Consolidated Financial Statements include the accounts of Mesa and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We made no material changes to the application of our significant accounting policies disclosed in our annual report on Form 10-K. This quarterly report should be read in conjunction with the consolidated financial statements included in our annual report on Form 10-K for the year ended  March 31, 2024.

 

Our fiscal year ends on March 31. References in this Quarterly Report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively.

 

Risks and Uncertainties

 

The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods. These estimates represent management's judgment about the outcome of future events. The global business environment continues to be impacted by cost pressures, the overall effects of economic uncertainty on customers' purchasing patterns, high interest rates, and other factors. It is not possible to accurately predict the future impact of such events and circumstances. Actual results could differ from our estimates.

 

Recently Issued Accounting Pronouncements

 

In  November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ASU No. 2023-07 requires all annual disclosures currently required by Topic 280 to be included in interim financial statements and requires disclosure of significant segment expenses regularly provided to the chief operating decision maker ("CODM"), a description of other segment items by reportable segment, and applicable additional measures of segment profit or loss used by the CODM when allocating resources and assessing business performance. The ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year 2025 for annual periods), and interim periods within fiscal years beginning after December 15, 2024 (our fiscal year 2026 for interim periods) on a retrospective basis. We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements.

 

In  December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU No. 2023-09, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for public business entities for fiscal years beginning after  December 15, 2024 (our fiscal year 2026), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.

 

We have reviewed all recently issued accounting pronouncements and have concluded that, other than as described above, they are either not applicable to us or are not expected to have a significant impact on our consolidated financial statements.

 
v3.24.3
Note 2 - Significant Transactions
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Significant Transactions [Text Block]

Note 2. Significant Transactions

 

GKE - Fiscal Year 2024 Acquisition 

We acquired 100% of the outstanding shares of GKE GmbH and SAL GmbH effective  October 16, 2023, and upon approval by applicable Chinese regulators, effective December 31, 2023, we acquired 100% of the outstanding shares of Beijing GKE Science & Technology Co. Ltd. (“GKE China” and together with GKE GmbH and SAL GmbH, “GKE” or the "GKE acquisition").

 

GKE develops, manufactures and sells a highly competitive portfolio of chemical sterilization indicators, biologics, and process challenge devices to protect patient safety across global healthcare markets. GKE is included in our Sterilization and Disinfection Control ("SDC") division, and GKE's strengths in chemical indictors are complementary to SDC's strengths in biologic indicators as chemical and biologic indicators are used in the same sterility validation workflows. Additionally, GKE’s healthcare-focused commercial capabilities in Europe and Asia greatly expand our reach in the healthcare markets in those geographies. We are working to obtain regulatory 510(k) clearance on certain GKE products for sale in the United States, which would further expand organic revenues growth opportunities from the GKE business.

  

We finalized our purchase price accounting of GKE during fiscal year 2024. Total cash consideration for the GKE acquisition was $87,187, net of cash and financial liabilities acquired and inclusive of working capital adjustments. Of the total acquisition price, approximately $9,700 (at September 30, 2024 exchange rates) is being held back until April 2025 in accordance with the purchase agreement as security against potential indemnification losses ("GKE holdback"). We funded the acquisition through a combination of cash on-hand and a total of $71,000 borrowed under our line of credit. 

 

During the three and six months ended September 30, 2024, GKE's operations contributed the following amounts to our consolidated results of operations: 

 

  

Three Months Ended

  

Six Months Ended

 
  September 30, 2024 

Revenues

 $5,863  $12,117 

Gross profit

  3,733   7,553 
         

Amortization of inventory step-up recorded in cost of revenues

  454   1,232 

Amortization of acquired intangibles recorded in cost of revenues

  134   244 

Amortization of acquired intangibles recorded in general and administrative expense

  956   1,488 

 
v3.24.3
Note 3 - Revenue
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

Note 3. Revenue

 

We develop, manufacture, market, sell and maintain life sciences tools and quality control instruments and related consumables.

 

Hardware sales include physical products such as instruments used for molecular and genetic analysis, protein synthesizers, medical meters, wireless sensor systems, data loggers, and process challenge devices. Hardware sales  may be offered with accompanying perpetual or annual software licenses, which in some cases are required for the hardware to function.

 

Consumables are typically used on a one-time basis and require frequent replacement in our customers' operating cycles. Consumables sold by our Clinical Genomics and Biopharmaceutical Development divisions, such as reagents used for molecular and genetic analysis or solutions used for protein synthesis, are critical to the ongoing use of our instruments. Consumables such as biological and chemical indicator test strips sold by our Sterilization and Disinfection Control division are used on a standalone basis.

 

Revenues from hardware and consumables are recognized upon transfer to the customer, typically at the point of shipment. 

 

We also offer maintenance, calibration, and testing services. Such service contracts result in revenues recognized over time, for example, when we are obligated to perform labor and replace parts on an as-needed basis over a contractually specified period, or at a point in time, upon completion of a specific, discrete service. In many cases, our contracts contain both revenues recognized over time and revenues recognized at a point in time. 

 

We evaluate our revenues internally based on business division and the nature of goods and services provided.

 

The following tables present disaggregated revenues for the three and six months ended September 30, 2024 and 2023, respectively:

 

  

Three Months Ended September 30, 2024

 
  

Sterilization and Disinfection Control (1)

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $19,473  $8,178  $3,826  $444  $31,921 

Hardware and software

  144   2,451   5,168   7,848   15,611 

Services

  2,588   870   2,873   3,970   10,301 

Total revenues

 $22,205  $11,499  $11,867  $12,262  $57,833 

 

(1) Revenues of $5,863 from GKE are included in the Sterilization and Disinfection Control division during the three months ended September 30, 2024. 

 

  

Three Months Ended September 30, 2023

 
  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $14,749  $9,963  $4,187  $786  $29,685 

Hardware and software

  120   4,474   2,475   6,884   13,953 

Services

  2,211   1,112   2,545   3,659   9,527 

Total revenues

 $17,080  $15,549  $9,207  $11,329  $53,165 

 

  

Six Months Ended September 30, 2024

 
  

Sterilization and Disinfection Control (1)

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 

Consumables

 $39,869  $16,290  $7,748  $1,024  $64,931 

Hardware and software

  313   4,634   10,005   14,734   29,686 

Services

  4,980   1,979   6,122   8,305   21,386 

Total revenues

 $45,162  $22,903  $23,875  $24,063  $116,003 

 

(1) Revenues of $12,117 from GKE are included in the Sterilization and Disinfection Control division during the six months ended September 30, 2024. 

 

  

Six Months Ended September 30, 2023

 
  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $28,456  $18,732  $8,673  $1,295  $57,156 

Hardware and software

  201   7,901   5,166   13,962   27,230 

Services

  4,350   2,285   5,257   7,532   19,424 

Total revenues

 $33,007  $28,918  $19,096  $22,789  $103,810 

 

Revenues from external customers are attributed to individual countries based upon the locations to which the products are shipped or exported, or locations where services are performed, as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

United States

 $28,078  $27,073  $54,939  $53,610 

China

  7,390   7,529   13,949   13,642 

Other

  22,365   18,563   47,115   36,558 

Total revenues

 $57,833  $53,165  $116,003  $103,810 

 

Other than China, no foreign country exceeded 10% of total revenues for the three and six months ended September 30, 2024 and 2023.

 

Contract Balances

Our contracts have varying payment terms and conditions. Some customers prepay for products and services, resulting in unearned revenues or customer deposits, called contract liabilities. Short-term contract liabilities are included within unearned revenues in the accompanying unaudited Condensed Consolidated Balance Sheets, and long-term contract liabilities are included within other noncurrent liabilities in the accompanying unaudited Condensed Consolidated Balance Sheets. The significant majority of our revenues and related receivables and contract liabilities are generated from contracts with customers with original durations of 12 months or less. Contract liabilities will be recognized to revenue as we satisfy our obligations under the terms of the contracts. 

 

A summary of contract liabilities is as follows:

 

Contract liabilities as of March 31, 2024

 $15,686 

Prior year liabilities recognized in revenues during the six months ended September 30, 2024

  (6,802)

Contract liabilities added during the six months ended September 30, 2024, net of revenues recognized

  5,636 

Contract liabilities as of September 30, 2024

 $14,520 

 

 
v3.24.3
Note 4 - Fair Value Measurements
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

Note 4. Fair Value Measurements

 

Our financial instruments consist primarily of cash and cash equivalents, trade accounts receivable, obligations under trade accounts payable, and debt. Due to their short-term nature, the carrying values for cash and cash equivalents, trade accounts receivable, and trade accounts payable approximate fair value; they are classified within Level 1 of the fair value hierarchy. 

 

The financial instruments that subject us to the highest concentration of credit risk are cash and accounts receivable. We maintain relationships and cash deposits at multiple banking institutions across the world in an effort to diversify and reduce risk of loss. Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sales. No customers accounted for more than 10% of total trade receivables as of September 30, 2024.

 

On April 5, 2024, we entered into separate, privately negotiated purchase agreements with a limited number of holders of our 1.375% convertible senior notes due  August 15, 2025 (the "Notes"), through which we repurchased $75,000 in aggregate principal amount of the Notes. See Note 7. "Indebtedness" for further information. As of September 30, 2024, we had remaining outstanding $97,500 aggregate principal amount of the Notes. We estimate the fair value of the Notes using Level 2 inputs based on the last actively traded price or observable market input preceding the end of the reporting period. The fair value of the Notes is approximately correlated to our stock price.

 

The estimated fair value and carrying value of the Notes were as follows:

 

  

September 30, 2024

  

March 31, 2024

 
  

Carrying Value

  

Fair Value (Level 2)

  

Carrying Value

  

Fair Value (Level 2)

 

Notes

 $97,029  $94,148  $171,198  $163,013 

 

The carrying amount of the term loan and revolving line of credit (together, the "Credit Facility") on the Condensed Consolidated Balance Sheets approximates fair value due to the variable interest rate pricing on the debt with the balance bearing an interest rate approximating current market rates.

 

We expect to pay approximately $9,700 (at  September 30, 2024 exchange rates) for the GKE holdback in April 2025. We estimate the discounted fair value of consideration held back to be approximately $9,400 as of September 30, 2024 based on Level 3 inputs from the acquisition, including discount rate estimates. We adjust the estimated fair value at each reporting period through earnings.

 

During fiscal year 2023, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“the Belyntic acquisition”). The Belyntic acquisition obligates us to pay contingent consideration of up to $1,500 cash upon regulatory approval of certain patent applications (see Note 11. "Commitments and Contingencies"), of which $750 has not yet been paid. We estimate the fair value of the remaining contingent consideration is $650, using Level 3 inputs and a probability-weighted outcome analysis based on our expectations of patent approval, leveraging our historical experience and expert input. 

 

Amounts recognized or disclosed at fair value in the unaudited condensed consolidated financial statements on a nonrecurring basis include the initial recognition and disclosure of most assets and liabilities purchased in business acquisitions and any related measurement period adjustments. Additionally, assets such as property and equipment, operating lease assets, goodwill and other intangible assets are adjusted to fair value if determined to be impaired. Fair values of such assets and liabilities require measurement using Level 3 inputs. We recorded no impairments during the three and six months ended September 30, 2024 or 2023. 

 

There were no transfers between the levels of the fair value hierarchy during the three months ended three and six months ended September 30, 2024.

 
v3.24.3
Note 5 - Supplemental Information
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Supplemental Balance Sheet Disclosures [Text Block]

Note 5. Supplemental Information

 

Inventories consisted of the following:

 

  

September 30, 2024

  

March 31, 2024

 

Raw materials

 $18,215  $18,335 

Work in process

  366   1,256 

Finished goods

  11,157   13,084 

Total inventories

 $29,738  $32,675 

 

Prepaid expenses and other current assets consisted of the following: 

 

  

September 30, 2024

  

March 31, 2024

 

Prepaid expenses

 $3,674  $2,932 

Deposits

  1,666   1,898 

Prepaid income taxes

  4,407   1,237 

Other current assets

  3,922   3,341 

Total prepaid expenses and other current assets

 $13,669  $9,408 

 

Accrued payroll and benefits consisted of the following:

 

  

September 30, 2024

  

March 31, 2024

 

Bonus payable

 $4,224  $3,838 

Wages and paid-time-off payable

  2,404   3,072 

Payroll related taxes

  2,029   1,956 

Other benefits payable

  528   1,069 

Total accrued payroll and benefits

 $9,185  $9,935 

 

Other accrued expenses consisted of the following: 

 

  

September 30, 2024

  

March 31, 2024

 

Accrued business taxes

 $5,908  $5,557 

Current operating lease liabilities

  3,488   2,986 

Income taxes payable

  1,386   1,615 

Current acquisition-related holdbacks

  9,891   436 

Other

  2,193   2,264 

Total other accrued expenses

 $22,866  $12,858 

 

The increase in other accrued expenses is primarily due to the reclassification of the held back GKE acquisition-related consideration from noncurrent liabilities.

 

Other noncurrent liabilities consisted of the following: 

 

  

September 30, 2024

  

March 31, 2024

 

Noncurrent operating lease liabilities

 $14,385  $6,613 

Noncurrent acquisition-related holdbacks

  160   8,792 

Other

  108   208 

Total other noncurrent liabilities

 $14,653  $15,613 

 

The increase in operating lease liabilities is primarily attributable to new a new right-of-use leased facility associated with the manufacturing and administrative office facilities used by our Biopharmaceutical Development division in Uppsala, Sweden.

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Depreciation expense in cost of revenues

 $904  $655  $1,766  $1,329 

Depreciation expense in operating expense

  614   256   1,156   496 

Total depreciation expense

 $1,518  $911  $2,922  $1,825 

 

The increase in depreciation expense for the three and six months ended September 30, 2024 is primarily due to GKE's operations, which included $321 and $625 of depreciation expense, respectively. 
v3.24.3
Note 6 - Goodwill and Intangible Assets, Net
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]

Note 6. Goodwill and Intangible Assets, Net

 

Finite-lived intangible assets consisted of the following:

 

  

September 30, 2024

  

March 31, 2024

 
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 

Customer relationships

 $194,931  $(113,003) $81,928  $189,911  $(104,528) $85,383 

Other intangibles

  62,320   (35,425)  26,895   61,161   (32,792)  28,369 

Total finite-lived intangible assets

 $257,251  $(148,428) $108,823  $251,072  $(137,320) $113,752 

 

Amortization expense for finite-lived intangible assets was as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Amortization in cost of revenues

 $672  $1,756  $1,319  $3,484 

Amortization in general and administrative

  3,878   5,429   7,292   10,921 

Total amortization expense

 $4,550  $7,185  $8,611  $14,405 

 

For the following fiscal years ending March 31, amortization expense is estimated as follows, based on foreign currency exchange rates as of September 30, 2024:

 

Fiscal Year

 Amortization Expense 
  

Remainder of 2025

 $9,118 

2026

  17,586 

2027

  16,915 

2028

  16,301 

2029

  15,729 

  

The change in the carrying amount of goodwill was as follows:

 

  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 

March 31, 2024

 $79,430  $16,940  $46,515  $37,211   180,096 

Effect of foreign currency translation

  1,979   116   1,530   32   3,657 

September 30, 2024

 $81,409  $17,056  $48,045  $37,243  $183,753 

 
v3.24.3
Note 7 - Indebtedness
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 7. Indebtedness

 

Credit Facility

On  March 5, 2021, we entered into a four-year senior secured credit agreement that included 1) a revolving credit facility with an aggregate principal amount of up to $75,000 (the "Revolver"), 2) a swingline loan with an aggregate principal amount not exceeding $5,000, and 3) letters of credit with an aggregate stated amount not exceeding $2,500 at any time. The agreement also provided for an incremental term loan or an increase in revolving commitments with a minimum aggregate principal amount of $25,000 and a maximum amount of $75,000, subject to the satisfaction of certain conditions and lender considerations. We refer to the agreement in whole as the “Credit Facility.”

 

On  October 5, 2023, we amended the terms of the Credit Facility to increase the maximum principal amount available to us under the Revolver from $75,000 to $125,000. 

 

On  April 5, 2024, we further amended and restated the terms of the Credit Facility to:

 

(i)

Extend the maturity of the Credit Facility to  April 2029; 

(ii)

Allow proceeds from the Credit Facility to be used to redeem some or all of the Company’s 2025 Notes;

(iii)

Include a $75,000 senior secured term loan facility (the “Term Loan”), which is subject to principal amortization payments; and

(iv)

Make certain changes to the financial covenants.

 

In conjunction with the amendment and restatement of the Credit Facility during the six months ended September 30, 2024, we incurred $1,987 of customary lender fees and debt issuance costs paid to third parties, of which $1,242 is related to the Revolver and $745 is related to the Term Loan. The fees are being amortized to interest expense through maturity. 

 

Amounts borrowed under the Credit Facility bear interest at either a base rate or a SOFR rate plus an applicable spread ranging from 1.5% to 3.5%, depending on our total net leverage ratio. The interest rate on borrowings under our line of credit as of  September 30, 2024 was 8.4%.

 

The financial covenants in the Credit Facility as amended include a maximum leverage ratio of 4.50 to 1.00 for the first five testing dates on which amounts under the Revolver are outstanding; 4.0 to 1.0 on each of the sixth, seventh, eighth, and ninth testing dates; and 3.5 to 1.0 on each testing date following the ninth testing date. The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to 1.0 and a minimum senior net leverage ratio of 3.5 to 1. Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes to our business as defined in the contract, engage in certain transactions with affiliates, or conduct asset sales. As of  September 30, 2024, we were in compliance with all covenants under the Credit Facility.

 

Term Loan

We borrowed $75,000 under the Term Loan on  April 5, 2024, to fund the privately negotiated repurchases of a portion of the Notes (see “Convertible Notes” below). During the three and six months ended September 30, 2024, we made required quarterly principal payments on the Term Loan of $937 and $1,875, respectively. 

 

We are required to make quarterly principal payments on the Term Loan. For the following fiscal years ending March 31, debt payments on the Term Loan are required as follows:

 

Fiscal Year

 

Amount

 

Remainder of 2025

 $1,875 

2026

  3,750 

2027

  5,625 

2028

  5,625 

2029

  7,500 

Thereafter

  48,750 

Total Principal Remaining

 $73,125 

 

The net carrying amount of the Term Loan was as follows:

 

  

September 30, 2024

  

March 31, 2024

 

Term Loan (8.4% as of September 30, 2024)

 $73,125  $- 

Less: discount and debt issuance costs

  (672)  - 

Less: current portion

  (3,750)  - 

Noncurrent portion

 $68,703  $- 


The effective interest rate on the Term Loan at the time of borrowing was 8.13%.

 

Revolver

As of  September 30, 2024, the outstanding balance under the Revolver was $35,500 and $89,500 was available for borrowing. Subsequent to  September 30, 2024, we repaid an additional $4,500 on the Revolver. 

 

We are obligated to pay quarterly unused commitment fees of between 0.20% and 0.35% of the Revolver’s aggregate principal amount, based on our leverage ratio.

 

The balance of unamortized customary lender fees related to the Revolver, including fees from the original debt issuance and all subsequent amendments and restatements, was $1,353 and $321 as of  September 30, 2024 and  March 31, 2024, respectively.

 

Convertible Notes 

On August 12, 2019, we issued an aggregate principal amount of $172,500 of Notes. The net proceeds from the Notes, after deducting underwriting discounts and commissions and other related offering expenses payable by us, were approximately $167,056. The Notes mature on August 15, 2025, unless earlier repurchased or converted, and bear interest at a rate of 1.375% payable semi-annually in arrears on February 15 and August 15 each year. The Notes are initially convertible, subject to certain conditions, at a conversion rate of 3.5273 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $283.50 per share of common stock. 

 

On April 5, 2024, we entered into separate, privately negotiated transactions with certain holders of the Notes to repurchase $75,000 aggregate principal amount of the Notes for an aggregate repurchase price of $71,250 in cash, plus accrued and unpaid interest of $160. We accounted for the partial repurchase of the Notes as a debt extinguishment, which resulted in the recognition of a gain on extinguishment of $3,197 in other income on the Condensed Consolidated Statements of Operations during the six months ended September 30, 2024. As of September 30, 2024, $97,500 in aggregate principal amount of the Notes remained outstanding, which we intend to pay using a combination of cash on hand and a draw on our Revolver.

 

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock. The circumstances necessary for conversion were not met during the three or six months ended  September 30, 2024. The Notes will become convertible at any time from, and including, April 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date. As of September 30, 2024, the Notes were classified as a current liability on our Condensed Consolidated Balance Sheets. The if-converted value of the Notes did not exceed the principal balance as of  September 30, 2024.

 

The net carrying amount of the Notes was as follows:

 

  

September 30, 2024

  

March 31, 2024

 

Principal outstanding

 $97,500  $172,500 

Unamortized debt issuance costs

  (471)  (1,302)

Net carrying value

 $97,029  $171,198 

 

We recognized interest expense on the Notes as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Coupon interest expense at 1.375%

 $335  $593  $702  $1,186 

Amortization of debt issuance costs

  133   231   278   461 

Total interest and amortization of debt issuance costs

 $468  $824  $980  $1,647 

 

The effective interest rate on the Notes is approximately 1.9%.

 
v3.24.3
Note 8 - Stockholders' Equity
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

Note 8. Stockholders' Equity

 

Stock-Based Compensation

During the six months ended September 30, 2024, we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the Mesa Laboratories, Inc. Amended and Restated 2021 Equity Incentive Plan, which authorizes the issuance of 660 shares of common stock to eligible participants. Stock-based compensation expense is included in cost of revenues, selling, general and administrative, and research and development expense in the accompanying unaudited Condensed Consolidated Statements of Operations.

 

The following is a summary of RSU and PSU award activity for the six months ended September 30, 2024:

 

  

Time-Based Restricted Stock Units

  

Performance-Based Restricted Stock Units

 
  

Number of Shares

  

Weighted- Average Grant Date Fair Value per Share

  

Number of Shares

  

Weighted- Average Grant Date Fair Value per Share

 

Outstanding as of March 31, 2024

  76  $157.83   56  $240.96 

Awards granted(1)

  111   93.05   41   102.57 

Awards forfeited

  (4)  137.89   

-

   - 

Awards distributed

  (34)  165.50   -   - 

Outstanding as of September 30, 2024

  149  $108.40   97  $181.85 

 

(1)

Balances for PSUs granted are reflected at target.

 

Outstanding time-based RSUs vest and settle in shares of our common stock on a one-for-one basis. The majority of RSUs granted to employees during the six months ended September 30, 2024 vest in equal installments on the first, second, and third anniversaries of the grant date. RSUs granted to non-employee directors during the six months ended September 30, 2024 vest one year from the grant date. We generally recognize the expense relating to RSUs, net of estimated forfeitures, on a straight-line basis over the vesting period.

 

We grant PSUs to certain key employees. The number of shares earned is determined at the end of each performance period based on Mesa's achievement of certain pre-defined targets per the related award agreement. The outstanding PSUs vest upon completion of the service period described in the award agreement. We recognize the expense relating to the performance-based RSUs based on the probable outcome of achievement of the performance targets on a straight-line basis over the service period. 

 

During the six months ended September 30, 2024, the Compensation Committee of the Board of Directors created a plan to award 41 PSUs at target (“the FY25 PSUs”) to eligible employees. Of the 41 PSUs granted, 23 PSUs have a grant date fair value of $89.82 and are subject to service and company financial performance conditions. The financial performance measurement period is from April 1, 2024 through March 31, 2027. The remaining 18 PSUs have a grant date fair value of $119.54 and are subject to service and market conditions, with the market performance period measured from June 18, 2024 through June 18, 2027. The service period for all of the FY25 PSUs is from June 18, 2024 through June 18, 2027. The quantity of shares that will be earned based upon either company financial performance or market performance will range from 0% to 200% of the targeted number of shares; if the defined minimum targets are not met, then no shares will vest.

 

The following is a summary of stock option award activity for the six months ended September 30, 2024:

 

  

Stock Options

 
  

Shares Subject to Options

  

Weighted- Average Exercise Price per Share

  

Weighted-Average Remaining Contractual Life (Years)

  

Aggregate Intrinsic Value

 

Outstanding as of March 31, 2024

  194  $181.89   3.2  $26 

Awards granted

  -   -         

Awards forfeited or expired

  (14)  147.90         

Awards exercised

  -   -         

Outstanding as of September 30, 2024

  180  $184.42   2.9  $229 

 
v3.24.3
Note 9 - Earnings (Loss) Per Share
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

Note 9. Earnings (Loss) Per Share

 

The following table presents a reconciliation of the denominators used in the computation of basic and diluted earnings (loss) per share:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income (loss) available for shareholders

 $3,428  $(1,230) $6,816  $(1,779)

Weighted average outstanding shares of common stock

  5,413   5,387   5,405   5,379 

Dilutive effect of RSUs

  58   -   43   - 

Fully diluted shares

  5,471   5,387   5,448   5,379 
                 

Basic earnings (loss) per share

 $0.63  $(0.23) $1.26  $(0.33)

Diluted earnings (loss) per share

 $0.63  $(0.23) $1.25  $(0.33)

 

Potentially dilutive securities include stock options and both time and performance based RSUs (collectively "stock awards"), as well as common shares underlying our Notes. Stock awards are excluded from the calculation of diluted EPS if they are subject to performance conditions that have not yet been achieved or if they are antidilutive. Diluted EPS does not consider the impact of potentially dilutive securities in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect in such cases.

 

The following stock awards were excluded from the calculation of diluted EPS:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Assumed conversion of the Notes

  344   608   358   608 

Stock awards that were anti-dilutive

  218   282   213   255 

Total stock awards excluded from diluted EPS

  562   890   571   863 

 

Shares underlying the Notes were excluded from the diluted EPS calculation for the three and six months ended September 30, 2024 and 2023 as the impact of the assumed conversion of the Notes calculated under the if-converted method was antidilutive. The decrease in assumed conversion of the Notes is related to the partial repayment of the Notes that occurred during the six months ended September 30, 2024 (see Note 7. "Indebtedness").

 
v3.24.3
Note 10 - Income Taxes
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 10. Income Taxes

 

We reported an income tax provision as follows:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Income tax expense (benefit)

 $384  $(95) $901  $(483)
Effective tax rate  10.1%  7.2%  11.7%  21.4%

 

For interim income tax reporting, we estimate our annual effective tax rate and apply this effective tax rate to our year-to-date pre-tax income. Each quarter, our estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. Additionally, the tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur. There is a potential for volatility in the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which they relate, changes in tax laws and foreign tax holidays, settlement with taxing authorities, and foreign currency fluctuations.

 

The change in the effective tax rate for both the three and six months ended September 30, 2024 compared to the prior year periods is primary due to the valuation allowance established on the US deferred taxes during fiscal year 2024. The effective tax rate for both the three and the six months ended September 30, 2024 differed from the statutory federal rate of 21% primarily due to the valuation allowance established on the US deferred taxes during fiscal year 2024.
v3.24.3
Note 11 - Commitments and Contingencies
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

Note 11. Commitments and Contingencies

 

We are party to various legal proceedings arising in the ordinary course of business. As of  September 30, 2024, we are not party to any legal proceeding that management believes could have a material adverse effect on our unaudited consolidated financial position, results of operations, or cash flows. 

 

We expect to pay approximately $9,700 (at  September 30, 2024 exchange rates) for the GKE holdback in April 2025, pending adjustments for potential indemnification losses that  may arise. The liability is recorded at its discounted fair value of $9,400 in other accrued expenses on our unaudited Condensed Consolidated Balance Sheets as of September 30, 2024. 

 

As part of the Belyntic acquisition, we agreed to pay the sellers a contingency based upon approval of contractually specified patents. The estimated fair value of the probable remaining contingent consideration was $650 as of  September 30, 2024.

 
v3.24.3
Note 12 - Segment Data
 6 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note 12. Segment Information

 

The following tables set forth our segment information:

 

  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Revenues (a):

                

Sterilization and Disinfection Control (b)

 $22,205  $17,080  $45,162  $33,007 

Clinical Genomics

  11,499   15,549   22,903   28,918 

Biopharmaceutical Development

  11,867   9,207   23,875   19,096 

Calibration Solutions

  12,262   11,329   24,063   22,789 

Total revenues

 $57,833  $53,165  $116,003  $103,810 
                 

Gross profit:

                

Sterilization and Disinfection Control (b)

 $15,172  $12,476  $30,730  $24,067 

Clinical Genomics

  5,906   7,727   12,396   14,455 

Biopharmaceutical Development

  7,167   5,509   15,126   11,942 

Calibration Solutions

  7,210   6,407   14,452   12,838 

Reportable segment gross profit

  35,455   32,119   72,704   63,302 

Corporate and other (c)

  -   (10)  -   (10)

Gross profit

 $35,455  $32,109  $72,704  $63,292 
                 

Reconciling items:

                

Operating expense

  31,947   32,169   63,616   64,016 

Operating income (loss)

  3,508   (60)  9,088   (724)

Nonoperating expense, net

  (304)  1,265   1,371   1,538 

Earnings (loss) before income taxes

 $3,812  $(1,325) $7,717  $(2,262)

 

 

(a)

Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.

 

(b)

Includes post-acquisition GKE results during the three and six months ended September 30, 2024.

 (c)Unallocated corporate expenses are reported within corporate and other. 

 

The following table sets forth inventories by reportable segment. Our chief operating decision maker is not provided with and does not regularly review any other segment asset information.

 

  

September 30,

  

March 31,

 
  

2024

  

2024

 

Sterilization and Disinfection Control

 $5,920  $7,014 

Clinical Genomics

  11,459   11,813 

Biopharmaceutical Development

  6,001   6,304 

Calibration Solutions

  6,358   7,544 

Total inventories

 $29,738  $32,675 

 
v3.24.3
Insider Trading Arrangements
shares in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
shares
Sep. 30, 2024
shares
Insider Trading Arr Line Items    
Material Terms of Trading Arrangement [Text Block]  

Item 5. Other Information

 

The following of our directors or officers entered into written plans for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) (each, a "trading arrangement") on the dates indicated:

 

Chief Executive Officer Gary Owens entered into a trading arrangement on September 12, 2024. The trading arrangement is effective through June 10, 2025, and contemplates that Mr. Owens may exercise 30,939 non-qualified stock options and sell the resulting 30,939 shares of Mesa Labs' common stock, subject to certain conditions. 
Trading Arrangement, Securities Aggregate Available Amount 30,939 30,939
Trading Arrangement, Individual Title Chief Executive Officer  
Trading Arrangement, Individual Name Gary Owens  
Trading Arrangement Adoption Date September 12, 2024  
Rule 10b5-1 Arrangement Adopted [Flag] true  
Rule 10b5-1 Arrangement Terminated [Flag] false  
Non-Rule 10b5-1 Arrangement Adopted [Flag] false  
Non-Rule 10b5-1 Arrangement Terminated [Flag] false  
v3.24.3
Significant Accounting Policies (Policies)
 6 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Description of Business [Policy Text Block]

Description of Business

 

In this quarterly report on Form 10-Q, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries, is collectively referred to as “we,” “us,” “our,” the “Company,” or “Mesa.”

 

We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and Asia Pacific, and by independent distributors in these areas and throughout the rest of the world. We prefer markets in which we can establish a strong presence and achieve high gross profit margins.

 

As of September 30, 2024, we managed our operations in four reportable segments, or divisions:

 

 ●Sterilization and Disinfection Control - manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization, decontamination, disinfection, and cleaning processes in the medical device, pharmaceutical, and healthcare industries. The division also provides testing and laboratory services, mainly to the dental and pharmaceutical industries. 
 

●

Clinical Genomics - develops, manufactures and sells highly sensitive, low-cost, high-throughput genetic analysis tools and related consumables and services that enable clinical research labs and contract research organizations to perform genomic testing for a broad range of research applications in several therapeutic areas, such as screenings for hereditary diseases, pharmacogenetics, oncology related applications, and toxicology research.

 

●

Biopharmaceutical Development - develops, manufactures, sells and services automated systems for protein analysis (immunoassays) and peptide synthesis solutions. Immunoassays and peptide synthesis solutions accelerate the discovery, development, and manufacture of biotherapeutic therapies, among other applications. 

 

●

Calibration Solutions - develops, manufactures, sells and services quality control products using principles of advanced metrology to enable customers to measure and calibrate critical parameters in applications such as environmental and process monitoring, dialysis, gas flow, air quality and torque testing.

 
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

 

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. In the opinion of management, such unaudited information includes all adjustments, consisting of normal recurring adjustments necessary for the fair statement of our financial position and results of operations. The results of operations for interim periods are not necessarily indicative of results that may be achieved for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The Condensed Consolidated Financial Statements include the accounts of Mesa and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We made no material changes to the application of our significant accounting policies disclosed in our annual report on Form 10-K. This quarterly report should be read in conjunction with the consolidated financial statements included in our annual report on Form 10-K for the year ended  March 31, 2024.

 

Our fiscal year ends on March 31. References in this Quarterly Report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively.

 
Risk and Uncertainties, Policy [Policy Text Block]

Risks and Uncertainties

 

The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods. These estimates represent management's judgment about the outcome of future events. The global business environment continues to be impacted by cost pressures, the overall effects of economic uncertainty on customers' purchasing patterns, high interest rates, and other factors. It is not possible to accurately predict the future impact of such events and circumstances. Actual results could differ from our estimates.

 
New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

 

In  November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ASU No. 2023-07 requires all annual disclosures currently required by Topic 280 to be included in interim financial statements and requires disclosure of significant segment expenses regularly provided to the chief operating decision maker ("CODM"), a description of other segment items by reportable segment, and applicable additional measures of segment profit or loss used by the CODM when allocating resources and assessing business performance. The ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year 2025 for annual periods), and interim periods within fiscal years beginning after December 15, 2024 (our fiscal year 2026 for interim periods) on a retrospective basis. We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements.

 

In  December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU No. 2023-09, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for public business entities for fiscal years beginning after  December 15, 2024 (our fiscal year 2026), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.

 

We have reviewed all recently issued accounting pronouncements and have concluded that, other than as described above, they are either not applicable to us or are not expected to have a significant impact on our consolidated financial statements.
v3.24.3
Note 2 - Significant Transactions (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Business Acquisitions, by Acquisition [Table Text Block]
  

Three Months Ended

  

Six Months Ended

 
  September 30, 2024 

Revenues

 $5,863  $12,117 

Gross profit

  3,733   7,553 
         

Amortization of inventory step-up recorded in cost of revenues

  454   1,232 

Amortization of acquired intangibles recorded in cost of revenues

  134   244 

Amortization of acquired intangibles recorded in general and administrative expense

  956   1,488 
v3.24.3
Note 3 - Revenue (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Disaggregation of Revenue [Table Text Block]
  

Three Months Ended September 30, 2024

 
  

Sterilization and Disinfection Control (1)

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $19,473  $8,178  $3,826  $444  $31,921 

Hardware and software

  144   2,451   5,168   7,848   15,611 

Services

  2,588   870   2,873   3,970   10,301 

Total revenues

 $22,205  $11,499  $11,867  $12,262  $57,833 
  

Three Months Ended September 30, 2023

 
  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $14,749  $9,963  $4,187  $786  $29,685 

Hardware and software

  120   4,474   2,475   6,884   13,953 

Services

  2,211   1,112   2,545   3,659   9,527 

Total revenues

 $17,080  $15,549  $9,207  $11,329  $53,165 
  

Six Months Ended September 30, 2024

 
  

Sterilization and Disinfection Control (1)

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 

Consumables

 $39,869  $16,290  $7,748  $1,024  $64,931 

Hardware and software

  313   4,634   10,005   14,734   29,686 

Services

  4,980   1,979   6,122   8,305   21,386 

Total revenues

 $45,162  $22,903  $23,875  $24,063  $116,003 
  

Six Months Ended September 30, 2023

 
  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 
                     

Consumables

 $28,456  $18,732  $8,673  $1,295  $57,156 

Hardware and software

  201   7,901   5,166   13,962   27,230 

Services

  4,350   2,285   5,257   7,532   19,424 

Total revenues

 $33,007  $28,918  $19,096  $22,789  $103,810 
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]
  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

United States

 $28,078  $27,073  $54,939  $53,610 

China

  7,390   7,529   13,949   13,642 

Other

  22,365   18,563   47,115   36,558 

Total revenues

 $57,833  $53,165  $116,003  $103,810 
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

Contract liabilities as of March 31, 2024

 $15,686 

Prior year liabilities recognized in revenues during the six months ended September 30, 2024

  (6,802)

Contract liabilities added during the six months ended September 30, 2024, net of revenues recognized

  5,636 

Contract liabilities as of September 30, 2024

 $14,520 
v3.24.3
Note 4 - Fair Value Measurements (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 
  

Carrying Value

  

Fair Value (Level 2)

  

Carrying Value

  

Fair Value (Level 2)

 

Notes

 $97,029  $94,148  $171,198  $163,013 
v3.24.3
Note 5 - Supplemental Information (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 

Raw materials

 $18,215  $18,335 

Work in process

  366   1,256 

Finished goods

  11,157   13,084 

Total inventories

 $29,738  $32,675 
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 

Prepaid expenses

 $3,674  $2,932 

Deposits

  1,666   1,898 

Prepaid income taxes

  4,407   1,237 

Other current assets

  3,922   3,341 

Total prepaid expenses and other current assets

 $13,669  $9,408 
Schedule of Employee Related Liabilities [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 

Bonus payable

 $4,224  $3,838 

Wages and paid-time-off payable

  2,404   3,072 

Payroll related taxes

  2,029   1,956 

Other benefits payable

  528   1,069 

Total accrued payroll and benefits

 $9,185  $9,935 
Schedule of Accrued Liabilities [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 

Accrued business taxes

 $5,908  $5,557 

Current operating lease liabilities

  3,488   2,986 

Income taxes payable

  1,386   1,615 

Current acquisition-related holdbacks

  9,891   436 

Other

  2,193   2,264 

Total other accrued expenses

 $22,866  $12,858 
Other Noncurrent Liabilities [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 

Noncurrent operating lease liabilities

 $14,385  $6,613 

Noncurrent acquisition-related holdbacks

  160   8,792 

Other

  108   208 

Total other noncurrent liabilities

 $14,653  $15,613 
Property, Plant and Equipment [Table Text Block]
  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Depreciation expense in cost of revenues

 $904  $655  $1,766  $1,329 

Depreciation expense in operating expense

  614   256   1,156   496 

Total depreciation expense

 $1,518  $911  $2,922  $1,825 
v3.24.3
Note 6 - Goodwill and Intangible Assets, Net (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 

Customer relationships

 $194,931  $(113,003) $81,928  $189,911  $(104,528) $85,383 

Other intangibles

  62,320   (35,425)  26,895   61,161   (32,792)  28,369 

Total finite-lived intangible assets

 $257,251  $(148,428) $108,823  $251,072  $(137,320) $113,752 
Finite-Lived Intangible Assets Amortization Expense [Table Text Block]
  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Amortization in cost of revenues

 $672  $1,756  $1,319  $3,484 

Amortization in general and administrative

  3,878   5,429   7,292   10,921 

Total amortization expense

 $4,550  $7,185  $8,611  $14,405 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Fiscal Year

 Amortization Expense 
  

Remainder of 2025

 $9,118 

2026

  17,586 

2027

  16,915 

2028

  16,301 

2029

  15,729 
Schedule of Goodwill [Table Text Block]
  

Sterilization and Disinfection Control

  

Clinical Genomics

  

Biopharmaceutical Development

  

Calibration Solutions

  

Total

 

March 31, 2024

 $79,430  $16,940  $46,515  $37,211   180,096 

Effect of foreign currency translation

  1,979   116   1,530   32   3,657 

September 30, 2024

 $81,409  $17,056  $48,045  $37,243  $183,753 
v3.24.3
Note 7 - Indebtedness (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Maturities of Long-Term Debt [Table Text Block]

Fiscal Year

 

Amount

 

Remainder of 2025

 $1,875 

2026

  3,750 

2027

  5,625 

2028

  5,625 

2029

  7,500 

Thereafter

  48,750 

Total Principal Remaining

 $73,125 
Convertible Debt [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 

Principal outstanding

 $97,500  $172,500 

Unamortized debt issuance costs

  (471)  (1,302)

Net carrying value

 $97,029  $171,198 
Interest Expense on Convertible Debt [Table Text Block]
  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Coupon interest expense at 1.375%

 $335  $593  $702  $1,186 

Amortization of debt issuance costs

  133   231   278   461 

Total interest and amortization of debt issuance costs

 $468  $824  $980  $1,647 
Term Loan [Member]  
Notes Tables  
Convertible Debt [Table Text Block]
  

September 30, 2024

  

March 31, 2024

 

Term Loan (8.4% as of September 30, 2024)

 $73,125  $- 

Less: discount and debt issuance costs

  (672)  - 

Less: current portion

  (3,750)  - 

Noncurrent portion

 $68,703  $- 
v3.24.3
Note 8 - Stockholders' Equity (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Share-Based Payment Arrangement, Activity [Table Text Block]
  

Time-Based Restricted Stock Units

  

Performance-Based Restricted Stock Units

 
  

Number of Shares

  

Weighted- Average Grant Date Fair Value per Share

  

Number of Shares

  

Weighted- Average Grant Date Fair Value per Share

 

Outstanding as of March 31, 2024

  76  $157.83   56  $240.96 

Awards granted(1)

  111   93.05   41   102.57 

Awards forfeited

  (4)  137.89   

-

   - 

Awards distributed

  (34)  165.50   -   - 

Outstanding as of September 30, 2024

  149  $108.40   97  $181.85 
Share-Based Payment Arrangement, Option, Activity [Table Text Block]
  

Stock Options

 
  

Shares Subject to Options

  

Weighted- Average Exercise Price per Share

  

Weighted-Average Remaining Contractual Life (Years)

  

Aggregate Intrinsic Value

 

Outstanding as of March 31, 2024

  194  $181.89   3.2  $26 

Awards granted

  -   -         

Awards forfeited or expired

  (14)  147.90         

Awards exercised

  -   -         

Outstanding as of September 30, 2024

  180  $184.42   2.9  $229 
v3.24.3
Note 9 - Earnings (Loss) Per Share (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net income (loss) available for shareholders

 $3,428  $(1,230) $6,816  $(1,779)

Weighted average outstanding shares of common stock

  5,413   5,387   5,405   5,379 

Dilutive effect of RSUs

  58   -   43   - 

Fully diluted shares

  5,471   5,387   5,448   5,379 
                 

Basic earnings (loss) per share

 $0.63  $(0.23) $1.26  $(0.33)

Diluted earnings (loss) per share

 $0.63  $(0.23) $1.25  $(0.33)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Assumed conversion of the Notes

  344   608   358   608 

Stock awards that were anti-dilutive

  218   282   213   255 

Total stock awards excluded from diluted EPS

  562   890   571   863 
v3.24.3
Note 10 - Income Taxes (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Income tax expense (benefit)

 $384  $(95) $901  $(483)
Effective tax rate  10.1%  7.2%  11.7%  21.4%
v3.24.3
Note 12 - Segment Data (Tables)
 6 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
  

Three Months Ended September 30,

  

Six Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Revenues (a):

                

Sterilization and Disinfection Control (b)

 $22,205  $17,080  $45,162  $33,007 

Clinical Genomics

  11,499   15,549   22,903   28,918 

Biopharmaceutical Development

  11,867   9,207   23,875   19,096 

Calibration Solutions

  12,262   11,329   24,063   22,789 

Total revenues

 $57,833  $53,165  $116,003  $103,810 
                 

Gross profit:

                

Sterilization and Disinfection Control (b)

 $15,172  $12,476  $30,730  $24,067 

Clinical Genomics

  5,906   7,727   12,396   14,455 

Biopharmaceutical Development

  7,167   5,509   15,126   11,942 

Calibration Solutions

  7,210   6,407   14,452   12,838 

Reportable segment gross profit

  35,455   32,119   72,704   63,302 

Corporate and other (c)

  -   (10)  -   (10)

Gross profit

 $35,455  $32,109  $72,704  $63,292 
                 

Reconciling items:

                

Operating expense

  31,947   32,169   63,616   64,016 

Operating income (loss)

  3,508   (60)  9,088   (724)

Nonoperating expense, net

  (304)  1,265   1,371   1,538 

Earnings (loss) before income taxes

 $3,812  $(1,325) $7,717  $(2,262)
Schedule of Depreciation and Amortization Expense [Table Text Block]
  

September 30,

  

March 31,

 
  

2024

  

2024

 

Sterilization and Disinfection Control

 $5,920  $7,014 

Clinical Genomics

  11,459   11,813 

Biopharmaceutical Development

  6,001   6,304 

Calibration Solutions

  6,358   7,544 

Total inventories

 $29,738  $32,675 
v3.24.3
Note 2 - Significant Transactions (Details Textual) - GKE Acquisition [Member]
$ in Thousands
Oct. 16, 2023
USD ($)
Payments to Acquire Businesses, Gross $ 87,187
Business Combination, Consideration Transferred, Liabilities Incurred 9,700
Proceeds from Lines of Credit $ 71,000
GKE GmbH and SAL GmbH [Member]  
Business Acquisition, Percentage of Voting Interests Acquired 100.00%
Beijing GKE Science & Technology Co. Ltd. [Member]  
Business Acquisition, Percentage of Voting Interests Acquired 100.00%
v3.24.3
Note 2 - Significant Transactions - Schedule of Business Acquisitions (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Gross profit $ 35,455 $ 32,109 $ 72,704 $ 63,292
GKE Acquisition [Member]        
Revenues 5,863   12,117  
Gross profit 3,733   7,553  
GKE Acquisition [Member] | Inventory Step-up Related to Cost of Revenue [Member]        
Amortization of inventory step-up recorded in cost of revenues 454   1,232  
GKE Acquisition [Member] | Cost of Revenues Related to Intangibles Acquired [Member]        
Amortization of inventory step-up recorded in cost of revenues 134   244  
GKE Acquisition [Member] | General and Administrative Expense [Member]        
Amortization of inventory step-up recorded in cost of revenues $ 956   $ 1,488  
v3.24.3
Note 3 - Revenue (Details Textual) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue from Contract with Customer, Excluding Assessed Tax [1] $ 57,833 $ 53,165 $ 116,003 $ 103,810
Sterilization and Disinfection Control [Member] | GKE GmbH [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax $ 5,863   $ 12,117  
[1] Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.
v3.24.3
Note 3 - Revenue - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue from Contract with Customer, Excluding Assessed Tax [1] $ 57,833 $ 53,165 $ 116,003 $ 103,810
Consumables [Member] | Transferred at Point in Time [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 31,921 29,685 64,931 57,156
Hardware and Software [Member] | Transferred at Point in Time [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 15,611 13,953 29,686 27,230
Service [Member] | Transferred at Point in Time [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 10,301 9,527 21,386 19,424
Operating Segments [Member] | Sterilization and Disinfection Control [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax [1],[2] 22,205 [3] 17,080 45,162 [4] 33,007
Operating Segments [Member] | Clinical Genomics [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax [1] 11,499 15,549 22,903 28,918
Operating Segments [Member] | Biopharmaceutical Development [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax [1] 11,867 9,207 23,875 19,096
Operating Segments [Member] | Calibration Solutions [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax [1] 12,262 11,329 24,063 22,789
Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 19,473 [3] 14,749 39,869 [4] 28,456
Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 8,178 9,963 16,290 18,732
Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 3,826 4,187 7,748 8,673
Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 444 786 1,024 1,295
Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 144 [3] 120 313 [4] 201
Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 2,451 4,474 4,634 7,901
Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 5,168 2,475 10,005 5,166
Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 7,848 6,884 14,734 13,962
Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 2,588 [3] 2,211 4,980 [4] 4,350
Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 870 1,112 1,979 2,285
Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax 2,873 2,545 6,122 5,257
Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax $ 3,970 $ 3,659 $ 8,305 $ 7,532
[1] Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.
[2] Includes post-acquisition GKE results during the three and six months ended September 30, 2024.
[3] Revenues of $5,863 from GKE are included in the Sterilization and Disinfection Control division during the three months ended September 30, 2024.
[4] Revenues of $12,117 from GKE are included in the Sterilization and Disinfection Control division during the six months ended September 30, 2024.
v3.24.3
Note 3 - Revenue - Revenues From External Customers (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue from Contract with Customer, Excluding Assessed Tax [1] $ 57,833 $ 53,165 $ 116,003 $ 103,810
UNITED STATES        
Revenue from Contract with Customer, Excluding Assessed Tax 28,078 27,073 54,939 53,610
CHINA        
Revenue from Contract with Customer, Excluding Assessed Tax 7,390 7,529 13,949 13,642
Other [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax $ 22,365 $ 18,563 $ 47,115 $ 36,558
[1] Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.
v3.24.3
Note 3 - Revenue - Contract Liabilities (Details)
$ in Thousands
 6 Months Ended
Sep. 30, 2024
USD ($)
Contract liabilities, balance $ 15,686
Prior year liabilities recognized in revenues during the six months ended September 30, 2024 (6,802)
Contract liabilities added during the six months ended September 30, 2024, net of revenues recognized 5,636
Contract liabilities, balance $ 14,520
v3.24.3
Note 4 - Fair Value Measurements (Details Textual)
$ in Thousands
 3 Months Ended
Sep. 30, 2024
USD ($)
Apr. 05, 2024
USD ($)
Mar. 31, 2024
USD ($)
Nov. 17, 2022
USD ($)
Aug. 12, 2019
Long-Term Debt $ 73,125        
GKE Acquisition [Member]          
Business Combination, Hold Back Consideration Liability 9,700        
Business Combination, Hold Back Consideration Liability, Fair Value 9,400        
GKE Acquisition [Member] | Fair Value, Inputs, Level 3 [Member]          
Business Combination, Hold Back Consideration Liability, Fair Value 9,400        
Belyntic Acquisition [Member]          
Business Combination, Contingent Consideration, Liability 750        
Business Combination, Contingent Consideration, Liability Fair Value 650        
Belyntic Acquisition [Member] | Other Long-term Liabilities [Member]          
Business Combination Contingent Consideration Liability, At Acquisition Date       $ 1,500  
Belyntic Acquisition [Member] | Fair Value, Inputs, Level 3 [Member]          
Business Combination, Contingent Consideration, Liability Fair Value 650        
Outstanding 2025 Notes [Member]          
Debt Instrument, Repurchase Amount   $ 75,000      
Long-Term Debt 97,500        
Senior Notes [Member] | The Notes [Member]          
Debt Instrument, Interest Rate, Stated Percentage   1.375%     1.375%
Long-Term Debt $ 97,029   $ 171,198    
Accounts Receivable [Member] | Customer Concentration Risk [Member]          
Number of Major Customers 0        
v3.24.3
Note 4 - Fair Value Measurements - Fair Value and Carrying Value of the Notes (Details) - Senior Notes [Member] - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Reported Value Measurement [Member]    
Notes $ 97,029 $ 171,198
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]    
Notes $ 94,148 $ 163,013
v3.24.3
Note 5 - Supplemental Information (Details Textual) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Depreciation $ 1,518 $ 911 $ 2,922 $ 1,825
GKE Acquisition [Member]        
Depreciation $ 321   $ 625  
v3.24.3
Note 5 - Supplemental Information - Inventories (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Raw materials $ 18,215 $ 18,335
Work in process 366 1,256
Finished goods 11,157 13,084
Total inventories $ 29,738 $ 32,675
v3.24.3
Note 5 - Supplemental Information - Prepaid and Other Current Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Prepaid expenses $ 3,674 $ 2,932
Deposits 1,666 1,898
Prepaid income taxes 4,407 1,237
Other current assets 3,922 3,341
Total prepaid expenses and other current assets $ 13,669 $ 9,408
v3.24.3
Note 5 - Supplemental Information - Accrued Payroll and Benefits (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Bonus payable $ 4,224 $ 3,838
Wages and paid-time-off payable 2,404 3,072
Payroll related taxes 2,029 1,956
Other benefits payable 528 1,069
Total accrued payroll and benefits $ 9,185 $ 9,935
v3.24.3
Note 5 - Supplemental Information - Other Accrued Expenses (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Current operating lease liabilities $ 3,488 $ 2,986
Income taxes payable 1,386 1,615
Current acquisition-related holdbacks 9,891 436
Other 2,193 2,264
Total other accrued expenses 22,866 12,858
Other Accrued Expenses [Member]    
Accrued business taxes $ 5,908 $ 5,557
v3.24.3
Note 5 - Supplemental Information - Other Noncurrent Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Other $ 14,653 $ 15,613
GKE Acquisition [Member]    
Noncurrent operating lease liabilities 14,385 6,613
Noncurrent acquisition-related holdbacks 160 8,792
Other 108 208
Total other noncurrent liabilities $ 14,653 $ 15,613
v3.24.3
Note 5 - Supplemental Information - Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Depreciation, Total $ 1,518 $ 911 $ 2,922 $ 1,825
Cost of Sales [Member]        
Depreciation, Total 904 655 1,766 1,329
Operating Expense [Member]        
Depreciation, Total $ 614 $ 256 $ 1,156 $ 496
v3.24.3
Note 6 - Goodwill and Intangible Assets, Net - Other Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Gross carrying amount $ 257,251 $ 251,072
Accumulated amortization (148,428) (137,320)
Net carrying amount 108,823 113,752
Customer Relationships [Member]    
Gross carrying amount 194,931 189,911
Accumulated amortization (113,003) (104,528)
Net carrying amount 81,928 85,383
Other Intangible Assets [Member]    
Gross carrying amount 62,320 61,161
Accumulated amortization (35,425) (32,792)
Net carrying amount $ 26,895 $ 28,369
v3.24.3
Note 6 - Goodwill and Intangible Assets, Net - Amortization Expense for Finite-lived Intangible Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Amortization of acquisition-related intangibles $ 4,550 $ 7,185 $ 8,611 $ 14,405
Cost of Sales [Member]        
Amortization of acquisition-related intangibles 672 1,756 1,319 3,484
General and Administrative Expense [Member]        
Amortization of acquisition-related intangibles $ 3,878 $ 5,429 $ 7,292 $ 10,921
v3.24.3
Note 6 - Goodwill and Intangible Assets, Net - Estimated Amortization Expense (Details)
$ in Thousands
Sep. 30, 2024
USD ($)
Remainder of 2025 $ 9,118
2026 17,586
2027 16,915
2028 16,301
2029 $ 15,729
v3.24.3
Note 6 - Goodwill and Intangible Assets, Net - Change in the Carrying Amount of Goodwill (Details)
$ in Thousands
 6 Months Ended
Sep. 30, 2024
USD ($)
Goodwill $ 180,096
Effect of foreign currency translation 3,657
Goodwill 183,753
Operating Segments [Member] | Sterilization and Disinfection Control [Member]  
Goodwill 79,430
Effect of foreign currency translation 1,979
Goodwill 81,409
Operating Segments [Member] | Clinical Genomics [Member]  
Goodwill 16,940
Effect of foreign currency translation 116
Goodwill 17,056
Operating Segments [Member] | Biopharmaceutical Development [Member]  
Goodwill 46,515
Effect of foreign currency translation 1,530
Goodwill 48,045
Operating Segments [Member] | Calibration Solutions [Member]  
Goodwill 37,211
Effect of foreign currency translation 32
Goodwill $ 37,243
v3.24.3
Note 7 - Indebtedness (Details Textual)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Oct. 01, 2024
USD ($)
Apr. 05, 2024
USD ($)
Mar. 05, 2021
USD ($)
Aug. 12, 2019
USD ($)
$ / shares
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Mar. 31, 2024
USD ($)
Oct. 05, 2023
USD ($)
Long-Term Debt         $ 73,125   $ 73,125      
Repayments of Debt             16,875 $ 13,000    
Gain (Loss) on Extinguishment of Debt         (0) $ (0) 3,197 $ (0)    
The Credit Facility Term Loan [Member]                    
Debt Instrument, Fee Amount         1,987   1,987      
Senior Secured Credit Agreement [Member]                    
Debt Instrument, Term (Year)     4 years              
Long-Term Debt         35,500   35,500      
Line of Credit Facility, Remaining Borrowing Capacity         89,500   89,500      
Senior Secured Credit Agreement [Member] | Prepaid Expenses, Other and Other Assets [Member]                    
Debt Issuance Costs, Net         1,353   1,353   $ 321  
Senior Secured Credit Agreement [Member] | Subsequent Event [Member]                    
Repayments of Lines of Credit $ 4,500                  
Senior Secured Credit Agreement [Member] | The Credit Facility Term Loan [Member]                    
Debt Instrument, Fee Amount         $ 745   745      
Senior Secured Credit Agreement [Member] | Maximum [Member]                    
Debt Instrument, Basis Spread on Variable Rate         3.50%          
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage         0.35%          
Senior Secured Credit Agreement [Member] | Maximum [Member] | The Credit Facility Term Loan [Member]                    
Line of Credit Facility, Maximum Borrowing Capacity     $ 75,000             $ 125,000
Senior Secured Credit Agreement [Member] | Minimum [Member]                    
Debt Instrument, Basis Spread on Variable Rate         1.50%          
Fixed Charge Coverage Ratio   1.25                
Senior Leverage Ratio   3.5                
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage         0.20%          
Senior Secured Credit Agreement [Member] | Minimum [Member] | The Credit Facility Term Loan [Member]                    
Line of Credit Facility, Maximum Borrowing Capacity     25,000              
Senior Secured Credit Agreement [Member] | Swingline Loan [Member] | Maximum [Member]                    
Line of Credit Facility, Maximum Borrowing Capacity     5,000              
Senior Secured Credit Agreement [Member] | Revolving Credit Facility [Member]                    
Line of Credit Facility, Maximum Borrowing Capacity     75,000              
Debt Instrument, Fee Amount         $ 1,242   $ 1,242      
Senior Secured Credit Agreement [Member] | Letter of Credit [Member] | Maximum [Member]                    
Line of Credit Facility, Maximum Borrowing Capacity     $ 2,500              
The Credit Facility Term Loan [Member]                    
Debt Instrument, Interest Rate, Effective Percentage         8.40%   8.40%      
Debt Instrument, Covenant, Maximum Total Leverage Ratio for the First Five Testing Dates   4.5                
Debt Instrument, Covenant, Maximum Total Leverage Ratio for the Sixth, Seventh, and Eighth Testing Dates   4                
Debt Instrument, Covenant, Maximum Total Leverage Ratio Following the Ninth Testing date   3.5                
Term Loan [Member]                    
Debt Instrument, Interest Rate, Effective Percentage         8.13%   8.13%      
Long-Term Debt, Gross   $ 75,000     $ 73,125   $ 73,125   0  
Debt Instrument, Periodic Payment, Principal         $ 937   $ 1,875      
The Notes [Member] | Senior Notes [Member]                    
Debt Instrument, Interest Rate, Effective Percentage         1.90%   1.90%      
Long-Term Debt, Gross         $ 97,500   $ 97,500   172,500  
Long-Term Debt         97,029   97,029   171,198  
Debt Issuance Costs, Net         471   471   $ 1,302  
Debt Instrument, Face Amount       $ 172,500            
Proceeds from Convertible Debt       $ 167,056            
Debt Instrument, Interest Rate, Stated Percentage   1.375%   1.375%            
Debt Instrument, Convertible, Conversion Ratio Per 1,000 Principal       3.5273            
Debt Instrument, Convertible, Conversion Price (in dollars per share) | $ / shares       $ 283.5            
Outstanding 2025 Notes [Member]                    
Long-Term Debt         $ 97,500   97,500      
Debt Instrument, Repurchased Face Amount   $ 75,000                
Repayments of Debt   71,250                
Interest Payable   $ 160                
Gain (Loss) on Extinguishment of Debt             $ 3,197      
v3.24.3
Note 7 - Indebtedness - Quarterly Periodic Payments (Details)
$ in Thousands
Sep. 30, 2024
USD ($)
Remainder of 2025 $ 1,875
2026 3,750
2027 5,625
2028 5,625
2029 7,500
Thereafter 48,750
Total Principal Remaining $ 73,125
v3.24.3
Note 7 - Indebtedness - Carrying Amount of the Term Loan (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Apr. 05, 2024
Mar. 31, 2024
Less: current portion $ (3,750)   $ 0
Noncurrent portion 68,703   0
Term Loan [Member]      
Term Loan (8.4% as of September 30, 2024) 73,125 $ 75,000 0
Less: discount and debt issuance costs (672)   0
Less: current portion (3,750)   0
Noncurrent portion $ 68,703   $ 0
v3.24.3
Note 7 - Indebtedness - Carrying Amount of the Term Loan (Details) (Parentheticals)
 6 Months Ended
Sep. 30, 2024
Term Loan [Member]  
Current interest rate 8.40%
v3.24.3
Note 7 - Indebtedness - Carrying Amount of the Notes (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Total Principal Remaining $ 73,125  
The Notes [Member] | Senior Notes [Member]    
Term Loan (8.4% as of September 30, 2024) 97,500 $ 172,500
Unamortized debt issuance costs (471) (1,302)
Total Principal Remaining $ 97,029 $ 171,198
v3.24.3
Note 7 - Indebtedness - Interest Expense on the Notes (Details) - The Notes [Member] - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Coupon interest expense at 1.375% $ 335 $ 593 $ 702 $ 1,186
Amortization of debt issuance costs 133 231 278 461
Total interest and amortization of debt issuance costs $ 468 $ 824 $ 980 $ 1,647
v3.24.3
Note 8 - Stockholders' Equity (Details Textual) - $ / shares
shares in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Jun. 30, 2024
Restricted Stock Units (RSUs) [Member] | Non-employee Directors [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) 1 year    
The FY25 PSUs [Member] | Eligible Employees [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares) 41 41  
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized for Service and Company Financial Performance Conditions (in shares)   23  
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value, Shares Subject to Service and Company Performance (in dollars per share)   $ 89.82  
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized, Subject to Service and Market Conditions (in shares)   18  
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value, Subject to Service and Market Conditions (in dollars per share)   $ 119.54  
The FY25 PSUs [Member] | Eligible Employees [Member] | Minimum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award Number of Shares Issued Upon Vesting, Percentage   0.00%  
The FY25 PSUs [Member] | Eligible Employees [Member] | Maximum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award Number of Shares Issued Upon Vesting, Percentage   200.00%  
The 2021 Equity Plan [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares)     660
v3.24.3
Note 8 - Stockholders' Equity - Schedule of Restricted Stock Unit Activity (Details)
 6 Months Ended
Sep. 30, 2024
$ / shares
shares
Restricted Stock Units (RSUs) [Member]  
Awards Outstanding (in shares) | shares 76
Awards Outstanding, weighted average grant date fair value per share (in dollars per share) | $ / shares $ 157.83
Awards granted(1) (in shares) | shares 111 [1]
Awards granted, weighted average grant date fair value per share (1) (in dollars per share) | $ / shares $ 93.05 [1]
Awards forfeited (in shares) | shares (4)
Awards forfeited, weighted average grant date fair value per share (in dollars per share) | $ / shares $ 137.89
Awards distributed (in shares) | shares (34)
Awards distributed, weighted average grant date fair value per share (in dollars per share) | $ / shares $ 165.5
Awards Outstanding (in shares) | shares 149
Awards Outstanding, weighted average grant date fair value per share (in dollars per share) | $ / shares $ 108.4
Performance Stock Units [Member]  
Awards Outstanding (in shares) | shares 56
Awards Outstanding, weighted average grant date fair value per share (in dollars per share) | $ / shares $ 240.96
Awards granted(1) (in shares) | shares 41 [1]
Awards granted, weighted average grant date fair value per share (1) (in dollars per share) | $ / shares $ 102.57 [1]
Awards forfeited (in shares) | shares
Awards forfeited, weighted average grant date fair value per share (in dollars per share) | $ / shares $ 0
Awards distributed (in shares) | shares 0
Awards distributed, weighted average grant date fair value per share (in dollars per share) | $ / shares $ 0
Awards Outstanding (in shares) | shares 97
Awards Outstanding, weighted average grant date fair value per share (in dollars per share) | $ / shares $ 181.85
[1] Balances for PSUs granted are reflected at target.
v3.24.3
Note 8 - Stockholders' Equity - Schedule of Stock Option Award Activity (Details)
$ / shares in Units, shares in Thousands, $ in Thousands
 6 Months Ended 12 Months Ended
Sep. 30, 2024
USD ($)
$ / shares
shares
Mar. 31, 2024
USD ($)
$ / shares
shares
Options outstanding (in shares) | shares 194  
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares $ 181.89  
Outstanding, Weighted- Average Remaining Contractual Life (Year) 2 years 10 months 24 days 3 years 2 months 12 days
Outstanding, Aggregate Intrinsic Value | $ $ 229 $ 26
Options granted (in shares) | shares 0  
Awards granted, weighted average exercise price (in dollars per share) | $ / shares $ 0  
Options forfeited or expired (in shares) | shares (14)  
Awards forfeited or expired, weighted average exercise price (in dollars per share) | $ / shares $ 147.9  
Awards exercised (in shares) | shares 0  
Awards exercised, weighted average exercise price (in dollars per share) | $ / shares $ 0  
Options outstanding (in shares) | shares 180 194
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares $ 184.42 $ 181.89
v3.24.3
Note 9 - Earnings (Loss) Per Share - Computation of Net Income Per Share, Basic & Diluted (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Net income (loss) $ 3,428 $ (1,230) $ 6,816 $ (1,779)
Weighted average outstanding shares of common stock (in shares) 5,413 5,387 5,405 5,379
Dilutive effect of RSUs (in shares) 58 0 43 0
Fully diluted shares (in shares) 5,471 5,387 5,448 5,379
Basic earnings (loss) per share (in dollars per share) $ 0.63 $ (0.23) $ 1.26 $ (0.33)
Diluted earnings (loss) per share (in dollars per share) $ 0.63 $ (0.23) $ 1.25 $ (0.33)
v3.24.3
Note 9 - Earnings (Loss) Per Share - Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares
shares in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Total stock awards excluded from diluted EPS (in shares) 562 890 571 863
Assumed Conversion of Convertible Debt [Member]        
Total stock awards excluded from diluted EPS (in shares) 344 608 358 608
Stock Awards that were Antidilutive [Member]        
Total stock awards excluded from diluted EPS (in shares) 218 282 213 255
v3.24.3
Note 10 - Income Taxes (Details Textual)
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00%
v3.24.3
Note 10 - Income Taxes - Provisions for Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income tax expense (benefit) $ 384 $ (95) $ 901 $ (483)
Effective tax rate 10.10% 7.20% 11.70% 21.40%
v3.24.3
Note 11 - Commitments and Contingencies (Details Textual)
$ in Thousands
Sep. 30, 2024
USD ($)
GKE Acquisition [Member]  
Business Combination, Hold Back Consideration Liability $ 9,700
Business Combination, Hold Back Consideration Liability, Fair Value 9,400
Belyntic Acquisition [Member]  
Business Combination, Contingent Consideration, Liability Fair Value $ 650
v3.24.3
Note 12 - Segment Data - Operating Segment Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue from Contract with Customer, Excluding Assessed Tax [1] $ 57,833 $ 53,165 $ 116,003 $ 103,810
Gross profit 35,455 32,109 72,704 63,292
Operating expense 31,947 32,169 63,616 64,016
Operating income (loss) 3,508 (60) 9,088 (724)
Nonoperating expense, net 304 (1,265) (1,371) (1,538)
Operating Segments [Member]        
Gross profit 35,455 32,119 72,704 63,302
Operating expense 31,947 32,169 63,616 64,016
Operating income (loss) 3,508 (60) 9,088 (724)
Nonoperating expense, net (304) 1,265 1,371 1,538
Earnings (loss) before income taxes 3,812 (1,325) 7,717 (2,262)
Operating Segments [Member] | Sterilization and Disinfection Control [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax [1],[2] 22,205 [3] 17,080 45,162 [4] 33,007
Gross profit [2] 15,172 12,476 30,730 24,067
Operating Segments [Member] | Clinical Genomics [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax [1] 11,499 15,549 22,903 28,918
Gross profit 5,906 7,727 12,396 14,455
Operating Segments [Member] | Biopharmaceutical Development [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax [1] 11,867 9,207 23,875 19,096
Gross profit 7,167 5,509 15,126 11,942
Operating Segments [Member] | Calibration Solutions [Member]        
Revenue from Contract with Customer, Excluding Assessed Tax [1] 12,262 11,329 24,063 22,789
Gross profit 7,210 6,407 14,452 12,838
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member]        
Gross profit [5] $ 0 $ (10) $ 0 $ (10)
[1] Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.
[2] Includes post-acquisition GKE results during the three and six months ended September 30, 2024.
[3] Revenues of $5,863 from GKE are included in the Sterilization and Disinfection Control division during the three months ended September 30, 2024.
[4] Revenues of $12,117 from GKE are included in the Sterilization and Disinfection Control division during the six months ended September 30, 2024.
[5] Unallocated corporate expenses are reported within corporate and other.
v3.24.3
Note 12 - Segment Data - Segment Depreciation and Amortization (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Mar. 31, 2024
Total inventories $ 29,738 $ 32,675
Operating Segments [Member] | Sterilization and Disinfection Control [Member]    
Total inventories 5,920 7,014
Operating Segments [Member] | Clinical Genomics [Member]    
Total inventories 11,459 11,813
Operating Segments [Member] | Biopharmaceutical Development [Member]    
Total inventories 6,001 6,304
Operating Segments [Member] | Calibration Solutions [Member]    
Total inventories $ 6,358 $ 7,544
Mesa Laboratories (NASDAQ:MLAB)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024 Click aqui para mais gráficos Mesa Laboratories.
Mesa Laboratories (NASDAQ:MLAB)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024 Click aqui para mais gráficos Mesa Laboratories.