10-Q

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 December 31, 2023

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 class	Trading Symbol	Name on each exchange on which registered
Common Stock, no par value	MLAB	The 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 5,394,051 shares of the Issuer’s common stock, no par value, outstanding as of January 29, 2024.

Table of Contents

Part I. Financial Information		1
	Item 1. Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	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	23
Part II. Other Information		24
	Item 1.  Legal Proceedings	24
	Item 1A.  Risk factors	24
	Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	24
	Item 5. Other Information	24
	Item 6.  Exhibits	25
	Signatures	26
	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

Part I. Financial Information

Item 1. Financial Statements

Mesa Laboratories, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share amounts)

	December 31,			March 31,
	2023			2023
ASSETS
Current assets:
Cash and cash equivalents	$	28,224		$	32,910
Accounts receivable, less allowance for doubtful accounts of $1,363 and $849, respectively		36,023			42,551
Inventories		35,973			34,642
Prepaid expenses and other		18,135			8,872
Total current assets		118,355			118,975
Noncurrent assets:
Property, plant and equipment, net of accumulated depreciation of $22,574 and $19,768 respectively		31,775			28,149
Deferred tax asset		1,092			1,076
Other assets		11,590			10,373
Customer relationships, net		162,890			152,189
Intellectual property, net		45,753			46,400
Other intangibles, net		24,131			18,226
Goodwill		346,183			286,444
Total assets	$	741,769		$	661,832
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,554		$	6,134
Accrued payroll and benefits		9,380			9,433
Unearned revenues		14,357			15,694
Other accrued expenses		15,892			12,098
Total current liabilities		44,183			43,359
Noncurrent liabilities:
Deferred tax liability		44,340			34,028
Other long-term liabilities		17,320			7,693
Credit facility		62,000			13,000
Convertible senior notes, net of debt issuance costs		170,965			170,272
Total liabilities		338,808			268,352
Stockholders’ equity:
Common stock, no par value; authorized 25,000,000 shares; issued and outstanding, 5,394,043 and 5,369,466 shares, respectively		340,852			332,076
Retained earnings		71,953			74,199
Accumulated other comprehensive (loss)		(9,844	)		(12,795	)
Total stockholders’ equity		402,961			393,480
Total liabilities and stockholders’ equity	$	741,769		$	661,832

See accompanying notes to Condensed Consolidated Financial Statements.

Page 1

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)

	Three Months Ended December 31,					Nine Months Ended December 31,
	2023			2022		2023			2022
Revenues	$	53,473		$	54,287	$	157,283		$	163,489
Cost of revenues		20,071			21,522		60,589			62,997
Gross profit		33,402			32,765		96,694			100,492
Operating expense:
Selling		9,737			8,437		28,363			27,660
General and administrative		19,438			16,129		55,024			54,543
Research and development		4,294			4,797		14,098			15,486
Total operating expense		33,469			29,363		97,485			97,689
Operating (loss) income		(67	)		3,402		(791	)		2,803
Nonoperating expense:
Interest expense and amortization of debt issuance costs		1,856			1,162		3,809			3,390
Other (income) expense, net		(3,869	)		324		(4,284	)		(475	)
Total nonoperating (income) expense, net		(2,013	)		1,486		(475	)		2,915
Earnings (loss) before income taxes		1,946			1,916		(316	)		(112	)
Income tax (benefit) expense		(170	)		1,465		(653	)		(431	)
Net income	$	2,116		$	451	$	337		$	319
Earnings per share:
Basic	$	0.39		$	0.08	$	0.06		$	0.06
Diluted	$	0.39		$	0.08	$	0.06		$	0.06
Weighted-average common shares outstanding:
Basic		5,393			5,339		5,384			5,312
Diluted		5,396			5,360		5,394			5,354

See accompanying notes to Condensed Consolidated Financial Statements.

Page 2

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

(in thousands) 

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Net income	$	2,116	$	451	$	337	$	319
Other comprehensive income (loss):
Foreign currency translation adjustments		10,965		11,345		2,951		(17,838	)
Comprehensive income (loss)	$	13,081	$	11,796	$	3,288	$	(17,519	)

See accompanying notes to Condensed Consolidated Financial Statements.

Page 3

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(dollars in thousands, except per share data)

	Common Stock
	Number of Shares			Amount			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
Exercise of stock options and vesting of restricted stock units		2,415			2			-			-			2
Tax withholding on vesting of restricted stock units		(98	)		(12	)		-			-			(12	)
Dividends paid, $0.16 per share		-			-			(862	)		-			(862	)
Stock-based compensation expense		-			2,993			-			-			2,993
Foreign currency translation		-			-			-			10,965			10,965
Net income		-			-			2,116			-			2,116
December 31, 2023		5,394,043		$	340,852		$	71,953		$	(9,844	)	$	402,961

	Common Stock
	Number of Shares			Amount			Retained Earnings			AOCI*			Total
March 31, 2022		5,265,627		$	313,460		$	76,675		$	3,666		$	393,801
Exercise of stock options and vesting of restricted stock units		31,690			1,438			-			-			1,438
Tax withholding on vesting of restricted stock units		(9	)		(2	)		-			-			(2	)
Dividends paid, $0.16 per share		-			-			(843	)		-			(843	)
Stock-based compensation expense		-			3,432			-			-			3,432
Foreign currency translation		-			-			-			(15,957	)		(15,957	)
Net (loss)		-			-			(1,438	)		-			(1,438	)
June 30, 2022		5,297,308		$	318,328		$	74,394		$	(12,291	)	$	380,431
Exercise of stock options and vesting of restricted stock units		42,014			2,778			-			-			2,778
Tax withholding on vesting of restricted stock units		(3,051	)		(572	)		-			-			(572	)
Dividends paid, $0.16 per share		-			-			(852	)		-			(852	)
Stock-based compensation expense		-			4,371			-			-			4,371
Foreign currency translation		-			-			-			(13,226	)		(13,226	)
Net income		-			-			1,306			-			1,306
September 30, 2022		5,336,271		$	324,905		$	74,848		$	(25,517	)	$	374,236
Exercise of stock options and vesting of restricted stock units		7,376			307			-			-			307
Tax withholding on vesting of restricted stock units		(1,757	)		(335	)		-			-			(335	)
Dividends paid, $0.16 per share		-			-			(855	)		-			(855	)
Stock-based compensation expense		-			2,056			-			-			2,056
Foreign currency translation		-			-			-			11,345			11,345
Net income		-			-			451			-			451
December 31, 2022		5,341,890		$	326,933		$	74,444		$	(14,172	)	$	387,205

*Accumulated Other Comprehensive (Loss) Income.

See accompanying notes to Condensed Consolidated Financial Statements.

Page 4

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Nine Months Ended December 31,
	2023			2022
Cash flows from operating activities:
Net income	$	337		$	319
Adjustments to reconcile net income to net cash from operating activities:
Depreciation of property, plant and equipment		2,899			3,196
Amortization of acquisition-related intangibles		22,380			21,573
Stock-based compensation expense		9,144			9,859
Non-cash interest and debt amortization		692			679
Other		(1,614	)		(1,038	)
Cash from changes in operating assets and liabilities:
Accounts receivable, net		8,294			(1,979	)
Inventories		217			(9,191	)
Prepaid expenses and other assets		(7,841	)		(2,312	)
Accounts payable		(1,656	)		(1,339	)
Accrued liabilities and taxes payable		(124	)		(5,221	)
Unearned revenues		(1,478	)		918
Net cash provided by operating activities		31,250			15,464
Cash flows from investing activities:
Acquisitions, net of cash acquired		(79,700	)		(4,950	)
Purchases of property, plant and equipment		(2,032	)		(3,518	)
Net cash (used in) investing activities		(81,732	)		(8,468	)
Cash flows from financing activities:
Proceeds from the issuance of debt		71,000			-
Repayment of debt		(22,000	)		(30,000	)
Dividends paid		(2,583	)		(2,550	)
Proceeds from the exercise of stock options		358			4,523
Payment of tax withholding obligation on vesting of restricted stock		(726	)		(909	)
Other financing, net		(280	)		-
Net cash provided by (used in) financing activities		45,769			(28,936	)
Effect of exchange rate changes on cash and cash equivalents		27			(1,305	)
Net (decrease) in cash and cash equivalents		(4,686	)		(23,245	)
Cash and cash equivalents at beginning of period		32,910			49,346
Cash and cash equivalents at end of period	$	28,224		$	26,101

Supplemental non-cash activity:
Acquisition-related consideration held back against potential indemnification losses	$	9,526	$	-

See accompanying notes to Condensed Consolidated Financial Statements.

Page 5

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 multinational 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 December 31, 2023, 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 and disinfection processes in the pharmaceutical, healthcare, medical device, and dental industries. The division also provides testing and laboratory services, mainly to the dental industry. 

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

● Biopharmaceutical Development - 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. 

● Calibration Solutions - 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.

Unallocated corporate expenses are reported within Corporate and Other.

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, 2023.

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.

Prior Period Reclassifications

Certain prior year amounts presented have been reclassified to conform with current presentation. The reclassifications have not resulted in any changes to consolidated or segment amounts reported in the Consolidated Financial Statements for any periods presented in this Form 10-Q.

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 pressure, 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 periods 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 guidance is effective for public business entities for fiscal years beginning after December 31, 2023 (our fiscal year 2025), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our financial statements.

Page 6

 

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 financial statements.

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

Acquisition of GKE

In accordance with the sale and purchase agreement executed October 14, 2023, we acquired 100% of the outstanding shares of GKE GmbH and SAL GmbH effective October 16, 2023, and upon approval by applicable Chinese regulators, 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”), effective December 31, 2023 (the "GKE acquisition"). GKE primarily 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’s strength in chemical indicators and our Sterilization and Disinfection Control division’s strength in biologic indictors are complementary, 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. 

Total cash consideration for the GKE acquisition was $88,789, net of cash and financial liabilities and subject to customary purchase price adjustments, including working capital adjustments of approximately $1,000 expected to be paid to Mesa from the seller during the fourth quarter of fiscal year 2024. Of the total acquisition price approximately $9,500, will be held back for a period of 18 months from the acquisition closing as security against potential indemnification losses. We funded the acquisition through a combination of cash on-hand and a total of $71,000 borrowed under our line of credit (See Note 7. "Indebtedness"). We began operating GKE GmbH and SAL GmbH on October 16, 2023, and they are included as wholly owned subsidiaries in our consolidated financial statements beginning on that date. GKE China is included as a wholly owned subsidiary in our Condensed Consolidated Balance Sheets as of December 31, 2023, and we began consolidating its results of operations beginning January 1, 2024.

Preliminary Allocation of Purchase Price

We accounted for the GKE acquisition as a business combination using the acquisition method of accounting. Under the acquisition method of accounting, the acquiree's identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values and are consolidated with those of Mesa. The relief from royalty method was used to value our trade names and intellectual property, while the multi-period excess earnings method, a form of the income approach, was used to value our customer relationships. The non-compete agreements were valued using a probability-weighted estimate of the expected economic impact that would occur in the absence of the agreements. Significant judgments and estimates are required when performing valuations, including, among other assumptions, internal rates of return, revenue growth rates, customer attrition rates, and royalty rates, all of which are considered Level 3 inputs. We worked with external valuation experts to prepare the preliminary valuation using information obtained during due diligence and from professional valuation databases and other sources. These estimates were based on assumptions that we believe to be reasonable; however, actual results  may differ from these estimates.

This preliminary purchase price allocation is subject to revision as more detailed analyses are completed. If additional information about the fair value of assets acquired and liabilities assumed becomes available, we  may further revise the preliminary purchase price allocation as soon as is practical, but will not do so more than one year from the acquisition date. Only items identified as of the acquisition date are considered for subsequent adjustment. Any such revisions or changes  may be material. The final valuation may include, but may not be limited to: (1) changes in allocations to intangible assets such as customer relationships, trade names, intellectual property, and non-compete agreements, as well as goodwill, (2) changes to inventory, (3) changes to deferred tax balances, (4) changes in our assessment of the purchase price, and (5) other changes to assets and liabilities. 

The following table summarizes the allocation of the preliminary purchase price as of acquisition: 

	Life (in years)		Amount
Cash and cash equivalents			$	4,192
Accounts receivable (a)				2,252
Inventories (b)				3,823
Other current assets				188
Total current assets				10,455
Property, plant and equipment (c)				2,772
Other noncurrent assets				3,030
Intangible assets:
Goodwill (d)				54,470
Customer relationships (e)		7		26,876
Intellectual property (e)		7		3,524
Tradenames (e)		10		6,049
Non-compete agreements (e)		3		743
Total assets acquired			$	107,919
Accounts payable				11
Other current liabilities				2,491
Deferred tax liabilities				9,763
Other long-term liabilities				2,673
Total liabilities assumed				14,938
Total purchase price, net of cash acquired and subject to adjustments for working capital			$	88,789

(a)

Trade receivables are expected to be collected.

(b)

Includes $1,507 of preliminary inventory step up, which we expect to amortize within approximately three fiscal quarters from the acquisition date. During the period from October 16, 2023 to December 31, 2023, $412 of inventory step up amortization was recorded to cost of revenues. Preliminary accounting for the fair value step up of GKE China's inventory is incomplete due to the recent closing date.

Page 7

 

(c)	Includes $1,727 of preliminary property, plant and equipment step up, which will be amortized based on the underlying assets' expected lives. During the period from October 16, 2023 to December 31, 2023, $83 of depreciation expense was recorded related to the property, plant and equipment fair value step up.
(d)	Acquired goodwill of $54,470, all of which is allocated to the Sterilization Disinfection Control division, represents the value expected to arise from expanded global market opportunities, particularly in the healthcare industry, as well as expected synergies and GKE's assembled workforce, none of which qualify as amortizable intangible assets. The goodwill acquired is expected to be deductible for income tax purposes.
(e)	Acquired amortizable intangible assets are currently expected to be amortized on a straight line basis over a weighted average period of 7.4 years. The identified intangible assets will be amortized on a straight line basis over their useful lives, which approximates the pattern that the assets' economic benefits are expected to be consumed. Amortization expense for customer relationships, tradenames, and noncompete agreements will be expensed to general and administrative expense, and amortization expense for intellectual property will be expensed to cost of revenues. During the period from October 16, 2023 to December 31, 2023, $838 of amortization expense was recorded to general and administrative costs and $122 of amortization expense was recorded to cost of revenues in the Sterilization Disinfection Control division.

Acquisition related costs, such as legal and advisory fees, and integration related costs of $770 and $1,275 for the three and nine months ended  December 31, 2023, respectively, are not included as a component of consideration transferred, but are expensed in the periods in which the costs are incurred and are reflected on the Condensed Consolidated Statements of Income in general and administrative expenses.

GKE's operations contributed $3,837 to revenues and $565 of net income to our consolidated results during the three and nine months ended December 31, 2023. 

It is impracticable for us to disclose interim pro-forma information regarding the combined results of the operations of Mesa and GKE as if the acquisition had occurred at an earlier date. Prior to acquisition, GKE was a privately owned company with requirements to close their accounting records on an annual cadence rather than on an interim basis, and certain interim financial information cannot be recreated for accurate financial results. For example, prior to Mesa's ownership, GKE accounted for costs of goods sold at an unburdened rate and performed only annual inventory accounts. We would be unable to retroactively establish costs of revenues in accordance with U.S. GAAP given the unavailability of sufficient information for ending interim periods. Additionally, all transactions occurring between the three GKE entities, which are substantial, were accounted for at arms-length prior to acquisition. As presentation of pro-forma information would require extensive estimation and could not be sourced from sufficiently factual interim information reasonably aligned with U.S. GAAP, we are unable to disclose pro-forma information.   

Belyntic GmbH

On November 17, 2022, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“the Belyntic acquisition”) for $6,450, of which $4,950 was paid on the date of acquisition. The remaining $1,500 is due to the Belyntic sellers as patent applications are approved (see Note 11. "Commitments and Contingencies"). The business complements our existing peptide synthesis business, part of the Biopharmaceutical Development segment, by adding a new consumables line that can be used with the instruments we sell. The new PurePep® EasyClean products are an environmentally conscious chemistry solution to purify peptides.

During fiscal year 2023, we prepared an analysis of the valuation of net assets acquired in the Belyntic acquisition. During the nine months ended December 31, 2023, based on a detailed financial analysis of the financial model, we recorded certain measurement period adjustments to reclassify amounts from intangible assets into goodwill. Our preliminary purchase price allocation has been finalized as of December 31, 2023. 

Note 3. Revenue

We develop, manufacture, market, sell and maintain life sciences tools and quality control instruments and related consumables. We evaluate revenues internally primarily based on operating segment and the nature of goods and services provided.

Hardware sales include physical products such as instruments used for molecular and genetic analysis, protein synthesizers, medical meters, wireless sensor systems, and data loggers. 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 indicator test strips sold by our Sterilization and Disinfection Control Division are used on a standalone basis.

We also offer maintenance, calibration, and testing service contracts. Under our service contracts we perform labor and replace parts on an as-needed basis over a contractually specified period of time, or perform specific, discrete services. 

Typically, revenue is recognized upon shipment of a product, upon completion of a discrete service, or over a period of time reflective of the performance period in the applicable contract, depending on when our obligation to the customer is satisfied. The significant majority of our revenues and related receivables are generated from contracts with customers that are 12 months or less in duration.

The following tables present disaggregated revenues for the three and nine months ended December 31, 2023 and December 31, 2022, respectively:

	Three Months Ended December 31, 2023
	Sterilization and Disinfection Control (1)		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	16,832	$	9,758	$	4,080	$	539	$	31,209
Hardware and Software		180		1,639		2,672		8,254		12,745
Services		2,326		1,149		2,678		3,366		9,519
Total Revenues	$	19,338	$	12,546	$	9,430	$	12,159	$	53,473

⁽¹⁾ Revenues from GKE GmbH and SAL GmbH are included in the Sterilization and Disinfection Control division beginning upon acquisition on October 16, 2023.

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	Three Months Ended December 31, 2022
	Sterilization and Disinfection Control		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	14,307	$	10,885	$	3,584	$	553	$	29,329
Hardware and Software		95		3,371		5,844		7,023		16,333
Services		1,881		1,329		2,218		3,197		8,625
Total Revenues	$	16,283	$	15,585	$	11,646	$	10,773	$	54,287

	Nine Months Ended December 31, 2023
	Sterilization and Disinfection Control (1)		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	45,288	$	28,490	$	12,753	$	1,834	$	88,365
Hardware and Software		381		9,540		7,838		22,216		39,975
Services		6,676		3,434		7,935		10,898		28,943
Total Revenues	$	52,345	$	41,464	$	28,526	$	34,948	$	157,283

⁽¹⁾ Revenues from GKE GmbH and SAL GmbH are included in the Sterilization and Disinfection Control division beginning upon acquisition on October 16, 2023.

	Nine Months Ended December 31, 2022
	Sterilization and Disinfection Control		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	41,239	$	34,815	$	11,248	$	2,272	$	89,574
Hardware and Software		619		9,349		16,656		18,696		45,320
Services		6,163		4,361		6,853		11,218		28,595
Total Revenues	$	48,021	$	48,525	$	34,757	$	32,186	$	163,489

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 December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
United States	$	25,595	$	28,645	$	79,205	$	88,756
China		4,942		7,482		18,584		18,659
Other		22,936		18,160		59,494		56,074
Total revenues	$	53,473	$	54,287	$	157,283	$	163,489

Other than China, no foreign country exceeded 10% of total revenues for the three and nine months ended December 31, 2023 and 2022.

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 Condensed Consolidated Balance Sheets, and long-term contract liabilities are included within Other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets.

A summary of contract liabilities is as follows:

Contract liabilities as of March 31, 2023	$	16,098
Prior year liabilities recognized in revenues during the nine months ended December 31, 2023		(6,858	)
Contract liabilities added during the nine months ended December 31, 2023, net of revenues recognized		5,478
Contract liabilities balance as of December 31, 2023	$	14,718

Contract liabilities primarily relate to service contracts with original expected service durations of 12 months or less and will be recognized to revenue as our performance obligations are satisfied.

Page 9

 

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. 

Historically, the financial instruments that subject us to the highest concentration of credit risk are cash and cash equivalents 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 December 31, 2023.

We have outstanding $172,500 aggregate principal amount of 1.375% convertible senior notes due  August 15, 2025 (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, and the fair value is approximately correlated to our stock price.

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

	December 31, 2023				March 31, 2023
	Carrying Value		Fair Value (Level 2)		Carrying Value		Fair Value (Level 2)
Notes	$	170,965	$	158,916	$	170,272	$	161,072

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"). We estimate the fair value of the remaining contingent consideration using Level 3 inputs and a probability-weighted outcome analysis based on our expectations of patent approval, leveraging our historical experience and expert input, and we adjust the estimated fair value at each reporting period through earnings. The fair value of the remaining contingent consideration was $1,067 as of December 31, 2023 and is recorded in other accrued expenses on the accompanying Condensed Consolidated Balance Sheets.

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. We recorded no impairments during the three and nine months ended December 31, 2023 or 2022. Fair values of such assets and liabilities require measurement using Level 3 inputs.

There were no transfers between the levels of the fair value hierarchy during the three and nine months ended December 31, 2023 or 2022.

Note 5. Supplemental Balance Sheets Information

Inventories consisted of the following:

	December 31, 2023		March 31, 2023
Raw materials	$	19,169	$	20,064
Work in process		1,155		617
Finished goods		15,649		13,961
Total inventories	$	35,973	$	34,642

Prepaid expenses and other current assets consisted of the following: 

	December 31, 2023		March 31, 2023
Prepaid expenses	$	3,271	$	2,498
Deposits		2,143		1,376
Prepaid income taxes		8,176		953
Other current assets		4,545		4,045
Total prepaid expenses and other	$	18,135	$	8,872

Accrued payroll and benefits consisted of the following:

	December 31, 2023		March 31, 2023
Bonus payable	$	3,757	$	4,461
Wages and paid-time-off payable		3,150		2,329
Payroll related taxes		1,998		1,982
Other benefits payable		475		661
Total accrued payroll and benefits	$	9,380	$	9,433

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Other accrued expenses consisted of the following: 

	December 31, 2023		March 31, 2023
Accrued business taxes	$	6,744	$	5,941
Current operating lease liabilities		3,135		2,868
Income taxes payable		1,809		992
Other		4,204		2,297
Total other accrued expenses	$	15,892	$	12,098

Note 6. Goodwill and Intangible Assets, Net

Intangible assets, the significant majority of which are finite-lived, consisted of the following:

	December 31, 2023							March 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	265,408	$	(102,518	)	$	162,890	$	238,247	$	(86,058	)	$	152,189
Intellectual property		71,169		(25,416	)		45,753		65,950		(19,550	)		46,400
Other intangibles		31,867		(7,736	)		24,131		24,793		(6,567	)		18,226
Total	$	368,444	$	(135,670	)	$	232,774	$	328,990	$	(112,175	)	$	216,815

Amortization expense for finite-lived intangible assets acquired in a business combination was as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Amortization in cost of revenues	$	1,883	$	1,695	$	5,367	$	5,094
Amortization in general and administrative		6,092		5,452		17,013		16,479
Total	$	7,975	$	7,147	$	22,380	$	21,573

For the following fiscal years ending March 31, amortization expense is estimated as follows:

Remainder of 2024	$	8,389
2025		32,663
2026		31,857
2027		31,200
2028		30,587

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

	Sterilization and Disinfection Control		Clinical Genomics			Biopharmaceutical Development		Calibration Solutions		Total
March 31, 2023	$	29,559	$	135,811		$	83,857	$	37,217		286,444
Effect of foreign currency translation		2,460		(55	)		2,009		14		4,428
Goodwill related to GKE acquisition		54,470		-			-		-		54,470
Measurement period adjustment, Belyntic Acquisition		-		-			841		-		841
December 31, 2023	$	86,489	$	135,756		$	86,707	$	37,231	$	346,183

Goodwill in the Biopharmaceutical Development division related to the Belyntic acquisition and goodwill in the Sterilization and Disinfection Control division related to the GKE acquisition are expected to be tax deductible. 

Note 7. Indebtedness

Credit Facility

On October 5, 2023, we amended the terms of our four-year senior credit facility (the “Credit Facility”) to increase the maximum principal amount available to us from $75,000 to $125,000. As of  December 31, 2023, the Credit Facility includes 1) a revolving credit facility in an amended aggregate principal amount of up to $125,000, 2) a swingline loan in an aggregate principal amount not exceeding $5,000, and 3) letters of credit in an aggregate stated amount not exceeding $2,500. The Credit Facility also provides for an incremental term loan or an increase in revolving commitments in an aggregate principal amount of at a minimum $25,000 and at a maximum $75,000, subject to the satisfaction of certain conditions and lender considerations. The Credit Facility matures in March 2025.

The financial covenants in the Credit Facility include a maximum leverage ratio of 4.5 to 1.0 for the period ended December 31, 2023, except that we  may have a leverage ratio of 5.75 to 1.0 for a period of four consecutive quarters following a permitted acquisition, including the permitted GKE acquisition consummated during the three months ended December 31, 2023. The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to 1.0. Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes, engage in certain transactions with affiliates, or conduct asset sales. As of  December 31, 2023, we were in compliance with all covenants.

Amounts borrowed under the Credit Facility bear interest at either a base rate or a SOFR rate plus an applicable spread. The interest rate on borrowings under our line of credit as of December 31, 2023 was 7.2%. We are obligated to pay quarterly unused commitment fees of between 0.15% and 0.35% of the Credit Facility’s aggregate principal amount, based on our leverage ratio. 

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During the three months ended December 31, 2023, we borrowed a total of $71,000 under the facility to fund the majority of the acquisition of GKE. See Note 2. "Significant Transactions" for further information. We paid $9,000 against the Credit Facility during our third fiscal quarter, and as of December 31, 2023, $62,000 remained outstanding. We paid an additional $4,000 on the outstanding balance in January 2024. 

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. 

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 and nine months ended December 31, 2023. As of December 31, 2023, the Notes were classified as a long-term liability on our Condensed Consolidated Balance Sheets. The if-converted value of the Notes did not exceed the principal balance as of  December 31, 2023.

The net carrying amount of the Notes was as follows:

	December 31, 2023			March 31, 2023
Principal outstanding	$	172,500		$	172,500
Unamortized debt issuance costs		(1,535	)		(2,228	)
Net carrying value	$	170,965		$	170,272

We recognized interest expense on the Notes as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Coupon interest expense at 1.375%	$	593	$	593	$	1,779	$	1,779
Amortization of debt issuance costs		231		227		692		679
Total interest and amortization of debt issuance costs	$	824	$	820	$	2,471	$	2,458

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

Note 8. Stockholders' Equity

Stock-Based Compensation

During the nine months ended December 31, 2023, we issued stock options, 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.

Expense recognized related to stock-based compensation is as follows: 

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Stock-based compensation expense	$	2,993	$	2,056	$	9,144	$	9,859
Amount of income tax expense (benefit) recognized in earnings		210		226		727		(1,855	)
Stock-based compensation expense, net of tax	$	3,203	$	2,282	$	9,871	$	8,004

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 Income. 

The following is a summary of stock option award activity for the nine months ended December 31, 2023:

	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, 2023		163		$	200.62		3.3	$	1,643
Awards granted		53			131.67
Awards forfeited or expired		(17	)		208.03
Awards exercised		(2	)		132.40
Outstanding as of December 31, 2023		197		$	182.12		3.5	$	-

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The stock options granted during the nine months ended December 31, 2023 vest in equal installments on the first, second, and third anniversary of the grant date.

The following is a summary of RSU and PSU award activity for the nine months ended December 31, 2023:

	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, 2023(1)		57		$	209.27		44	$	286.02
Awards granted(1)		54			134.03		32		132.29
Awards forfeited		(5	)		171.83		-		-
Awards distributed		(27	)		212.36		-		-
Outstanding as of December 31, 2023(1)		79		$	158.94		76	$	223.07

⁽¹⁾ Balances for PSUs 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 the RSUs granted to employees during the nine months ended December 31, 2023 vest in equal installments on the first, second, and third anniversary of the grant date. RSUs granted to certain executives during the nine months ended  December 31, 2023 vest in equal installments on September 1, 2024, June 21, 2025 and June 21, 2026. RSUs granted to non-employee directors during the nine months ended December 31, 2023 vest one year from the grant date. We 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 nine months ended December 31, 2023, the Compensation Committee of the Board of Directors created a plan to award 32 PSUs at target with a grant date fair value of $132.29 that are subject to service, performance, and market conditions to eligible employees. The service period is from June 21, 2023 through June 21, 2026. The company performance conditions will be measured for the period from April 1, 2023 through  March 31, 2024. The quantity of shares that will be earned based upon company 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 for performance. In addition, the number of PSUs earned based on company performance will be adjusted up or down by a maximum of 20% pursuant to a market-based measure of performance comparing Mesa’s share price to a peer group over the period from April 1, 2023 until March 31, 2026. 

Note 9. Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share (“diluted EPS”) is computed similarly to basic earnings per share, except that it includes the potential dilution that could occur if dilutive securities were exercised. 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.

Shares underlying the Notes were excluded from the diluted EPS calculation for the three and nine months ended December 31, 2023 and December 31, 2022 as the impact of the assumed conversion of the Notes calculated under the if-converted method was antidilutive. 

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Net income available for shareholders	$	2,116	$	451	$	337	$	319
Weighted average outstanding shares of common stock		5,393		5,339		5,384		5,312
Dilutive effect of stock options		-		17		1		28
Dilutive effect of RSUs		3		4		9		14
Fully diluted shares		5,396		5,360		5,394		5,354
Basic earnings per share	$	0.39	$	0.08	$	0.06	$	0.06
Diluted earnings per share	$	0.39	$	0.08	$	0.06	$	0.06

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Assumed conversion of the Notes		608		608		608		608
Stock awards that were anti-dilutive		277		176		223		159
Stock awards subject to performance and market conditions		57		49		46		51
Total stock awards excluded from diluted EPS		942		833		877		818

Note 10. Income Taxes

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.

Our effective income tax rate was (8.7)% and 207.5% for the three and nine months ended December 31, 2023, respectively, compared to 76.5% and 384.8% for the three and nine months ended December 31, 2022, respectively. The effective tax rate for the three and nine months ended December 31, 2023 differed from the statutory federal rate of 21% primarily due to the share-based payment awards for employees and the effect of income generated in foreign jurisdictions. The change in our effective tax rate for the three and nine months ended December 31, 2023 compared to the prior periods is primarily due to lower windfall benefits on stock option exercises.

Note 11. Commitments and Contingencies

We review the adequacy of our legal reserves on a quarterly basis and establish reserves for loss contingencies that are both probable and reasonably estimable. As of December 31, 2023, there were no material legal reserves recorded on the accompanying unaudited Condensed Consolidated Balance Sheets.

As part of the Belyntic acquisition, we have agreed to pay $1,500 to the sellers if contractually specified patents are issued. During the three months ending December 31, 2023, a subset of the patents was issued by the European Patent Office and we remitted $188 to the Belyntic sellers. An additional subset of the patents was issued in January 2024, for which we will pay the Belyntic sellers an additional $563 during the fourth quarter of fiscal year 2024. We believe it is probable the remaining patents will be issued and we will pay the sellers in full within the next 12 months. 

As part of the GKE acquisition consummated during the three months ended December 31, 2023, we have agreed to pay the GKE sellers approximately $9,500 of the acquisition price approximately 18 months following the acquisition date, pending adjustments for potential indemnification losses that may arise. The liability is recorded as in Other long-term liabilities in our Condensed Consolidated Balance Sheets as of December 31, 2023. 

Note 12. Segment Information

The following tables set forth our segment information:

	Three Months Ended December 31,					Nine Months Ended December 31,
	2023			2022		2023			2022
Revenues:
Sterilization and Disinfection Control	$	19,338		$	16,283	$	52,345		$	48,021
Clinical Genomics		12,546			15,585		41,464			48,525
Biopharmaceutical Development		9,430			11,646		28,526			34,757
Calibration Solutions		12,159			10,773		34,948			32,186
Total revenues (a)	$	53,473		$	54,287	$	157,283		$	163,489
Gross profit:
Sterilization and Disinfection Control	$	13,951		$	11,614	$	38,018		$	34,581
Clinical Genomics		6,449			8,045		20,904			26,535
Biopharmaceutical Development		5,841			7,359		17,783			21,993
Calibration Solutions		7,212			5,740		20,050			17,411
Reportable segment gross profit		33,453			32,758		96,755			100,520
Corporate and Other (b)		(51	)		7		(61	)		(28	)
Gross profit	$	33,402		$	32,765	$	96,694		$	100,492
Reconciling Items:
Operating expense		33,469			29,363		97,485			97,689
Operating (loss) income		(67	)		3,402		(791	)		2,803
Nonoperating (income) expense, net		(2,013	)		1,486		(475	)		2,915
Earnings (loss) before income taxes	$	1,946		$	1,916	$	(316	)	$	(112	)

^(a) Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.

^(b) Unallocated corporate expenses are reported within Corporate and Other. 

Page 14

 

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

	December 31,		March 31,
	2023		2023
Sterilization and Disinfection Control	$	7,593	$	3,492
Clinical Genomics		11,529		13,985
Biopharmaceutical Development		8,183		8,384
Calibration Solutions		8,668		8,781
Total inventories	$	35,973	$	34,642

Inventories from GKE total $4,077 as of December 31, 2023, net of $412 fair value amortization step-up recorded during the three months ended December 31, 2023. GKE inventories are included in our Sterilization and Disinfection Control division. 

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,” “expect,” “anticipate,” “plan,” “target,” “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, 2023 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 multinational manufacturer, developer, and seller of life science tools and quality control products and services, many of which are sold into niche markets driven by regulatory requirements. 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, as well as 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 December 31, 2023, 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, our efforts to market and sell products, 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.

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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

We 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. 

Gross profit is affected by many factors including our product mix, manufacturing efficiencies, costs of products and labor, foreign currency rates, 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 the mix of sales 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. 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 three and nine months ended December 31, 2023, approximately 52% and 50% of our revenues, respectively, were earned outside of the United States. Since we serve a number of industries across a variety of global markets, we may be affected by world-wide, regional, or industry-specific economic or political factors, trends and costs associated with a global labor force, and increasing regulation. However, our diversity in industry, geography, and product and service offerings may limit the impact of changes in specific industry trends or local economic changes in our consolidated operating results. We actively monitor trends affecting industries we operate in, including by monitoring key competitors and customers and by staying abreast of changes to local economies and how they may affect our operations.  

We continue to invest in growing Mesa through further acquisitions, which helps us address the rapid pace of technological change in our served markets, further globalize our business, and enter new markets. To that end, during the third quarter of our fiscal year 2024, we completed the acquisition of GKE, a developer and manufacturer of high-margin consumable chemical sterilization indicators used to protect patient safety across global healthcare markets. 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 began consolidating the results of GKE's operations into our financial statements and began benefitting from the acquisition in the third quarter of our fiscal year.

Several challenging macroeconomic factors persisted during the third quarter of fiscal year 2024:

● Continued softening of discretionary capital asset purchases across the life sciences tools market, contributing to declines in our organic revenues growth.

● Economic slowdowns and anti-corruption initiatives in China negatively impacting our revenues, particularly in our Clinical Genomics division.

● High interest rates resulting in expensive capital, negatively impacting our overall profitability. 

We expect these macroeconomic challenges to continue at least through the last quarter of our fiscal year 2024.

On the other hand, supply chain disruptions, labor shortages and resulting manufacturing difficulties that impacted business operations in fiscal year 2023 largely abated during the nine months ended December 31, 2023. Additionally, in response to weaker revenues, we worked to reduce operating expenses, taking steps to preserve our financial model by reducing costs in our Biopharmaceutical Development division through a reduction in force in the second quarter of fiscal year 2024, and following the loss of a significant customer to our Clinical Genomics division, Sema4, at the beginning of the third quarter of fiscal year 2023. Management's efforts, coupled with the GKE acquisition, have allowed us to maintain our gross profit margins as a percentage of revenues. Overall, our operating expenses, which include $1,275 of one-time GKE acquisition and integration costs as well as GKE's consolidated results of operations in the third quarter, remained approximately consistent during the nine months ended December 31, 2023 compared to the same period in the prior year despite a difficult overall environment.

A weakening or strengthening of foreign currencies against the United States dollar ("USD") increases or decreases our reported revenues, gross profit margins, and operating expenses, and impacts the comparability of our results between periods. Generally, the USD strengthening against major currencies adversely impacts our reported revenues, but to a lesser extent, positively impacts our reported expenses; conversely, the weakening of the U.S. dollar against major currencies positively impacts our reported revenues but negatively impacts our reported expenses. The ultimate impact to gross profit as a percentage of revenue depends on the magnitude of changes in foreign currencies. 

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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).

Revenues generated by our reportable segments for the three and nine months ended December 31, 2023 decreased 1% and 4%, respectively, largely due to softening demand for new capital equipment in the pharmaceutical markets, including lower demand for hardware sold by our Biopharmaceutical Development, as well as due to China's economic slowdown and anti-corruption initiatives. Revenues also decreased for the year to date period compared to the corresponding prior year period due to the fiscal year 2023 loss of Sema4. These decreases in revenue were partially offset by approximately $3,837 of inorganic revenues growth from the GKE acquisition during the three and nine months ended December 31, 2023.

Although revenues were lower in the first three quarters of fiscal year 2024 compared to the prior year periods, gross profit as a percentage of revenues remained steady due to our proactive cost containment efforts and favorable product mix.

Results by reportable segment are as follows:

	Revenues				Organic Revenues Growth (non-GAAP)						Gross Profit as a % of Revenues
	Three Months Ended December 31, 2023		Three Months Ended December 31, 2022		Three Months Ended December 31, 2023			Three Months Ended December 31, 2022			Three Months Ended December 31, 2023			Three Months Ended December 31, 2022
Sterilization and Disinfection Control	$	19,338	$	16,283		(4.8	%)		17.7	%		72	%		71	%
Clinical Genomics		12,546		15,585		(19.5	%)		(10.0	%)		51	%		52	%
Biopharmaceutical Development		9,430		11,646		(19.1	%)		(8.7	%)		62	%		63	%
Calibration Solutions		12,159		10,773		12.9	%		(7.3	%)		59	%		53	%
Mesa's reportable segments	$	53,473	$	54,287		(8.6	%)		(2.1	%)		63	%		60	%

	Revenues				Organic Revenues Growth (non-GAAP)						Gross Profit as a % of Revenues
	Nine Months Ended December 31, 2023		Nine Months Ended December 31, 2022		Nine Months Ended December 31, 2023			Nine Months Ended December 31, 2022			Nine Months Ended December 31, 2023			Nine Months Ended December 31, 2022
Sterilization and Disinfection Control	$	52,345	$	48,021		1.0	%		11.6	%		73	%		72	%
Clinical Genomics		41,464		48,525		(14.6	%)		(10.0	%)		50	%		55	%
Biopharmaceutical Development		28,526		34,757		(18.2	%)		8.0	%		62	%		63	%
Calibration Solutions		34,948		32,186		8.6	%		(4.7	%)		57	%		54	%
Mesa's reportable segments	$	157,283	$	163,489		(6.2	%)		3.5	%		62	%		61	%

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. 

Our unaudited condensed consolidated results of operations are as follows:

	Three Months Ended December 31,					Percentage			Nine Months Ended December 31,					Percentage
	2023			2022		Change			2023			2022		Change
Revenues	$	53,473		$	54,287		(1	%)	$	157,283		$	163,489		(4	%)
Gross profit		33,402			32,765		2	%		96,694			100,492		(4	%)
Operating expense		33,469			29,363		14	%		97,485			97,689		-	%
Operating (loss) income		(67	)		3,402		(102	%)		(791	)		2,803		(128	%)
Net income	$	2,116		$	451		369	%	$	337		$	319		6	%

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Reportable Segments

Sterilization and Disinfection Control

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

	Three Months Ended December 31,						Percentage			Nine Months Ended December 31,						Percentage
	2023			2022			Change			2023			2022			Change
Revenues	$	19,338		$	16,283			19	%	$	52,345		$	48,021			9	%
Gross profit		13,951			11,614			20	%		38,018			34,581			10	%
Gross profit as a % of revenues		72	%		71	%		1	%		73	%		72	%		1	%

Sterilization and Disinfection Control's revenues increased 19% and 9%, respectively, for the three and nine months ended December 31, 2023 compared to the prior year periods. The GKE acquisition contributed $3,837 of revenues and $2,742 of gross profit of to the Sterilization and Disinfection control division during the three and nine months ended December 31, 2023. GKE's gross profit as a percentage of revenues was 71% for the three and nine months ended December 31, 2023.

Excluding the GKE acquisition, revenues in the Sterilization and Disinfection Control division would have decreased 5% during the three months ended December 31, 2023 due to slower than usual order fulfillment, despite an increase in orders placed during the third quarter of fiscal year 2024. Revenues would have increased 1% for the nine months ended December 31, 2023 compared to the prior year period, primarily due to price increases implemented during the fourth quarter of fiscal year 2023. 

Sterilization and Disinfection Control's gross profit percentage increased 1% for both the three and nine months ended December 31, 2023 compared to the prior year periods. Excluding $412 of amortization of the non-cash inventory step-up related to the GKE acquisition during the three and nine months ended December 31, 2023, the division's gross profit would have been 74% and 73%, respectively. 

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 labs to perform genomic testing for a broad range of diagnostic and research applications in several therapeutic areas, such as screenings for hereditary diseases, pharmacogenetics, and oncology related applications.

	Three Months Ended December 31,						Percentage			Nine Months Ended December 31,						Percentage
	2023			2022			Change			2023			2022			Change
Revenues	$	12,546		$	15,585			(19	%)	$	41,464		$	48,525			(15	%)
Gross profit		6,449			8,045			(20	%)		20,904			26,535			(21	%)
Gross profit as a % of revenues		51	%		52	%		(1	%)		50	%		55	%		(5	%)

Clinical Genomics revenues decreased 19% and 15%, respectively, for the three and nine months ended December 31, 2023 compared to the prior year periods. The decreases for the three and nine months ended December 31, 2023 were primarily due to decreases in new systems-related revenues 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. Excluding the loss of Sema4, revenues from our Clinical Genomics division would have been 5% lower during the nine months ended December 31, 2023 compared to the prior year period.

Gross profit percentage for the Clinical Genomics division decreased 1% and 5%, respectively, for the three and nine months ended December 31, 2023 compared to the prior year periods, primarily due to lower revenues on a partially fixed cost base, and to a lesser extent, unfavorable product mix, particularly due to the loss of high-margin consumables revenues from Sema4 that existed during the first two quarters of fiscal year 2023. 

Although orders and revenues in China were fairly strong in the first two quarters of fiscal year 2024, we expect the ongoing macroeconomic slowdowns in China to negatively affect our reported revenues and new orders in the last quarter of fiscal year 2024. 

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 December 31,						Percentage			Nine Months Ended December 31,						Percentage
	2023			2022			Change			2023			2022			Change
Revenues	$	9,430		$	11,646			(19	%)	$	28,526		$	34,757			(18	%)
Gross profit		5,841			7,359			(21	%)		17,783			21,993			(19	%)
Gross profit as a % of revenues		62	%		63	%		(1	%)		62	%		63	%		(1	%)

Biopharmaceutical Development revenues decreased 19% and 18%, respectively, for the three and nine months ended December 31, 2023 compared to the prior year periods, primarily due to continued softening demand for capital equipment, partially offset by an increase in revenues from consumables and services as well as price increases. Despite adverse macroeconomic factors, revenues from the division's consumables and services have remained strong during fiscal year 2024, with growth of 14.3% during the nine months ended December 31, 2023 compared to the prior year period. 

Gross profit percentage for the three and nine months ended December 31, 2023 decreased 1% compared to the prior year periods primarily due to a decrease in overall revenues on a partially fixed cost base, partially offset by favorable product mix with a higher percentage of consumables and services.

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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 December 31,						Percentage			Nine Months Ended December 31,						Percentage
	2023			2022			Change			2023			2022			Change
Revenues	$	12,159		$	10,773			13	%	$	34,948		$	32,186			9	%
Gross profit		7,212			5,740			26	%		20,050			17,411			15	%
Gross profit as a % of revenues		59	%		53	%		6	%		57	%		54	%		3	%

Calibration Solutions revenues increased 13% and 9%, respectively, for the three and nine months ended December 31, 2023 compared to the prior year periods, primarily due to the abatement of production difficulties and supply constraints that limited our ability to manufacture ordered quantities of certain products during the first nine months of fiscal year 2023. This abatement has allowed us to return to normal operations during fiscal year 2024, driving steady orders along with a reduction of past due backlog. 

The Calibration Solutions division's gross profit percentage increased 6% and 3% for the three and nine months ended December 31, 2023, respectively, compared to the prior year periods, primarily due to increased revenues on a partially fixed cost base and favorable product mix.

Operating Expense

Operating expense increased 14% for the three months ended December 31, 2023 compared to the prior year period. Excluding expenses related to the acquisition and integration of GKE ($770 of acquisition and integration related costs and $1,456 of operating expenses attributable to GKE), operating expenses would have increased 6% for the three months ended December 31, 2023. We decreased our estimate of bonus payouts in both the third quarter of fiscal year 2023 and the third quarter of fiscal year 2024 based on company performance; the reduction was approximately $1,000 greater in the third quarter of fiscal year 2023.   

Operating expense remained consistent for the nine months ended December 31, 2023, primarily as a result of lower stock-based compensation expense attributable to the timing of award grants in fiscal year 2024. Additionally, cost savings from our strategic cost containment activities following the loss of Sema4 and from the reduction in force in our Biopharmaceutical Development division in the third quarter of fiscal year 2024 reduced our operating expenses. Excluding the GKE acquisition, operating expense would have decreased approximately 3% for the nine months ended December 31, 2023.

Selling Expense

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

	Three Months Ended December 31,						Percentage			Nine Months Ended December 31,						Percentage
	2023			2022			Change			2023			2022			Change
Selling expense	$	9,737		$	8,437			15	%	$	28,363		$	27,660			3	%
As a percentage of revenues		18	%		16	%		2	%		18	%		17	%		1	%

Selling expense for the three and nine months ended December 31, 2023 increased 15% and 3%, respectively, compared to the prior year periods, primarily as a result of increased marketing efforts, our implementation of Salesforce in certain divisions and backfilling select open positions in our Biopharmaceutical Division, partially offset by lower commissions on lower revenues in fiscal year 2024 to date. Excluding the GKE acquisition, selling expense for the three and nine months ended December 31, 2023 would have increased 12% and 2%, respectively. 

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 December 31,						Percentage			Nine Months Ended December 31,						Percentage
	2023			2022			Change			2023			2022			Change
General and administrative expense	$	19,438		$	16,129			21	%	$	55,024		$	54,543			1	%
As a percentage of revenues		36	%		30	%		6	%		35	%		33	%		2	%

General and administrative expenses increased 21% and 1%, respectively, for the three and nine months ended December 31, 2023 compared to the prior year periods, largely due to the GKE acquisition. Acquisition and integration costs were $770 and $1,275, respectively for the three and nine months ended December 31, 2023, compared to $251 and $874, respectively, for the three and nine months ended December 31, 2022 related to the Belyntic and Agena acquisitions. Further, amortization of intangible assets acquired in the GKE acquisition resulted in $838 of non-cash general and administrative amortization expense. The third quarter of fiscal year 2023 also included a release in bonus expense resulting from a change in the estimated payout of the bonus. Increases in general and administrative expense for the three and nine months ended December 31, 2023 were partially offset by our general cost containment measures. Excluding GKE, general and administrative expenses would have increased 13% for the three months ended December 31, 2023 and would have decreased 1% for the nine months ended December 31, 2023. 

Research and Development Expense

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

	Three Months Ended December 31,						Percentage			Nine Months Ended December 31,						Percentage
	2023			2022			Change			2023			2022			Change
Research and development expense	$	4,294		$	4,797			(10	%)	$	14,098		$	15,486			(9	%)
As a percentage of revenues		8	%		9	%		(1	%)		9	%		9	%		-	%

Research and development expenses decreased 10% and 9%, respectively, for the three and nine months ended December 31, 2023 compared to the prior year periods, primarily due to our cost containment efforts in fiscal year 2024, including the reduction in force related to our Biopharmaceutical Development division during the second quarter of fiscal year 2024 and due to the purchase of in-process research and development technology used to enhance an existing Sterilization and Disinfection Control division product offering during the first quarter of fiscal year 2023.

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Nonoperating (Income) Expense, Net

	Three Months Ended December 31,					Percentage			Nine Months Ended December 31,					Percentage
	2023			2022		Change			2023			2022		Change
Nonoperating (income) expense, net	$	(2,013	)	$	1,486		(235	%)	$	(475	)	$	2,915		(116	%)

Nonoperating (income) expense, net for the three and nine months ended December 31,2023 is composed primarily of gains and losses on foreign currency transactions as well as interest expense and amortization of the debt issuance costs associated with the Notes and the Credit Facility. In addition, during the three months ended December 31, 2023, Mesa issued an intercompany loan denominated in U.S. dollars to our wholly owned subsidiary, Mesa Germany GmbH, to purchase GKE. As a result, nonoperating income increased for the three and nine months ended December 31, 2023 as we recorded net unrealized gains on foreign currency of $3,291 resulting from the movement of the euro against the U.S. dollar.

Income Taxes

	Three Months Ended December 31,						Percentage			Nine Months Ended December 31,						Percentage
	2023			2022			Change			2023			2022			Change
Income tax (benefit)	$	(170	)	$	1,465			(112	%)	$	(653	)	$	(431	)		52	%
Effective tax rate		(8.7	%)		76.5	%		(85	%)		206.6	%		384.8	%		(178	%)

Our effective income tax rate was (8.7)% and 76.5% for the three and nine months ended December 31, 2023, respectively, and 206.6% and 384.8% for the three and nine months ended December 31, 2022, respectively. The effective tax rate for the three and nine months ended December 31, 2023 differed from the statutory federal rate of 21% primarily due to the share-based payment awards for employees and the effect of income generated in foreign jurisdictions. The change in our effective tax rate for the three and nine months ended December 31, 2023 compared to the prior period is primarily due to lower windfall benefits on stock option exercises.

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 $22,380 and $9,144 of non-cash amortization of intangible assets acquired in business combinations and stock-based compensation expense, respectively, for the three and nine months ended December 31, 2023).

Market-Based Awards

The performance-based restricted stock awards granted during the nine months ended December 31, 2023 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 Agreement^SM, 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 Agreement^SM, when necessary, will be sufficient to meet our ongoing operating requirements, scheduled interest payments on debt, dividend payments, and anticipated capital expenditures. At our option, we may settle the Notes in shares of our common stock or in cash, depending on conditions in the market and the share price of our common stock. 

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. Working capital is the amount by which current assets exceed current liabilities. We had working capital of $74,172 and $75,616 as of December 31, 2023 and March 31, 2023, respectively. As of December 31, 2023 and March 31, 2023, we had $28,224 and $32,910, respectively, of cash and cash equivalents.

As of December 31, 2023, Notes with an aggregate principal amount of $172,500 were outstanding and $62,000 was outstanding under the Credit Facility. During the three months ended December 31, 2023, we borrowed a total of $71,000 under the Credit Facility to fund the majority of the acquisition of GKE. At our current interest rate, we expect to incur interest expense of approximately $4,464 per year on borrowings of $62,000 under the Credit Facility. 

In April 2022, we entered into an Open Market Sale Agreement^SM 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, pursuing 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 declared and paid dividends of $0.16 per share during each of the quarters ended June 30, 2023, September 30, 2023, and December 31, 2023, as well as each quarter of fiscal year 2023.

In January 2024, we announced that our Board of Directors declared a quarterly cash dividend of $0.16 per share of common stock, payable on March 15, 2024, to shareholders of record at the close of business on February 29, 2024.

Page 20

Cash Flows

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

	Nine Months Ended December 31,
	2023			2022
Net cash provided by operating activities	$	31,250		$	15,464
Net cash (used in) investing activities		(81,732	)		(8,468	)
Net cash provided by (used in) financing activities		45,769			(28,936	)

Cash flows from operating activities for the nine months ended December 31, 2023 provided $31,250. Net income and non-cash adjustments totaled $33,838 for the nine months ended December 31, 2023 compared to $34,588 for the nine months ended December 31, 2022. We generated $16,536 more cash from working capital in the nine months ended December 31, 2023 than in the nine months ended December 31, 2022, primarily due to higher collections on trade receivables and lower inventory purchases, as we were building safety stock during the nine months ended December 31, 2023 to mitigate supply chain risks. Cash used in investing activities for the nine months ended December 31, 2023 increased compared to the nine months ended December 31, 2022 primarily due to the acquisition of GKE. Cash provided by financing activities primarily resulted from a $71,000 total drawdown on the Credit Facility offset by $22,000 repaid during the nine months ended December 31, 2023 compared to $30,000 repaid on the Credit Facility for the nine months ended December 31, 2022.

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, 2023, see our Annual Report on Form 10-K for the fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission on May 30, 2023.  

On a consolidated basis, as of December 31, 2023, we had contractual obligations for open purchase orders of approximately $12,539 for routine purchases of supplies and inventory, the majority of which are payable in less than one year. 

As part of the Belyntic acquisition, we agreed to pay $1,500 to the sellers if contractually specified patents related to the technology purchased are issued. We paid $188 to the Belyntic sellers during the three months ending December 31, 2023. We are committed to pay an additional $563 during the fourth quarter of fiscal year 2024, and we believe it is probable the remaining patents will be issued and we will pay the sellers in full within the next 12 months. 

As part of the GKE acquisition consummated during the three months ended December 31, 2023, we have agreed to pay the GKE sellers approximately $9,500 of the acquisition price approximately 18 months following the acquisition, pending adjustments for potential indemnification losses that may arise. The liability is recorded as in Other long-term liabilities in our Condensed Consolidated Balance Sheets as of December 31, 2023. 

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, 2023, 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.

Acquired Intangible Assets and Financial Condition 

Fair values assigned to intangible assets acquired in the GKE acquisition were measured using Level 3 inputs. Material changes in our financial condition as of December 31, 2023 compared to March 31, 2023, including changes in acquired intangibles and other balances, are primarily attributable to the GKE acquisition. 

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, to compare revenues of current periods to prior periods, in our financial and operating decision-making, and for compensation purposes.

Page 21

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 December 31, 2023	Three Months Ended December 31, 2022	Three Months Ended December 31, 2023	Three Months Ended December 31, 2022	Three Months Ended December 31, 2023	Three Months Ended December 31, 2022
Sterilization and Disinfection Control	18.8%	17.7%	(23.6%)	-%	(4.8%)	17.7%
Clinical Genomics	(19.5%)	(5.5%)	-%	(4.5%)	(19.5%)	(10.0%)
Biopharmaceutical Development	(19.0%)	(8.7%)	(0.1%)	-%	(19.1%)	(8.7%)
Calibration Solutions	12.9%	(7.3%)	-%	-%	12.9%	(7.3%)
Total Company	(1.5%)	(0.7%)	(7.1%)	(1.4%)	(8.6%)	(2.1%)

	Total Revenues Growth		Impact of Acquisitions		Organic Revenues Growth (non-GAAP)
	Nine Months Ended December 31, 2023	Nine Months Ended December 31, 2022	Nine Months Ended December 31, 2023	Nine Months Ended December 31, 2022	Nine Months Ended December 31, 2023	Nine Months Ended December 31, 2022
Sterilization and Disinfection Control	9.0%	11.6%	(8.0%)	-%	1.0%	11.6%
Clinical Genomics (1)	(14.6%)	194.4%	-%	(204.4%)	(14.6%)	(10.0%)
Biopharmaceutical Development	(17.9%)	8.0%	(0.3%)	-%	(18.2%)	8.0%
Calibration Solutions	8.6%	(4.7%)	-%	-%	8.6%	(4.7%)
Total Company	(3.8%)	30.3%	(2.4%)	(26.8%)	(6.2%)	3.5%

(1)  GAAP Clinical Genomics revenues growth was 194.4% for the nine months ended December 31, 2022 due to a significantly shorter period of ownership during the nine months ended December 31, 2021. 

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 U.S. dollars, our functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. dollars 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 U.S. dollar. 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 U.S. dollars and euros. Therefore, when the Swedish Krona strengthens or weakens against the U.S. dollar, 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 U.S. dollar, 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 December 31, 2023, we estimate that if interest rates increased 1 percentage point, we would incur approximately $620 of additional 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.

Page 22

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 December 31, 2023, 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 effective as of the end of the period covered by this report. 

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, 2023, during fiscal year 2023 we identified two material weaknesses in internal controls: 

● Fair Value Calculations - Management's review controls over fair value calculations including Management's preliminary valuation of the Belyntic acquisition were insufficient. Specifically, Management failed to utilize resources with an appropriate level of knowledge and expertise in performing and reviewing the fair value calculations including the preliminary Belyntic valuation.

● Goodwill Impairment Assessment - Management's review controls over the qualitative assessment of goodwill impairment were insufficient to identify potential impairment triggers.

Remediation Status for Material Weaknesses in Internal Control Over Financial Reporting

Beginning during the three months ended June 30, 2023, we implemented our previously-disclosed remediation plans:

● Fair Value Calculations - We obtained the services of a knowledgeable third-party valuation specialist to perform the fair value calculations for the Belyntic acquisition.

● Goodwill Impairment Assessment - Members of Management with requisite knowledge performed a formal quarterly analysis of potential impairment triggers.

As a result of our control activities, we have concluded that the material weakness regarding fair value calculations was remediated as of June 30, 2023, and the material weakness regarding goodwill impairment assessments was remediated as of September 30, 2023. We will continue to perform formal quarterly impairment trigger analyses in future periods. We will likewise continue to utilize a valuation specialist with the requisite knowledge to perform valuations for all future acquisitions of businesses, as such acquisitions occur.

Changes in Internal Control Over Financial Reporting

The GKE acquisition was completed during the three months ended December 31, 2023. 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 in the year of acquisition.

Other than the remediation measures discussed above, during the three and nine months ended December 31, 2023 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. 

Page 23

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 nine months ended December 31, 2023, 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, 2023. 

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
October 2023		38		138.39		-		162,486
November 2023		32		93.77		-		162,486
December 2023		28		138.33		-		162,486
Total		98		123.20		-		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 modified an existing trading arrangement on November 11, 2023. The trading arrangement is effective through April 2, 2024. The trading arrangement contemplates that Mr. Owens may exercise 5,000 non-qualified stock options and sell the resulting 5,000 shares of Mesa Labs' common stock, subject to certain conditions. 

Page 24

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 25

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: February 5, 2024	BY:	/s/ Gary M. Owens. Gary M. Owens Chief Executive Officer
DATED: February 5, 2024	BY:	/s/ John V. Sakys John V. Sakys Chief Financial Officer

Page 26

EX-31.1

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: February 5, 2024  /s/ Gary M. Owens Gary M. Owens Chief Executive Officer

EX-31.2

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: February 5, 2024 /s/ John V. Sakys John V. Sakys Chief Financial Officer

EX-32.1

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 December 31, 2023 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: February 5, 2024 /s/ Gary M. Owens Gary M. Owens Chief Executive Officer

EX-32.2

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 December 31, 2023, 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: February 5, 2024 /s/ John V. Sakys John V. Sakys Chief Financial Officer

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Document And Entity Information - shares	9 Months Ended
	Dec. 31, 2023	Jan. 29, 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	Q3
Document Fiscal Year Focus	2024
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
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
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Entity Small Business	false
Entity Emerging Growth Company	false
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Entity Common Stock, Shares Outstanding		5,394,051

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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Cash and cash equivalents	$ 28,224	$ 32,910
Accounts receivable, less allowance for doubtful accounts of $1,363 and $849, respectively	36,023	42,551
Inventories	35,973	34,642
Prepaid expenses and other	18,135	8,872
Total current assets	118,355	118,975
Noncurrent assets:
Property, plant and equipment, net of accumulated depreciation of $22,574 and $19,768 respectively	31,775	28,149
Deferred tax asset	1,092	1,076
Other assets	11,590	10,373
Intangible assets	232,774	216,815
Goodwill	346,183	286,444
Total assets	741,769	661,832
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	4,554	6,134
Accrued payroll and benefits	9,380	9,433
Unearned revenues	14,357	15,694
Other accrued expenses	15,892	12,098
Total current liabilities	44,183	43,359
Noncurrent liabilities:
Deferred tax liability	44,340	34,028
Other long-term liabilities	17,320	7,693
Credit facility	62,000	13,000
Convertible senior notes, net of debt issuance costs	170,965	170,272
Total liabilities	338,808	268,352
Stockholders’ equity:
Common stock, no par value; authorized 25,000,000 shares; issued and outstanding, 5,394,043 and 5,369,466 shares, respectively	340,852	332,076
Retained earnings	71,953	74,199
Accumulated other comprehensive (loss)	(9,844)	(12,795)
Total stockholders’ equity	402,961	393,480
Total liabilities and stockholders’ equity	741,769	661,832
Customer Relationships [Member]
Noncurrent assets:
Intangible assets	162,890	152,189
Intellectual Property [Member]
Noncurrent assets:
Intangible assets	45,753	46,400
Other Intangible Assets [Member]
Noncurrent assets:
Intangible assets	$ 24,131	$ 18,226

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Allowance for doubtful accounts receivable	$ 1,363	$ 849
Property, plant and equipment, accumulated Depreciation	$ 22,574	$ 19,768
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)	5,394,043	5,369,466
Common stock, outstanding (in shares)	5,394,043	5,369,466

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Revenues	$ 53,473	$ 54,287	$ 157,283	$ 163,489
Cost of revenues	20,071	21,522	60,589	62,997
Gross profit	33,402	32,765	96,694	100,492
Operating expense:
Selling	9,737	8,437	28,363	27,660
General and administrative	19,438	16,129	55,024	54,543
Research and development	4,294	4,797	14,098	15,486
Total operating expense	33,469	29,363	97,485	97,689
Operating (loss) income	(67)	3,402	(791)	2,803
Nonoperating expense:
Interest expense and amortization of debt issuance costs	1,856	1,162	3,809	3,390
Other (income) expense, net	(3,869)	324	(4,284)	(475)
Total nonoperating (income) expense, net	(2,013)	1,486	(475)	2,915
Earnings (loss) before income taxes	1,946	1,916	(316)	(112)
Income tax (benefit) expense	(170)	1,465	(653)	(431)
Net (loss) income	$ 2,116	$ 451	$ 337	$ 319
Earnings per share:
Basic earnings per share (in dollars per share)	$ 0.39	$ 0.08	$ 0.06	$ 0.06
Diluted earnings per share (in dollars per share)	$ 0.39	$ 0.08	$ 0.06	$ 0.06
Weighted-average common shares outstanding:
Basic (in shares)	5,393	5,339	5,384	5,312
Fully diluted shares (in shares)	5,396	5,360	5,394	5,354

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Net income	$ 2,116	$ 451	$ 337	$ 319
Other comprehensive income (loss):
Foreign currency translation	10,965	11,345	2,951	(17,838)
Comprehensive income (loss)	$ 13,081	$ 11,796	$ 3,288	$ (17,519)

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]		Total
Balance (in shares) at Mar. 31, 2022	5,265,627
Balance at Mar. 31, 2022	$ 313,460	$ 76,675	$ 3,666	[1]	$ 393,801
Exercise of stock options and vesting of restricted stock units (in shares)	31,690
Exercise of stock options and vesting of restricted stock units	$ 1,438				1,438
Tax withholding on vesting of restricted stock units (in shares)	(9)
Tax withholding on vesting of restricted stock units	$ (2)	0	0	[1]	(2)
Dividends paid, $0.16 per share		(843)			(843)
Stock-based compensation expense	3,432				3,432
Foreign currency translation			(15,957)	[1]	(15,957)
Net (loss) income	$ 0	(1,438)			(1,438)
Balance (in shares) at Jun. 30, 2022	5,297,308
Balance at Jun. 30, 2022	$ 318,328	74,394	(12,291)	[1]	380,431
Balance (in shares) at Mar. 31, 2022	5,265,627
Balance at Mar. 31, 2022	$ 313,460	76,675	3,666	[1]	393,801
Foreign currency translation					(17,838)
Net (loss) income					319
Balance (in shares) at Dec. 31, 2022	5,341,890
Balance at Dec. 31, 2022	$ 326,933	74,444	(14,172)	[1]	387,205
Balance (in shares) at Jun. 30, 2022	5,297,308
Balance at Jun. 30, 2022	$ 318,328	74,394	(12,291)	[1]	380,431
Exercise of stock options and vesting of restricted stock units (in shares)	42,014
Exercise of stock options and vesting of restricted stock units	$ 2,778				2,778
Tax withholding on vesting of restricted stock units (in shares)	(3,051)
Tax withholding on vesting of restricted stock units	$ (572)				(572)
Dividends paid, $0.16 per share		(852)			(852)
Stock-based compensation expense	$ 4,371				4,371
Foreign currency translation			(13,226)	[1]	(13,226)
Net (loss) income		1,306			1,306
Balance (in shares) at Sep. 30, 2022	5,336,271
Balance at Sep. 30, 2022	$ 324,905	74,848	(25,517)	[1]	374,236
Exercise of stock options and vesting of restricted stock units (in shares)	7,376
Exercise of stock options and vesting of restricted stock units	$ 307				307
Tax withholding on vesting of restricted stock units (in shares)	(1,757)
Tax withholding on vesting of restricted stock units	$ (335)				(335)
Dividends paid, $0.16 per share		(855)			(855)
Stock-based compensation expense	2,056				2,056
Foreign currency translation			11,345	[1]	11,345
Net (loss) income	$ 0	451	0		451
Balance (in shares) at Dec. 31, 2022	5,341,890
Balance at Dec. 31, 2022	$ 326,933	74,444	(14,172)	[1]	$ 387,205
Balance (in shares) at Mar. 31, 2023	5,369,466				5,369,466
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	[1]	(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 (loss) 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				5,369,466
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)					2,000
Foreign currency translation					$ 2,951
Net (loss) income					$ 337
Balance (in shares) at Dec. 31, 2023	5,394,043				5,394,043
Balance at Dec. 31, 2023	$ 340,852	71,953	(9,844)	[1]	$ 402,961
Balance (in shares) at Jun. 30, 2023	5,384,280
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]	(1,353)
Net (loss) 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
Exercise of stock options and vesting of restricted stock units (in shares)	2,415
Exercise of stock options and vesting of restricted stock units	$ 2				2
Tax withholding on vesting of restricted stock units (in shares)	(98)
Tax withholding on vesting of restricted stock units	$ (12)				(12)
Dividends paid, $0.16 per share		(862)			(862)
Stock-based compensation expense	$ 2,993				2,993
Foreign currency translation			10,965	[1]	10,965
Net (loss) income		2,116			$ 2,116
Balance (in shares) at Dec. 31, 2023	5,394,043				5,394,043
Balance at Dec. 31, 2023	$ 340,852	$ 71,953	$ (9,844)	[1]	$ 402,961

[1] Accumulated Other Comprehensive [(Loss) Income].

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022
Dividends paid, per share (in dollars per share)	$ 0.16	$ 0.16	$ 0.16	$ 0.16	$ 0.16	$ 0.16

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income	$ 337	$ 319
Adjustments to reconcile net income to net cash from operating activities:
Depreciation of property, plant and equipment	2,899	3,196
Amortization of acquisition-related intangibles	22,380	21,573
Stock-based compensation expense	9,144	9,859
Non-cash interest and debt amortization	692	679
Other	(1,614)	(1,038)
Cash from changes in operating assets and liabilities:
Accounts receivable, net	8,294	(1,979)
Inventories	217	(9,191)
Prepaid expenses and other assets	(7,841)	(2,312)
Accounts payable	(1,656)	(1,339)
Accrued liabilities and taxes payable	(124)	(5,221)
Unearned revenues	(1,478)	918
Net cash provided by operating activities	31,250	15,464
Cash flows from investing activities:
Acquisitions, net of cash acquired	(79,700)	(4,950)
Purchases of property, plant and equipment	(2,032)	(3,518)
Net cash (used in) investing activities	(81,732)	(8,468)
Cash flows from financing activities:
Proceeds from the issuance of debt	71,000	0
Repayment of debt	(22,000)	(30,000)
Dividends paid	(2,583)	(2,550)
Proceeds from the exercise of stock options	358	4,523
Payment of tax withholding obligation on vesting of restricted stock	(726)	(909)
Other financing, net	(280)	0
Net cash provided by (used in) financing activities	45,769	(28,936)
Effect of exchange rate changes on cash and cash equivalents	27	(1,305)
Net (decrease) in cash and cash equivalents	(4,686)	(23,245)
Cash and cash equivalents at beginning of period	32,910	49,346
Cash and cash equivalents at end of period	28,224	26,101
Acquisition-related consideration held back against potential indemnification losses	$ 9,526	$ 0

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

9 Months Ended

Dec. 31, 2023

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 multinational 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 December 31, 2023, 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 and disinfection processes in the pharmaceutical, healthcare, medical device, and dental industries. The division also provides testing and laboratory services, mainly to the dental industry. 

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

● Biopharmaceutical Development - 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. 

● Calibration Solutions - 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.

Unallocated corporate expenses are reported within Corporate and Other.

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, 2023.

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.

Prior Period Reclassifications

Certain prior year amounts presented have been reclassified to conform with current presentation. The reclassifications have not resulted in any changes to consolidated or segment amounts reported in the Consolidated Financial Statements for any periods presented in this Form 10-Q.

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 pressure, 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 periods 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 guidance is effective for public business entities for fiscal years beginning after December 31, 2023 (our fiscal year 2025), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our 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 financial statements.

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.

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Note 2 - Significant Transactions

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Significant Transactions [Text Block]

Note 2. Significant Transactions

Acquisition of GKE

In accordance with the sale and purchase agreement executed October 14, 2023, we acquired 100% of the outstanding shares of GKE GmbH and SAL GmbH effective October 16, 2023, and upon approval by applicable Chinese regulators, 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”), effective December 31, 2023 (the "GKE acquisition"). GKE primarily 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’s strength in chemical indicators and our Sterilization and Disinfection Control division’s strength in biologic indictors are complementary, 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. 

Total cash consideration for the GKE acquisition was $88,789, net of cash and financial liabilities and subject to customary purchase price adjustments, including working capital adjustments of approximately $1,000 expected to be paid to Mesa from the seller during the fourth quarter of fiscal year 2024. Of the total acquisition price approximately $9,500, will be held back for a period of 18 months from the acquisition closing as security against potential indemnification losses. We funded the acquisition through a combination of cash on-hand and a total of $71,000 borrowed under our line of credit (See Note 7. "Indebtedness"). We began operating GKE GmbH and SAL GmbH on October 16, 2023, and they are included as wholly owned subsidiaries in our consolidated financial statements beginning on that date. GKE China is included as a wholly owned subsidiary in our Condensed Consolidated Balance Sheets as of December 31, 2023, and we began consolidating its results of operations beginning January 1, 2024.

Preliminary Allocation of Purchase Price

We accounted for the GKE acquisition as a business combination using the acquisition method of accounting. Under the acquisition method of accounting, the acquiree's identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values and are consolidated with those of Mesa. The relief from royalty method was used to value our trade names and intellectual property, while the multi-period excess earnings method, a form of the income approach, was used to value our customer relationships. The non-compete agreements were valued using a probability-weighted estimate of the expected economic impact that would occur in the absence of the agreements. Significant judgments and estimates are required when performing valuations, including, among other assumptions, internal rates of return, revenue growth rates, customer attrition rates, and royalty rates, all of which are considered Level 3 inputs. We worked with external valuation experts to prepare the preliminary valuation using information obtained during due diligence and from professional valuation databases and other sources. These estimates were based on assumptions that we believe to be reasonable; however, actual results  may differ from these estimates.

This preliminary purchase price allocation is subject to revision as more detailed analyses are completed. If additional information about the fair value of assets acquired and liabilities assumed becomes available, we  may further revise the preliminary purchase price allocation as soon as is practical, but will not do so more than one year from the acquisition date. Only items identified as of the acquisition date are considered for subsequent adjustment. Any such revisions or changes  may be material. The final valuation may include, but may not be limited to: (1) changes in allocations to intangible assets such as customer relationships, trade names, intellectual property, and non-compete agreements, as well as goodwill, (2) changes to inventory, (3) changes to deferred tax balances, (4) changes in our assessment of the purchase price, and (5) other changes to assets and liabilities. 

The following table summarizes the allocation of the preliminary purchase price as of acquisition: 

	Life (in years)		Amount
Cash and cash equivalents			$	4,192
Accounts receivable (a)				2,252
Inventories (b)				3,823
Other current assets				188
Total current assets				10,455
Property, plant and equipment (c)				2,772
Other noncurrent assets				3,030
Intangible assets:
Goodwill (d)				54,470
Customer relationships (e)		7		26,876
Intellectual property (e)		7		3,524
Tradenames (e)		10		6,049
Non-compete agreements (e)		3		743
Total assets acquired			$	107,919
Accounts payable				11
Other current liabilities				2,491
Deferred tax liabilities				9,763
Other long-term liabilities				2,673
Total liabilities assumed				14,938
Total purchase price, net of cash acquired and subject to adjustments for working capital			$	88,789

(a)

Trade receivables are expected to be collected.

(b)

Includes $1,507 of preliminary inventory step up, which we expect to amortize within approximately three fiscal quarters from the acquisition date. During the period from October 16, 2023 to December 31, 2023, $412 of inventory step up amortization was recorded to cost of revenues. Preliminary accounting for the fair value step up of GKE China's inventory is incomplete due to the recent closing date.

(c)	Includes $1,727 of preliminary property, plant and equipment step up, which will be amortized based on the underlying assets' expected lives. During the period from October 16, 2023 to December 31, 2023, $83 of depreciation expense was recorded related to the property, plant and equipment fair value step up.
(d)	Acquired goodwill of $54,470, all of which is allocated to the Sterilization Disinfection Control division, represents the value expected to arise from expanded global market opportunities, particularly in the healthcare industry, as well as expected synergies and GKE's assembled workforce, none of which qualify as amortizable intangible assets. The goodwill acquired is expected to be deductible for income tax purposes.
(e)	Acquired amortizable intangible assets are currently expected to be amortized on a straight line basis over a weighted average period of 7.4 years. The identified intangible assets will be amortized on a straight line basis over their useful lives, which approximates the pattern that the assets' economic benefits are expected to be consumed. Amortization expense for customer relationships, tradenames, and noncompete agreements will be expensed to general and administrative expense, and amortization expense for intellectual property will be expensed to cost of revenues. During the period from October 16, 2023 to December 31, 2023, $838 of amortization expense was recorded to general and administrative costs and $122 of amortization expense was recorded to cost of revenues in the Sterilization Disinfection Control division.

Acquisition related costs, such as legal and advisory fees, and integration related costs of $770 and $1,275 for the three and nine months ended  December 31, 2023, respectively, are not included as a component of consideration transferred, but are expensed in the periods in which the costs are incurred and are reflected on the Condensed Consolidated Statements of Income in general and administrative expenses.

GKE's operations contributed $3,837 to revenues and $565 of net income to our consolidated results during the three and nine months ended December 31, 2023. 

It is impracticable for us to disclose interim pro-forma information regarding the combined results of the operations of Mesa and GKE as if the acquisition had occurred at an earlier date. Prior to acquisition, GKE was a privately owned company with requirements to close their accounting records on an annual cadence rather than on an interim basis, and certain interim financial information cannot be recreated for accurate financial results. For example, prior to Mesa's ownership, GKE accounted for costs of goods sold at an unburdened rate and performed only annual inventory accounts. We would be unable to retroactively establish costs of revenues in accordance with U.S. GAAP given the unavailability of sufficient information for ending interim periods. Additionally, all transactions occurring between the three GKE entities, which are substantial, were accounted for at arms-length prior to acquisition. As presentation of pro-forma information would require extensive estimation and could not be sourced from sufficiently factual interim information reasonably aligned with U.S. GAAP, we are unable to disclose pro-forma information.   

Belyntic GmbH

On November 17, 2022, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“the Belyntic acquisition”) for $6,450, of which $4,950 was paid on the date of acquisition. The remaining $1,500 is due to the Belyntic sellers as patent applications are approved (see Note 11. "Commitments and Contingencies"). The business complements our existing peptide synthesis business, part of the Biopharmaceutical Development segment, by adding a new consumables line that can be used with the instruments we sell. The new PurePep® EasyClean products are an environmentally conscious chemistry solution to purify peptides.

During fiscal year 2023, we prepared an analysis of the valuation of net assets acquired in the Belyntic acquisition. During the nine months ended December 31, 2023, based on a detailed financial analysis of the financial model, we recorded certain measurement period adjustments to reclassify amounts from intangible assets into goodwill. Our preliminary purchase price allocation has been finalized as of December 31, 2023. 

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Note 3 - Revenue

9 Months Ended

Dec. 31, 2023

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. We evaluate revenues internally primarily based on operating segment and the nature of goods and services provided.

Hardware sales include physical products such as instruments used for molecular and genetic analysis, protein synthesizers, medical meters, wireless sensor systems, and data loggers. 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 indicator test strips sold by our Sterilization and Disinfection Control Division are used on a standalone basis.

We also offer maintenance, calibration, and testing service contracts. Under our service contracts we perform labor and replace parts on an as-needed basis over a contractually specified period of time, or perform specific, discrete services. 

Typically, revenue is recognized upon shipment of a product, upon completion of a discrete service, or over a period of time reflective of the performance period in the applicable contract, depending on when our obligation to the customer is satisfied. The significant majority of our revenues and related receivables are generated from contracts with customers that are 12 months or less in duration.

The following tables present disaggregated revenues for the three and nine months ended December 31, 2023 and December 31, 2022, respectively:

	Three Months Ended December 31, 2023
	Sterilization and Disinfection Control (1)		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	16,832	$	9,758	$	4,080	$	539	$	31,209
Hardware and Software		180		1,639		2,672		8,254		12,745
Services		2,326		1,149		2,678		3,366		9,519
Total Revenues	$	19,338	$	12,546	$	9,430	$	12,159	$	53,473

⁽¹⁾ Revenues from GKE GmbH and SAL GmbH are included in the Sterilization and Disinfection Control division beginning upon acquisition on October 16, 2023.

	Three Months Ended December 31, 2022
	Sterilization and Disinfection Control		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	14,307	$	10,885	$	3,584	$	553	$	29,329
Hardware and Software		95		3,371		5,844		7,023		16,333
Services		1,881		1,329		2,218		3,197		8,625
Total Revenues	$	16,283	$	15,585	$	11,646	$	10,773	$	54,287

	Nine Months Ended December 31, 2023
	Sterilization and Disinfection Control (1)		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	45,288	$	28,490	$	12,753	$	1,834	$	88,365
Hardware and Software		381		9,540		7,838		22,216		39,975
Services		6,676		3,434		7,935		10,898		28,943
Total Revenues	$	52,345	$	41,464	$	28,526	$	34,948	$	157,283

⁽¹⁾ Revenues from GKE GmbH and SAL GmbH are included in the Sterilization and Disinfection Control division beginning upon acquisition on October 16, 2023.

	Nine Months Ended December 31, 2022
	Sterilization and Disinfection Control		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	41,239	$	34,815	$	11,248	$	2,272	$	89,574
Hardware and Software		619		9,349		16,656		18,696		45,320
Services		6,163		4,361		6,853		11,218		28,595
Total Revenues	$	48,021	$	48,525	$	34,757	$	32,186	$	163,489

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 December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
United States	$	25,595	$	28,645	$	79,205	$	88,756
China		4,942		7,482		18,584		18,659
Other		22,936		18,160		59,494		56,074
Total revenues	$	53,473	$	54,287	$	157,283	$	163,489

Other than China, no foreign country exceeded 10% of total revenues for the three and nine months ended December 31, 2023 and 2022.

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 Condensed Consolidated Balance Sheets, and long-term contract liabilities are included within Other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets.

A summary of contract liabilities is as follows:

Contract liabilities as of March 31, 2023	$	16,098
Prior year liabilities recognized in revenues during the nine months ended December 31, 2023		(6,858	)
Contract liabilities added during the nine months ended December 31, 2023, net of revenues recognized		5,478
Contract liabilities balance as of December 31, 2023	$	14,718

Contract liabilities primarily relate to service contracts with original expected service durations of 12 months or less and will be recognized to revenue as our performance obligations are satisfied.

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Note 4 - Fair Value Measurements

9 Months Ended

Dec. 31, 2023

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. 

Historically, the financial instruments that subject us to the highest concentration of credit risk are cash and cash equivalents 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 December 31, 2023.

We have outstanding $172,500 aggregate principal amount of 1.375% convertible senior notes due  August 15, 2025 (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, and the fair value is approximately correlated to our stock price.

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

	December 31, 2023				March 31, 2023
	Carrying Value		Fair Value (Level 2)		Carrying Value		Fair Value (Level 2)
Notes	$	170,965	$	158,916	$	170,272	$	161,072

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"). We estimate the fair value of the remaining contingent consideration using Level 3 inputs and a probability-weighted outcome analysis based on our expectations of patent approval, leveraging our historical experience and expert input, and we adjust the estimated fair value at each reporting period through earnings. The fair value of the remaining contingent consideration was $1,067 as of December 31, 2023 and is recorded in other accrued expenses on the accompanying Condensed Consolidated Balance Sheets.

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. We recorded no impairments during the three and nine months ended December 31, 2023 or 2022. Fair values of such assets and liabilities require measurement using Level 3 inputs.

There were no transfers between the levels of the fair value hierarchy during the three and nine months ended December 31, 2023 or 2022.

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Note 5 - Supplemental Balance Sheets Information

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Supplemental Balance Sheet Disclosures [Text Block]

Note 5. Supplemental Balance Sheets Information

Inventories consisted of the following:

	December 31, 2023		March 31, 2023
Raw materials	$	19,169	$	20,064
Work in process		1,155		617
Finished goods		15,649		13,961
Total inventories	$	35,973	$	34,642

Prepaid expenses and other current assets consisted of the following: 

	December 31, 2023		March 31, 2023
Prepaid expenses	$	3,271	$	2,498
Deposits		2,143		1,376
Prepaid income taxes		8,176		953
Other current assets		4,545		4,045
Total prepaid expenses and other	$	18,135	$	8,872

Accrued payroll and benefits consisted of the following:

	December 31, 2023		March 31, 2023
Bonus payable	$	3,757	$	4,461
Wages and paid-time-off payable		3,150		2,329
Payroll related taxes		1,998		1,982
Other benefits payable		475		661
Total accrued payroll and benefits	$	9,380	$	9,433

Other accrued expenses consisted of the following: 

	December 31, 2023		March 31, 2023
Accrued business taxes	$	6,744	$	5,941
Current operating lease liabilities		3,135		2,868
Income taxes payable		1,809		992
Other		4,204		2,297
Total other accrued expenses	$	15,892	$	12,098

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Note 6 - Goodwill and Intangible Assets, Net

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note 6. Goodwill and Intangible Assets, Net

Intangible assets, the significant majority of which are finite-lived, consisted of the following:

	December 31, 2023							March 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	265,408	$	(102,518	)	$	162,890	$	238,247	$	(86,058	)	$	152,189
Intellectual property		71,169		(25,416	)		45,753		65,950		(19,550	)		46,400
Other intangibles		31,867		(7,736	)		24,131		24,793		(6,567	)		18,226
Total	$	368,444	$	(135,670	)	$	232,774	$	328,990	$	(112,175	)	$	216,815

Amortization expense for finite-lived intangible assets acquired in a business combination was as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Amortization in cost of revenues	$	1,883	$	1,695	$	5,367	$	5,094
Amortization in general and administrative		6,092		5,452		17,013		16,479
Total	$	7,975	$	7,147	$	22,380	$	21,573

For the following fiscal years ending March 31, amortization expense is estimated as follows:

Remainder of 2024	$	8,389
2025		32,663
2026		31,857
2027		31,200
2028		30,587

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

	Sterilization and Disinfection Control		Clinical Genomics			Biopharmaceutical Development		Calibration Solutions		Total
March 31, 2023	$	29,559	$	135,811		$	83,857	$	37,217		286,444
Effect of foreign currency translation		2,460		(55	)		2,009		14		4,428
Goodwill related to GKE acquisition		54,470		-			-		-		54,470
Measurement period adjustment, Belyntic Acquisition		-		-			841		-		841
December 31, 2023	$	86,489	$	135,756		$	86,707	$	37,231	$	346,183

Goodwill in the Biopharmaceutical Development division related to the Belyntic acquisition and goodwill in the Sterilization and Disinfection Control division related to the GKE acquisition are expected to be tax deductible. 

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Note 7 - Indebtedness

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

Note 7. Indebtedness

Credit Facility

On October 5, 2023, we amended the terms of our four-year senior credit facility (the “Credit Facility”) to increase the maximum principal amount available to us from $75,000 to $125,000. As of  December 31, 2023, the Credit Facility includes 1) a revolving credit facility in an amended aggregate principal amount of up to $125,000, 2) a swingline loan in an aggregate principal amount not exceeding $5,000, and 3) letters of credit in an aggregate stated amount not exceeding $2,500. The Credit Facility also provides for an incremental term loan or an increase in revolving commitments in an aggregate principal amount of at a minimum $25,000 and at a maximum $75,000, subject to the satisfaction of certain conditions and lender considerations. The Credit Facility matures in March 2025.

The financial covenants in the Credit Facility include a maximum leverage ratio of 4.5 to 1.0 for the period ended December 31, 2023, except that we  may have a leverage ratio of 5.75 to 1.0 for a period of four consecutive quarters following a permitted acquisition, including the permitted GKE acquisition consummated during the three months ended December 31, 2023. The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to 1.0. Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes, engage in certain transactions with affiliates, or conduct asset sales. As of  December 31, 2023, we were in compliance with all covenants.

Amounts borrowed under the Credit Facility bear interest at either a base rate or a SOFR rate plus an applicable spread. The interest rate on borrowings under our line of credit as of December 31, 2023 was 7.2%. We are obligated to pay quarterly unused commitment fees of between 0.15% and 0.35% of the Credit Facility’s aggregate principal amount, based on our leverage ratio. 

During the three months ended December 31, 2023, we borrowed a total of $71,000 under the facility to fund the majority of the acquisition of GKE. See Note 2. "Significant Transactions" for further information. We paid $9,000 against the Credit Facility during our third fiscal quarter, and as of December 31, 2023, $62,000 remained outstanding. We paid an additional $4,000 on the outstanding balance in January 2024. 

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. 

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 and nine months ended December 31, 2023. As of December 31, 2023, the Notes were classified as a long-term liability on our Condensed Consolidated Balance Sheets. The if-converted value of the Notes did not exceed the principal balance as of  December 31, 2023.

The net carrying amount of the Notes was as follows:

	December 31, 2023			March 31, 2023
Principal outstanding	$	172,500		$	172,500
Unamortized debt issuance costs		(1,535	)		(2,228	)
Net carrying value	$	170,965		$	170,272

We recognized interest expense on the Notes as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Coupon interest expense at 1.375%	$	593	$	593	$	1,779	$	1,779
Amortization of debt issuance costs		231		227		692		679
Total interest and amortization of debt issuance costs	$	824	$	820	$	2,471	$	2,458

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

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Note 8 - Stockholders' Equity

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 8. Stockholders' Equity

Stock-Based Compensation

During the nine months ended December 31, 2023, we issued stock options, 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.

Expense recognized related to stock-based compensation is as follows: 

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Stock-based compensation expense	$	2,993	$	2,056	$	9,144	$	9,859
Amount of income tax expense (benefit) recognized in earnings		210		226		727		(1,855	)
Stock-based compensation expense, net of tax	$	3,203	$	2,282	$	9,871	$	8,004

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 Income. 

The following is a summary of stock option award activity for the nine months ended December 31, 2023:

	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, 2023		163		$	200.62		3.3	$	1,643
Awards granted		53			131.67
Awards forfeited or expired		(17	)		208.03
Awards exercised		(2	)		132.40
Outstanding as of December 31, 2023		197		$	182.12		3.5	$	-

The stock options granted during the nine months ended December 31, 2023 vest in equal installments on the first, second, and third anniversary of the grant date.

The following is a summary of RSU and PSU award activity for the nine months ended December 31, 2023:

	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, 2023(1)		57		$	209.27		44	$	286.02
Awards granted(1)		54			134.03		32		132.29
Awards forfeited		(5	)		171.83		-		-
Awards distributed		(27	)		212.36		-		-
Outstanding as of December 31, 2023(1)		79		$	158.94		76	$	223.07

⁽¹⁾ Balances for PSUs 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 the RSUs granted to employees during the nine months ended December 31, 2023 vest in equal installments on the first, second, and third anniversary of the grant date. RSUs granted to certain executives during the nine months ended  December 31, 2023 vest in equal installments on September 1, 2024, June 21, 2025 and June 21, 2026. RSUs granted to non-employee directors during the nine months ended December 31, 2023 vest one year from the grant date. We 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 nine months ended December 31, 2023, the Compensation Committee of the Board of Directors created a plan to award 32 PSUs at target with a grant date fair value of $132.29 that are subject to service, performance, and market conditions to eligible employees. The service period is from June 21, 2023 through June 21, 2026. The company performance conditions will be measured for the period from April 1, 2023 through  March 31, 2024. The quantity of shares that will be earned based upon company 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 for performance. In addition, the number of PSUs earned based on company performance will be adjusted up or down by a maximum of 20% pursuant to a market-based measure of performance comparing Mesa’s share price to a peer group over the period from April 1, 2023 until March 31, 2026. 

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Note 9 - Net Earnings Per Share

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 9. Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share (“diluted EPS”) is computed similarly to basic earnings per share, except that it includes the potential dilution that could occur if dilutive securities were exercised. 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.

Shares underlying the Notes were excluded from the diluted EPS calculation for the three and nine months ended December 31, 2023 and December 31, 2022 as the impact of the assumed conversion of the Notes calculated under the if-converted method was antidilutive. 

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Net income available for shareholders	$	2,116	$	451	$	337	$	319
Weighted average outstanding shares of common stock		5,393		5,339		5,384		5,312
Dilutive effect of stock options		-		17		1		28
Dilutive effect of RSUs		3		4		9		14
Fully diluted shares		5,396		5,360		5,394		5,354
Basic earnings per share	$	0.39	$	0.08	$	0.06	$	0.06
Diluted earnings per share	$	0.39	$	0.08	$	0.06	$	0.06

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Assumed conversion of the Notes		608		608		608		608
Stock awards that were anti-dilutive		277		176		223		159
Stock awards subject to performance and market conditions		57		49		46		51
Total stock awards excluded from diluted EPS		942		833		877		818

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Note 10 - Income Taxes

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 10. Income Taxes

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.

Our effective income tax rate was (8.7)% and 207.5% for the three and nine months ended December 31, 2023, respectively, compared to 76.5% and 384.8% for the three and nine months ended December 31, 2022, respectively. The effective tax rate for the three and nine months ended December 31, 2023 differed from the statutory federal rate of 21% primarily due to the share-based payment awards for employees and the effect of income generated in foreign jurisdictions. The change in our effective tax rate for the three and nine months ended December 31, 2023 compared to the prior periods is primarily due to lower windfall benefits on stock option exercises.

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Note 11 - Commitments and Contingencies

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 11. Commitments and Contingencies

We review the adequacy of our legal reserves on a quarterly basis and establish reserves for loss contingencies that are both probable and reasonably estimable. As of December 31, 2023, there were no material legal reserves recorded on the accompanying unaudited Condensed Consolidated Balance Sheets.

As part of the Belyntic acquisition, we have agreed to pay $1,500 to the sellers if contractually specified patents are issued. During the three months ending December 31, 2023, a subset of the patents was issued by the European Patent Office and we remitted $188 to the Belyntic sellers. An additional subset of the patents was issued in January 2024, for which we will pay the Belyntic sellers an additional $563 during the fourth quarter of fiscal year 2024. We believe it is probable the remaining patents will be issued and we will pay the sellers in full within the next 12 months. 

As part of the GKE acquisition consummated during the three months ended December 31, 2023, we have agreed to pay the GKE sellers approximately $9,500 of the acquisition price approximately 18 months following the acquisition date, pending adjustments for potential indemnification losses that may arise. The liability is recorded as in Other long-term liabilities in our Condensed Consolidated Balance Sheets as of December 31, 2023. 

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Note 12 - Segment Information

9 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 12. Segment Information

The following tables set forth our segment information:

	Three Months Ended December 31,					Nine Months Ended December 31,
	2023			2022		2023			2022
Revenues:
Sterilization and Disinfection Control	$	19,338		$	16,283	$	52,345		$	48,021
Clinical Genomics		12,546			15,585		41,464			48,525
Biopharmaceutical Development		9,430			11,646		28,526			34,757
Calibration Solutions		12,159			10,773		34,948			32,186
Total revenues (a)	$	53,473		$	54,287	$	157,283		$	163,489
Gross profit:
Sterilization and Disinfection Control	$	13,951		$	11,614	$	38,018		$	34,581
Clinical Genomics		6,449			8,045		20,904			26,535
Biopharmaceutical Development		5,841			7,359		17,783			21,993
Calibration Solutions		7,212			5,740		20,050			17,411
Reportable segment gross profit		33,453			32,758		96,755			100,520
Corporate and Other (b)		(51	)		7		(61	)		(28	)
Gross profit	$	33,402		$	32,765	$	96,694		$	100,492
Reconciling Items:
Operating expense		33,469			29,363		97,485			97,689
Operating (loss) income		(67	)		3,402		(791	)		2,803
Nonoperating (income) expense, net		(2,013	)		1,486		(475	)		2,915
Earnings (loss) before income taxes	$	1,946		$	1,916	$	(316	)	$	(112	)

^(a) Intersegment revenues are not significant and are eliminated to arrive at consolidated totals.

^(b) 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 any other segment asset information.

	December 31,		March 31,
	2023		2023
Sterilization and Disinfection Control	$	7,593	$	3,492
Clinical Genomics		11,529		13,985
Biopharmaceutical Development		8,183		8,384
Calibration Solutions		8,668		8,781
Total inventories	$	35,973	$	34,642

Inventories from GKE total $4,077 as of December 31, 2023, net of $412 fair value amortization step-up recorded during the three months ended December 31, 2023. GKE inventories are included in our Sterilization and Disinfection Control division. 

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Insider Trading Arrangements

9 Months Ended

Dec. 31, 2023

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 modified an existing trading arrangement on November 11, 2023. The trading arrangement is effective through April 2, 2024. The trading arrangement contemplates that Mr. Owens may exercise 5,000 non-qualified stock options and sell the resulting 5,000 shares of Mesa Labs' common stock, subject to certain conditions. 

Rule 10b5-1 Arrangement Adopted [Flag]

true

Non-Rule 10b5-1 Arrangement Adopted [Flag]

false

Rule 10b5-1 Arrangement Terminated [Flag]

true

Non-Rule 10b5-1 Arrangement Terminated [Flag]

false

Trading Arrangement, Securities Aggregate Available Amount

5,000

Trading Arrangement, Individual Title

Chief Executive Officer

Trading Arrangement, Individual Name

Gary Owens

Trading Arrangement Adoption Date

November 11, 2023

Trading Arrangement Termination Date

April 2, 2024

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Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2023

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 multinational 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 December 31, 2023, 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 and disinfection processes in the pharmaceutical, healthcare, medical device, and dental industries. The division also provides testing and laboratory services, mainly to the dental industry. 

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

● Biopharmaceutical Development - 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. 

● Calibration Solutions - 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.

Unallocated corporate expenses are reported within Corporate and Other.

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, 2023.

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.

Reclassification, Comparability Adjustment [Policy Text Block]

Prior Period Reclassifications

Certain prior year amounts presented have been reclassified to conform with current presentation. The reclassifications have not resulted in any changes to consolidated or segment amounts reported in the Consolidated Financial Statements for any periods presented in this Form 10-Q.

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 pressure, 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 periods 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 guidance is effective for public business entities for fiscal years beginning after December 31, 2023 (our fiscal year 2025), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our 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 financial statements.

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.

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Note 2 - Significant Transactions (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	Life (in years)		Amount
Cash and cash equivalents			$	4,192
Accounts receivable (a)				2,252
Inventories (b)				3,823
Other current assets				188
Total current assets				10,455
Property, plant and equipment (c)				2,772
Other noncurrent assets				3,030
Intangible assets:
Goodwill (d)				54,470
Customer relationships (e)		7		26,876
Intellectual property (e)		7		3,524
Tradenames (e)		10		6,049
Non-compete agreements (e)		3		743
Total assets acquired			$	107,919
Accounts payable				11
Other current liabilities				2,491
Deferred tax liabilities				9,763
Other long-term liabilities				2,673
Total liabilities assumed				14,938
Total purchase price, net of cash acquired and subject to adjustments for working capital			$	88,789

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Note 3 - Revenue (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended December 31, 2023
	Sterilization and Disinfection Control (1)		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	16,832	$	9,758	$	4,080	$	539	$	31,209
Hardware and Software		180		1,639		2,672		8,254		12,745
Services		2,326		1,149		2,678		3,366		9,519
Total Revenues	$	19,338	$	12,546	$	9,430	$	12,159	$	53,473

	Three Months Ended December 31, 2022
	Sterilization and Disinfection Control		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	14,307	$	10,885	$	3,584	$	553	$	29,329
Hardware and Software		95		3,371		5,844		7,023		16,333
Services		1,881		1,329		2,218		3,197		8,625
Total Revenues	$	16,283	$	15,585	$	11,646	$	10,773	$	54,287

	Nine Months Ended December 31, 2023
	Sterilization and Disinfection Control (1)		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	45,288	$	28,490	$	12,753	$	1,834	$	88,365
Hardware and Software		381		9,540		7,838		22,216		39,975
Services		6,676		3,434		7,935		10,898		28,943
Total Revenues	$	52,345	$	41,464	$	28,526	$	34,948	$	157,283

	Nine Months Ended December 31, 2022
	Sterilization and Disinfection Control		Clinical Genomics		Biopharmaceutical Development		Calibration Solutions		Total
Consumables	$	41,239	$	34,815	$	11,248	$	2,272	$	89,574
Hardware and Software		619		9,349		16,656		18,696		45,320
Services		6,163		4,361		6,853		11,218		28,595
Total Revenues	$	48,021	$	48,525	$	34,757	$	32,186	$	163,489

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
United States	$	25,595	$	28,645	$	79,205	$	88,756
China		4,942		7,482		18,584		18,659
Other		22,936		18,160		59,494		56,074
Total revenues	$	53,473	$	54,287	$	157,283	$	163,489

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

Contract liabilities as of March 31, 2023	$	16,098
Prior year liabilities recognized in revenues during the nine months ended December 31, 2023		(6,858	)
Contract liabilities added during the nine months ended December 31, 2023, net of revenues recognized		5,478
Contract liabilities balance as of December 31, 2023	$	14,718

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Note 4 - Fair Value Measurements (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

	December 31, 2023				March 31, 2023
	Carrying Value		Fair Value (Level 2)		Carrying Value		Fair Value (Level 2)
Notes	$	170,965	$	158,916	$	170,272	$	161,072

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Note 5 - Supplemental Balance Sheets Information (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	December 31, 2023		March 31, 2023
Raw materials	$	19,169	$	20,064
Work in process		1,155		617
Finished goods		15,649		13,961
Total inventories	$	35,973	$	34,642

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]

	December 31, 2023		March 31, 2023
Prepaid expenses	$	3,271	$	2,498
Deposits		2,143		1,376
Prepaid income taxes		8,176		953
Other current assets		4,545		4,045
Total prepaid expenses and other	$	18,135	$	8,872

Schedule of Employee Related Liabilities [Table Text Block]

	December 31, 2023		March 31, 2023
Bonus payable	$	3,757	$	4,461
Wages and paid-time-off payable		3,150		2,329
Payroll related taxes		1,998		1,982
Other benefits payable		475		661
Total accrued payroll and benefits	$	9,380	$	9,433

Schedule of Accrued Liabilities [Table Text Block]

	December 31, 2023		March 31, 2023
Accrued business taxes	$	6,744	$	5,941
Current operating lease liabilities		3,135		2,868
Income taxes payable		1,809		992
Other		4,204		2,297
Total other accrued expenses	$	15,892	$	12,098

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Note 6 - Goodwill and Intangible Assets, Net (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	December 31, 2023							March 31, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	265,408	$	(102,518	)	$	162,890	$	238,247	$	(86,058	)	$	152,189
Intellectual property		71,169		(25,416	)		45,753		65,950		(19,550	)		46,400
Other intangibles		31,867		(7,736	)		24,131		24,793		(6,567	)		18,226
Total	$	368,444	$	(135,670	)	$	232,774	$	328,990	$	(112,175	)	$	216,815

Finite-Lived Intangible Assets Amortization Expense [Table Text Block]

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Amortization in cost of revenues	$	1,883	$	1,695	$	5,367	$	5,094
Amortization in general and administrative		6,092		5,452		17,013		16,479
Total	$	7,975	$	7,147	$	22,380	$	21,573

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Remainder of 2024	$	8,389
2025		32,663
2026		31,857
2027		31,200
2028		30,587

Schedule of Goodwill [Table Text Block]

	Sterilization and Disinfection Control		Clinical Genomics			Biopharmaceutical Development		Calibration Solutions		Total
March 31, 2023	$	29,559	$	135,811		$	83,857	$	37,217		286,444
Effect of foreign currency translation		2,460		(55	)		2,009		14		4,428
Goodwill related to GKE acquisition		54,470		-			-		-		54,470
Measurement period adjustment, Belyntic Acquisition		-		-			841		-		841
December 31, 2023	$	86,489	$	135,756		$	86,707	$	37,231	$	346,183

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Note 7 - Indebtedness (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Convertible Debt [Table Text Block]

	December 31, 2023			March 31, 2023
Principal outstanding	$	172,500		$	172,500
Unamortized debt issuance costs		(1,535	)		(2,228	)
Net carrying value	$	170,965		$	170,272

Interest Expense on Convertible Debt [Table Text Block]

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Coupon interest expense at 1.375%	$	593	$	593	$	1,779	$	1,779
Amortization of debt issuance costs		231		227		692		679
Total interest and amortization of debt issuance costs	$	824	$	820	$	2,471	$	2,458

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Note 8 - Stockholders' Equity (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Stock-based compensation expense	$	2,993	$	2,056	$	9,144	$	9,859
Amount of income tax expense (benefit) recognized in earnings		210		226		727		(1,855	)
Stock-based compensation expense, net of tax	$	3,203	$	2,282	$	9,871	$	8,004

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, 2023		163		$	200.62		3.3	$	1,643
Awards granted		53			131.67
Awards forfeited or expired		(17	)		208.03
Awards exercised		(2	)		132.40
Outstanding as of December 31, 2023		197		$	182.12		3.5	$	-

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, 2023(1)		57		$	209.27		44	$	286.02
Awards granted(1)		54			134.03		32		132.29
Awards forfeited		(5	)		171.83		-		-
Awards distributed		(27	)		212.36		-		-
Outstanding as of December 31, 2023(1)		79		$	158.94		76	$	223.07

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Note 9 - Net Earnings Per Share (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Net income available for shareholders	$	2,116	$	451	$	337	$	319
Weighted average outstanding shares of common stock		5,393		5,339		5,384		5,312
Dilutive effect of stock options		-		17		1		28
Dilutive effect of RSUs		3		4		9		14
Fully diluted shares		5,396		5,360		5,394		5,354
Basic earnings per share	$	0.39	$	0.08	$	0.06	$	0.06
Diluted earnings per share	$	0.39	$	0.08	$	0.06	$	0.06

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Assumed conversion of the Notes		608		608		608		608
Stock awards that were anti-dilutive		277		176		223		159
Stock awards subject to performance and market conditions		57		49		46		51
Total stock awards excluded from diluted EPS		942		833		877		818

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Note 12 - Segment Information (Tables)

9 Months Ended

Dec. 31, 2023

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended December 31,					Nine Months Ended December 31,
	2023			2022		2023			2022
Revenues:
Sterilization and Disinfection Control	$	19,338		$	16,283	$	52,345		$	48,021
Clinical Genomics		12,546			15,585		41,464			48,525
Biopharmaceutical Development		9,430			11,646		28,526			34,757
Calibration Solutions		12,159			10,773		34,948			32,186
Total revenues (a)	$	53,473		$	54,287	$	157,283		$	163,489
Gross profit:
Sterilization and Disinfection Control	$	13,951		$	11,614	$	38,018		$	34,581
Clinical Genomics		6,449			8,045		20,904			26,535
Biopharmaceutical Development		5,841			7,359		17,783			21,993
Calibration Solutions		7,212			5,740		20,050			17,411
Reportable segment gross profit		33,453			32,758		96,755			100,520
Corporate and Other (b)		(51	)		7		(61	)		(28	)
Gross profit	$	33,402		$	32,765	$	96,694		$	100,492
Reconciling Items:
Operating expense		33,469			29,363		97,485			97,689
Operating (loss) income		(67	)		3,402		(791	)		2,803
Nonoperating (income) expense, net		(2,013	)		1,486		(475	)		2,915
Earnings (loss) before income taxes	$	1,946		$	1,916	$	(316	)	$	(112	)

Schedule of Segment Reporting Information, by Inventory Segment [Table Text Block]

	December 31,		March 31,
	2023		2023
Sterilization and Disinfection Control	$	7,593	$	3,492
Clinical Genomics		11,529		13,985
Biopharmaceutical Development		8,183		8,384
Calibration Solutions		8,668		8,781
Total inventories	$	35,973	$	34,642

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Note 2 - Significant Transactions (Details Textual) - USD ($) $ in Thousands			3 Months Ended	9 Months Ended
	Oct. 16, 2023	Nov. 17, 2022	Dec. 31, 2023	Dec. 31, 2023
GKE Acquisition [Member]
Payments to Acquire Businesses, Gross	$ 88,789
Business Combination, Consideration Transferred, Working Capital Adjustment	1,000
Business Combination, Consideration Transferred, Liabilities Incurred	9,500		$ 9,500
Proceeds from Lines of Credit	$ 71,000
Business Combination, Acquisition Related Costs			770	$ 1,275
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual			$ 3,837
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual				$ 565
GKE Acquisition [Member] | GKE GmbH and SAL GmbH [Member]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
GKE Acquisition [Member] | Beijing GKE Science & Technology Co. Ltd. [Member]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Belyntic Acquisition [Member]
Payments to Acquire Businesses, Gross		$ 4,950
Business Combination, Consideration Transferred, Total		6,450
Business Combination, Contingent Consideration, Liability		$ 1,500

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Note 2 - Significant Transactions - Allocation of Preliminary Price (Details) - USD ($) $ in Thousands				9 Months Ended
		Oct. 16, 2023		Dec. 31, 2023	Dec. 31, 2022	Mar. 31, 2023
Goodwill (d)				$ 346,183		$ 286,444
Total purchase price, net of cash acquired and subject to adjustments for working capital				79,700	$ 4,950
GKE Acquisition [Member]
Cash and cash equivalents		$ 4,192
Accounts receivable (a)		2,252
Inventories (b)		3,823	[1]	$ 4,077
Other current assets		188
Total current assets		10,455
Property, plant and equipment (c)	[2]	2,772
Other noncurrent assets		3,030
Goodwill (d)		54,470
Total assets acquired		107,919
Accounts payable		11
Other current liabilities		2,491
Deferred tax liabilities		9,763
Other long-term liabilities		2,673
Total liabilities assumed		14,938
Total purchase price, net of cash acquired and subject to adjustments for working capital		$ 88,789
GKE Acquisition [Member] | Customer Relationships [Member]
Intangible assets, life (Year)		7 years
Intangible assets		$ 26,876
Intangible assets. life (Year)		7 years
GKE Acquisition [Member] | Intellectual Property [Member]
Intangible assets, life (Year)		7 years
Intangible assets		$ 3,524
Intangible assets. life (Year)		7 years
GKE Acquisition [Member] | Trade Names [Member]
Intangible assets, life (Year)		10 years
Intangible assets		$ 6,049
Intangible assets. life (Year)		10 years
GKE Acquisition [Member] | Noncompete Agreements [Member]
Intangible assets, life (Year)	[3]	3 years
Intangible assets	[3]	$ 743
Intangible assets. life (Year)	[3]	3 years

[1] Includes $1,507 of preliminary inventory step up, which we expect to amortize within approximately three fiscal quarters from the acquisition date. During the period from October 16, 2023 to December 31, 2023, $412 of inventory step up amortization was recorded to cost of revenues. Preliminary accounting for the fair value step up of GKE China's inventory is incomplete due to the recent closing date.

[2] Includes $1,727 of preliminary property, plant and equipment step up, which will be amortized based on the underlying assets' expected lives. During the period from October 16, 2023 to December 31, 2023, $83 of depreciation expense was recorded related to the property, plant and equipment fair value step up.

[3] Acquired amortizable intangible assets are currently expected to be amortized on a straight line basis over a weighted average period of 7.4 years. The identified intangible assets will be amortized on a straight line basis over their useful lives, which approximates the pattern that the assets' economic benefits are expected to be consumed. Amortization expense for customer relationships, tradenames, and noncompete agreements will be expensed to general and administrative expense, and amortization expense for intellectual property will be expensed to cost of revenues. During the period from October 16, 2023 to December 31, 2023, $838 of amortization expense was recorded to general and administrative costs and $122 of amortization expense was recorded to cost of revenues in the Sterilization Disinfection Control division.

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Note 3 - Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Dec. 31, 2023		Dec. 31, 2022	Dec. 31, 2023		Dec. 31, 2022
Revenues		$ 53,473		$ 54,287	$ 157,283		$ 163,489
Consumables [Member] | Transferred at Point in Time [Member]
Revenues		31,209		29,329	88,365		89,574
Hardware and Software [Member] | Transferred at Point in Time [Member]
Revenues		12,745		16,333	39,975		45,320
Service [Member] | Transferred at Point in Time [Member]
Revenues		9,519		8,625	28,943		28,595
Operating Segments [Member] | Sterilization and Disinfection Control [Member]
Revenues	[1]	19,338	[2]	16,283	52,345	[2]	48,021
Operating Segments [Member] | Clinical Genomics [Member]
Revenues	[1]	12,546		15,585	41,464		48,525
Operating Segments [Member] | Biopharmaceutical Development [Member]
Revenues	[1]	9,430		11,646	28,526		34,757
Operating Segments [Member] | Calibration Solutions [Member]
Revenues	[1]	12,159		10,773	34,948		32,186
Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member]
Revenues		16,832	[2]	14,307	45,288	[2]	41,239
Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member]
Revenues		9,758		10,885	28,490		34,815
Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member]
Revenues		4,080		3,584	12,753		11,248
Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member]
Revenues		539		553	1,834		2,272
Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member]
Revenues		180	[2]	95	381	[2]	619
Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member]
Revenues		1,639		3,371	9,540		9,349
Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member]
Revenues		2,672		5,844	7,838		16,656
Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member]
Revenues		8,254		7,023	22,216		18,696
Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member]
Revenues		2,326	[2]	1,881	6,676	[2]	6,163
Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member]
Revenues		1,149		1,329	3,434		4,361
Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member]
Revenues		2,678		2,218	7,935		6,853
Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member]
Revenues		$ 3,366		$ 3,197	$ 10,898		$ 11,218

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

[2] Revenues from GKE GmbH and SAL GmbH are included in the Sterilization and Disinfection Control division beginning upon acquisition on October 16, 2023.

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Note 3 - Revenue - Revenues From External Customers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Revenues	$ 53,473	$ 54,287	$ 157,283	$ 163,489
UNITED STATES
Revenues	25,595	28,645	79,205	88,756
CHINA
Revenues	4,942	7,482	18,584	18,659
Other [Member]
Revenues	$ 22,936	$ 18,160	$ 59,494	$ 56,074

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Note 3 - Revenue - Contract Liabilities (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2023 USD ($)
Contract liabilities, balance	$ 16,098
Prior year liabilities recognized in revenues during the nine months ended December 31, 2023	(6,858)
Contract liabilities added during the nine months ended December 31, 2023, net of revenues recognized	5,478
Contract liabilities, balance	$ 14,718

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Note 4 - Fair Value Measurements (Details Textual) $ in Thousands	9 Months Ended
	Dec. 31, 2023 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Nov. 17, 2022 USD ($)	Aug. 12, 2019
Belyntic Acquisition [Member] | Other Long-term Liabilities [Member]
Business Combination, Contingent Consideration, Liability, Noncurrent	$ 1,067		$ 1,500	$ 1,500
Senior Notes [Member] | The Notes [Member]
Long-term Debt, Gross	$ 172,500	$ 172,500
Debt Instrument, Interest Rate, Stated Percentage	1.375%				1.375%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Number of Major Customers	0

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Note 4 - Fair Value Measurements - Fair Value and Carrying Value of the Notes (Details) - Senior Notes [Member] - USD ($) $ in Thousands	Dec. 30, 2023	Mar. 31, 2023
Reported Value Measurement [Member]
Notes	$ 170,965	$ 170,272
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Notes	$ 158,916	$ 161,072

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Note 5 - Supplemental Balance Sheets Information - Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Raw materials	$ 19,169	$ 20,064
Work in process	1,155	617
Finished goods	15,649	13,961
Total inventories	$ 35,973	$ 34,642

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Note 5 - Supplemental Balance Sheets Information - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Prepaid expenses	$ 3,271	$ 2,498
Deposits	2,143	1,376
Prepaid income taxes	8,176	953
Other current assets	4,545	4,045
Total prepaid expenses and other	$ 18,135	$ 8,872

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Note 5 - Supplemental Balance Sheets Information - Accrued Payroll and Benefits (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Bonus payable	$ 3,757	$ 4,461
Wages and paid-time-off payable	3,150	2,329
Payroll related taxes	1,998	1,982
Other benefits payable	475	661
Total accrued payroll and benefits	$ 9,380	$ 9,433

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Note 5 - Supplemental Balance Sheets Information - Other Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Accrued business taxes	$ 6,744	$ 5,941
Current operating lease liabilities	3,135	2,868
Income taxes payable	1,809	992
Other	4,204	2,297
Total other accrued expenses	$ 15,892	$ 12,098

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Note 6 - Goodwill and Intangible Assets, Net - Other Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Gross carrying amount	$ 368,444	$ 328,990
Accumulated amortization	(135,670)	(112,175)
Net carrying amount	232,774	216,815
Customer Relationships [Member]
Gross carrying amount	265,408	238,247
Accumulated amortization	(102,518)	(86,058)
Net carrying amount	162,890	152,189
Intellectual Property [Member]
Gross carrying amount	71,169	65,950
Accumulated amortization	(25,416)	(19,550)
Net carrying amount	45,753	46,400
Other Intangible Assets [Member]
Gross carrying amount	31,867	24,793
Accumulated amortization	(7,736)	(6,567)
Net carrying amount	$ 24,131	$ 18,226

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Note 6 - Goodwill and Intangible Assets, Net - Amortization Expense for Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Amortization of acquisition-related intangibles	$ 7,975	$ 7,147	$ 22,380	$ 21,573
Cost of Sales [Member]
Amortization of acquisition-related intangibles	1,883	1,695	5,367	5,094
General and Administrative Expense [Member]
Amortization of acquisition-related intangibles	$ 6,092	$ 5,452	$ 17,013	$ 16,479

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Note 6 - Goodwill and Intangible Assets, Net - Estimated Amortization Expense (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Remainder of 2024	$ 8,389
2025	32,663
2026	31,857
2027	31,200
2028	$ 30,587

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Note 6 - Goodwill and Intangible Assets, Net - Change in the Carrying Amount of Goodwill (Details) $ in Thousands	9 Months Ended
	Dec. 31, 2023 USD ($)
Goodwill	$ 286,444
Effect of foreign currency translation	4,428
Goodwill related to GKE acquisition	54,470
Measurement period adjustment, Belyntic Acquisition	841
Goodwill	346,183
Sterilization and Disinfection Control [Member] | Operating Segments [Member]
Goodwill	29,559
Effect of foreign currency translation	2,460
Goodwill related to GKE acquisition	54,470
Measurement period adjustment, Belyntic Acquisition	0
Goodwill	86,489
Clinical Genomics [Member] | Operating Segments [Member]
Goodwill	135,811
Effect of foreign currency translation	(55)
Goodwill related to GKE acquisition	0
Measurement period adjustment, Belyntic Acquisition	0
Goodwill	135,756
Biopharmaceutical Development [Member] | Operating Segments [Member]
Goodwill	83,857
Effect of foreign currency translation	2,009
Goodwill related to GKE acquisition	0
Measurement period adjustment, Belyntic Acquisition	841
Goodwill	86,707
Calibration Solutions [Member] | Operating Segments [Member]
Goodwill	37,217
Effect of foreign currency translation	14
Goodwill related to GKE acquisition	0
Measurement period adjustment, Belyntic Acquisition	0
Goodwill	$ 37,231

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Note 7 - Indebtedness (Details Textual) $ / shares in Units, $ in Thousands			1 Months Ended	3 Months Ended
	Mar. 05, 2021 USD ($)	Aug. 12, 2019 USD ($) $ / shares	Jan. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)	Oct. 05, 2023 USD ($)	Mar. 31, 2023 USD ($)
Long-Term Line of Credit				$ 62,000	$ 62,000		$ 13,000
Senior Secured Credit Agreement [Member]
Debt Instrument, Covenant, Maximum Total Leverage Ratio for the Fifth, Sixth, Seventh, and Eighth Testing Dates	4.5
Debt Instrument, Covenant, Maximum Conditional Total Leverage Ratio Following an Acquisition	5.75
Debt Instrument, Interest Rate, Effective Percentage				7.20%	7.20%
Proceeds from Lines of Credit					$ 71,000
Repayments of Lines of Credit				$ 9,000
Long-Term Line of Credit				$ 62,000	$ 62,000
Senior Secured Credit Agreement [Member] | Subsequent Event [Member]
Repayments of Lines of Credit			$ 4,000
Senior Secured Credit Agreement [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 125,000
Senior Secured Credit Agreement [Member] | Maximum [Member]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.35%
Senior Secured Credit Agreement [Member] | Maximum [Member] | Swingline Loan [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 5,000
Senior Secured Credit Agreement [Member] | Maximum [Member] | Letter of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity	2,500
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]
Fixed Charge Coverage Ratio	1.25
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.15%
Senior Secured Credit Agreement [Member] | Minimum [Member] | The Credit Facility Term Loan [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 25,000
The Notes [Member] | Senior Notes [Member]
Debt Instrument, Interest Rate, Effective Percentage				1.90%	1.90%
Debt Instrument, Face Amount		$ 172,500
Proceeds from Convertible Debt		$ 167,056
Debt Instrument, Interest Rate, Stated Percentage		1.375%		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

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Note 7 - Indebtedness - Carrying Amount of the Notes (Details) - The Notes [Member] - Senior Notes [Member] - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Principal outstanding	$ 172,500	$ 172,500
Unamortized debt issuance costs	(1,535)	(2,228)
Net carrying value	$ 170,965	$ 170,272

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Note 7 - Indebtedness - Interest Expense on the Notes (Details) - The Notes [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Coupon interest expense at 1.375%	$ 593	$ 593	$ 1,779	$ 1,779
Amortization of debt issuance costs	231	227	692	679
Total interest and amortization of debt issuance costs	$ 824	$ 820	$ 2,471	$ 2,458

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Note 8 - Stockholders' Equity (Details Textual) - The FY24 PSUs [Member] - Eligible Employees [Member] shares in Thousands	9 Months Ended
	Dec. 31, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares) | shares	32
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 132.29
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Earned, Maximum Adjustment Percentage	20.00%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award Number of Shares Issued Upon Vesting, Percentage	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award Number of Shares Issued Upon Vesting, Percentage	200.00%

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Note 8 - Stockholders' Equity - Allocation of Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Stock-based compensation expense	$ 2,993	$ 2,056	$ 9,144	$ 9,859
Amount of income tax expense (benefit) recognized in earnings	210	226	727	(1,855)
Stock-based compensation expense, net of tax	$ 3,203	$ 2,282	$ 9,871	$ 8,004

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Note 8 - Stockholders' Equity - Stock Option and Non-vested Stock Award Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended	12 Months Ended
	Dec. 31, 2023 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) $ / shares shares
Options outstanding (in shares) | shares	163
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 200.62
Outstanding, Weighted- Average Remaining Contractual Life (Year)	3 years 6 months	3 years 3 months 18 days
Outstanding, Aggregate Intrinsic Value | $	$ 0	$ 1,643
Options granted (in shares) | shares	53
Awards granted, weighted average exercise price (in dollars per share) | $ / shares	$ 131.67
Options forfeited or expired (in shares) | shares	(17)
Awards forfeited or expired, weighted average exercise price (in dollars per share) | $ / shares	$ 208.03
Awards exercised (in shares) | shares	(2)
Awards exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 132.4
Options outstanding (in shares) | shares	197	163
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 182.12	$ 200.62

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Note 8 - Stockholders' Equity - Restricted Stock Unit Activity (Details)	9 Months Ended
	Dec. 31, 2023 $ / shares shares
Restricted Stock Units (RSUs) [Member]
Outstanding as of March 31, 2023(1) (in shares) | shares	57	[1]
Outstanding as of March 31, 2023(1) (in dollars per share) | $ / shares	$ 209.27	[1]
Awards granted(1) (in shares) | shares	54	[1]
Awards granted(1) (in dollars per share) | $ / shares	$ 134.03	[1]
Awards forfeited (in shares) | shares	(5)
Awards forfeited (in dollars per share) | $ / shares	$ 171.83
Awards distributed (in shares) | shares	(27)
Awards distributed, weighted average grant date fair value per share (in dollars per share) | $ / shares	$ 212.36
Outstanding as of December 31, 2023(1) (in shares) | shares	79	[1],[2]
Outstanding as of December 31, 2023(1) (in dollars per share) | $ / shares	$ 158.94	[1]
Performance Stock Units [Member]
Outstanding as of March 31, 2023(1) (in shares) | shares	44	[1]
Outstanding as of March 31, 2023(1) (in dollars per share) | $ / shares	$ 286.02	[1]
Awards granted(1) (in shares) | shares	32	[1]
Awards granted(1) (in dollars per share) | $ / shares	$ 132.29	[1]
Awards forfeited (in shares) | shares	0
Awards forfeited (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
Outstanding as of December 31, 2023(1) (in shares) | shares	76	[1],[2]
Outstanding as of December 31, 2023(1) (in dollars per share) | $ / shares	$ 223.07	[1]

[1] Balances for PSUs are reflected at target.

[2] During the nine months ended December 31, 2022, the fiscal year 2020 PSUs vested and were distributed at 126% of target, based on actual performance results and completion of service conditions.

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Note 9 - Net Earnings Per Share - Computation of Net Income Per Share, Basic & Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Net income	$ 2,116	$ 451	$ 337	$ 319
Weighted average outstanding shares of common stock (in shares)	5,393	5,339	5,384	5,312
Fully diluted shares (in shares)	5,396	5,360	5,394	5,354
Basic earnings per share (in dollars per share)	$ 0.39	$ 0.08	$ 0.06	$ 0.06
Diluted earnings per share (in dollars per share)	$ 0.39	$ 0.08	$ 0.06	$ 0.06
Share-Based Payment Arrangement, Option [Member]
Dilutive effect of shares (in shares)	0	17	1	28
Restricted Stock Units (RSUs) [Member]
Dilutive effect of shares (in shares)	3	4	9	14

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Note 9 - Net Earnings Per Share - Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Total stock awards excluded from diluted EPS (in shares)	942	833	877	818
Assumed Conversion of Convertible Debt [Member]
Total stock awards excluded from diluted EPS (in shares)	608	608	608	608
Stock Awards that were Antidilutive [Member]
Total stock awards excluded from diluted EPS (in shares)	277	176	223	159
Stock Awards Subject to Performance Conditions [Member]
Total stock awards excluded from diluted EPS (in shares)	57	49	46	51

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Note 10 - Income Taxes (Details Textual)	3 Months Ended		9 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2023	Dec. 31, 2022
Effective Income Tax Rate Reconciliation, Percent	8.70%	76.50%	207.50%	384.80%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			21.00%

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Note 11 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands		3 Months Ended
	Oct. 16, 2023	Dec. 31, 2023	Jan. 17, 2024	Dec. 31, 2022	Nov. 17, 2022
Belyntic Acquisition [Member]
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability		$ 188
Belyntic Acquisition [Member] | Subsequent Event [Member]
Business Combination, Contingent Consideration, Liability, Current			$ 563
Belyntic Acquisition [Member] | Other Long-term Liabilities [Member]
Business Combination, Contingent Consideration, Liability, Noncurrent		1,067		$ 1,500	$ 1,500
GKE Acquisition [Member]
Business Combination, Consideration Transferred, Liabilities Incurred	$ 9,500	$ 9,500

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Note 12 - Segment Information (Details Textual) - GKE Acquisition [Member] - USD ($) $ in Thousands	Dec. 31, 2023	Oct. 16, 2023	[1]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	$ 4,077	$ 3,823
Business Combination, Fair Value Amortization, Inventory	$ 412

[1] Includes $1,507 of preliminary inventory step up, which we expect to amortize within approximately three fiscal quarters from the acquisition date. During the period from October 16, 2023 to December 31, 2023, $412 of inventory step up amortization was recorded to cost of revenues. Preliminary accounting for the fair value step up of GKE China's inventory is incomplete due to the recent closing date.

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Note 12 - Segment Information - Operating Segment Information (Details) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Dec. 31, 2023		Dec. 31, 2022	Dec. 31, 2023		Dec. 31, 2022
Revenues		$ 53,473		$ 54,287	$ 157,283		$ 163,489
Gross profit (loss)		33,402		32,765	96,694		100,492
Operating expense		33,469		29,363	97,485		97,689
Operating (loss) income		(67)		3,402	(791)		2,803
Nonoperating (income) expense, net		2,013		(1,486)	475		(2,915)
Operating Segments [Member]
Gross profit (loss)		33,453		32,758	96,755		100,520
Operating expense		33,469		29,363	97,485		97,689
Operating (loss) income		(67)		3,402	(791)		2,803
Nonoperating (income) expense, net		(2,013)		1,486	(475)		2,915
Earnings (loss) before income taxes		1,946		1,916	(316)		(112)
Operating Segments [Member] | Sterilization and Disinfection Control [Member]
Revenues	[1]	19,338	[2]	16,283	52,345	[2]	48,021
Gross profit (loss)		13,951		11,614	38,018		34,581
Operating Segments [Member] | Clinical Genomics [Member]
Revenues	[1]	12,546		15,585	41,464		48,525
Gross profit (loss)		6,449		8,045	20,904		26,535
Operating Segments [Member] | Biopharmaceutical Development [Member]
Revenues	[1]	9,430		11,646	28,526		34,757
Gross profit (loss)		5,841		7,359	17,783		21,993
Operating Segments [Member] | Calibration Solutions [Member]
Revenues	[1]	12,159		10,773	34,948		32,186
Gross profit (loss)		7,212		5,740	20,050		17,411
Corporate, Non-Segment [Member]
Revenues	[1],[3]	$ (51)		$ 7	$ (61)		$ (28)

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

[2] Revenues from GKE GmbH and SAL GmbH are included in the Sterilization and Disinfection Control division beginning upon acquisition on October 16, 2023.

[3] Unallocated corporate expenses and other business activities are reported within Corporate and Other.

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Note 12 - Segment Information - Segment Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Mar. 31, 2023
Total inventories	$ 35,973	$ 34,642
Operating Segments [Member] | Sterilization and Disinfection Control [Member]
Total inventories	7,593	3,492
Operating Segments [Member] | Clinical Genomics [Member]
Total inventories	11,529	13,985
Operating Segments [Member] | Biopharmaceutical Development [Member]
Total inventories	8,183	8,384
Operating Segments [Member] | Calibration Solutions [Member]
Total inventories	$ 8,668	$ 8,781