United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
MESA LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
| | | |||
| (State or other jurisdiction of | (I.R.S. Employer | |||
| incorporation or organization) | Identification number) | |||
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| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name on each exchange on which registered |
| The |
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.
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).
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 ☐ | | 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
Indicate the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date:
There were
| 1 | ||
| 1 | ||
| 1 | ||
| 2 | ||
| Condensed Consolidated Statements of Comprehensive Income (Loss) |
3 | |
| 4 | ||
| Condensed Consolidated Statements of Cash Flows | 5 | |
| 6 | ||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 | |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk |
24 | |
| 25 | ||
| 26 | ||
| 26 | ||
| 26 | ||
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
26 | |
| Item 5. Other Information | 26 | |
| 27 | ||
| 28 | ||
| Exhibit 31.1 Certifications Pursuant to Rule 13a-14(a) |
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| Exhibit 31.2 Certifications Pursuant to Rule 13a-14(a) |
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| Exhibit 32.1 Certifications Pursuant to Rule 13a-14(b) and 18 U.S.C Section 1350 |
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| Exhibit 32.2 Certifications Pursuant to Rule 13a-14(b) and 18 U.S.C Section 1350 |
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Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share amounts)
| June 30, | March 31, | |||||||
| 2024 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, less allowance for doubtful accounts of $ and $, respectively | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Noncurrent assets: | ||||||||
| Property, plant and equipment, net of accumulated depreciation of $ and $ respectively | ||||||||
| Deferred tax asset | ||||||||
| Other assets | ||||||||
| Customer relationships, net | ||||||||
| Other intangibles, net | ||||||||
| Goodwill | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued payroll and benefits | ||||||||
| Unearned revenues | ||||||||
| Term loan, current portion | ||||||||
| Other accrued expenses | ||||||||
| Total current liabilities | ||||||||
| Noncurrent liabilities: | ||||||||
| Deferred tax liability | $ | |||||||
| Other noncurrent liabilities | ||||||||
| Revolving line of credit | ||||||||
| Term loan, noncurrent portion, net of discounts and debt issuance costs | ||||||||
| Convertible senior notes, net of debt issuance costs | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, par value; authorized shares; issued and outstanding, and shares, respectively | ||||||||
| (Accumulated deficit) | ( | ) | ( | ) | ||||
| Accumulated other comprehensive (loss) | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to Condensed Consolidated Financial Statements.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expense: | ||||||||
| Selling | ||||||||
| General and administrative | ||||||||
| Research and development | ||||||||
| Total operating expense | ||||||||
| Operating income (loss) | ( | ) | ||||||
| Nonoperating expense: | ||||||||
| Interest expense and amortization of debt issuance costs | ||||||||
| (Gain) on extinguishment of convertible senior notes | ( | ) | ||||||
| Other expense (income), net | ( | ) | ||||||
| Total nonoperating expense, net | ||||||||
| Earnings (loss) before income taxes | ( | ) | ||||||
| Income tax expense (benefit) | ( | ) | ||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Earnings (loss) per share: | ||||||||
| Basic | $ | $ | ( | ) | ||||
| Diluted | $ | $ | ( | ) | ||||
| Weighted-average common shares outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
See accompanying notes to Condensed Consolidated Financial Statements.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
(in thousands)
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustments | ( | ) | ||||||
| Comprehensive income (loss) | $ | $ | ( | ) | ||||
See accompanying notes to Condensed Consolidated Financial Statements.
Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(dollars in thousands, except per share data)
| Common Stock | ||||||||||||||||||||
| Number of Shares | Amount | (Accumulated Deficit) Retained Earnings | AOCI* | Total | ||||||||||||||||
| March 31, 2024 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
| Exercise of stock options and vesting of restricted stock units | - | - | ||||||||||||||||||
| Tax withholding on vesting of restricted stock units | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Dividends paid, $ per share | - | - | ( | ) | - | ( | ) | |||||||||||||
| Stock-based compensation expense | - | - | - | |||||||||||||||||
| Foreign currency translation | - | - | - | |||||||||||||||||
| Net income | - | - | - | |||||||||||||||||
| June 30, 2024 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
| Common Stock | ||||||||||||||||||||
| Number of Shares | Amount | (Accumulated Deficit) Retained Earnings | AOCI* | Total | ||||||||||||||||
| March 31, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Exercise of stock options and vesting of restricted stock units | - | - | ||||||||||||||||||
| Tax withholding on vesting of restricted stock units | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Dividends paid, $ per share | - | - | ( | ) | - | ( | ) | |||||||||||||
| Stock-based compensation expense | - | - | - | |||||||||||||||||
| Foreign currency translation | - | - | - | ( | ) | ( | ) | |||||||||||||
| Net (loss) | - | - | ( | ) | - | ( | ) | |||||||||||||
| June 30, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
*Accumulated Other Comprehensive Income (Loss).
See accompanying notes to Condensed Consolidated Financial Statements.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income to net cash from operating activities: | ||||||||
| Depreciation of property, plant and equipment | ||||||||
| Amortization of acquisition-related intangibles | ||||||||
| Stock-based compensation expense | ||||||||
| Gain on extinguishment of convertible notes | ( | ) | ||||||
| Amortization of step-up in inventory basis | ||||||||
| Other | ||||||||
| Cash from changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ||||||||
| Inventories | ( | ) | ( | ) | ||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued liabilities and taxes payable | ( | ) | ( | ) | ||||
| Unearned revenues | ( | ) | ( | ) | ||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment | ( | ) | ( | ) | ||||
| Net cash (used in) investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from the issuance of debt, net | ||||||||
| Repayment of debt | ( | ) | ( | ) | ||||
| Repurchase of convertible debt | ( | ) | ||||||
| Dividends paid | ( | ) | ( | ) | ||||
| Other financing, net | ( | ) | ( | ) | ||||
| Net cash (used in) financing activities | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
See accompanying notes to Condensed Consolidated Financial Statements.
Notes to Condensed Consolidated Financial Statements
(unaudited)
(dollar and share amounts in thousands, unless otherwise specified)
Note 1. Description of Business and Summary of Significant Accounting Policies
Description of Business
In this quarterly report on Form 10-Q, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries, is collectively referred to as “we,” “us,” “our,” the “Company,” or “Mesa.”
We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe, and Asia Pacific, and by independent distributors in these areas 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 June 30, 2024, we managed our operations in four reportable segments, or divisions:
| ● | Sterilization and Disinfection Control - manufactures and sells biological, chemical and cleaning indicators which are used to assess the effectiveness of sterilization, decontamination, disinfection, and cleaning processes, including steam, hydrogen peroxide, ethylene oxide, radiation, and other processes in the medical device, pharmaceutical, and healthcare industries. The division also provides testing and laboratory services, mainly to the dental and pharmaceutical industries. | |
| ● | Clinical Genomics - develops, manufactures and sells highly sensitive, low-cost, high-throughput genetic analysis tools and related consumables and services that enable clinical research labs and contract research organizations to perform genomic testing for a broad range of research applications in several therapeutic areas, such as screenings for hereditary diseases, pharmacogenetics, oncology related applications, and toxicology research. |
| ● | Biopharmaceutical Development - develops, manufactures, sells and services automated systems for protein analysis (immunoassays) and peptide synthesis solutions. Immunoassays and peptide synthesis solutions accelerate the discovery, development, and manufacture of biotherapeutic therapies, among other applications. |
| ● | Calibration Solutions - develops, manufactures, sells and services quality control products using principles of advanced metrology to enable customers to measure and calibrate critical parameters in applications such as environmental and process monitoring, dialysis, gas flow, air quality and torque testing. |
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. In the opinion of management, such unaudited information includes all adjustments, consisting of normal recurring adjustments necessary for the fair statement of our financial position and results of operations. The results of operations for interim periods are not necessarily indicative of results that may be achieved for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The Condensed Consolidated Financial Statements include the accounts of Mesa and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We made no material changes to the application of our significant accounting policies disclosed in our annual report on Form 10-K. This quarterly report should be read in conjunction with the consolidated financial statements included in our annual report on Form 10-K for the year ended March 31, 2024.
Our fiscal year ends on March 31. References in this Quarterly Report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively.
Risks and Uncertainties
The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods. These estimates represent management's judgment about the outcome of future events. The global business environment continues to be impacted by cost pressures, the overall effects of economic uncertainty on customers' purchasing patterns, high interest rates, and other factors. It is not possible to accurately predict the future impact of such events and circumstances. Actual results could differ from our estimates.
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ASU No. 2023-07 requires all annual disclosures currently required by Topic 280 to be included in interim 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 ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year 2025 for annual periods), and interim periods within fiscal years beginning after December 15, 2024 (our fiscal year 2026 for interim periods) on a retrospective basis. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU No. 2023-09, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for public business entities for fiscal years beginning after December 15, 2024 (our fiscal year 2026), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.
We have reviewed all recently issued accounting pronouncements and have concluded that, other than as described above, they are either not applicable to us or are not expected to have a significant impact on our consolidated financial statements.
Note 2. Significant Transactions
GKE - Fiscal Year 2024 Acquisition
We acquired
GKE develops, manufactures and sells a highly competitive portfolio of chemical sterilization indicators, biologics, and process challenge devices to protect patient safety across global healthcare markets. GKE is included in our Sterilization and Disinfection Control ("SDC") division, and GKE's strengths in chemical indictors are complementary to SDC's strengths in biologic indicators, as chemical and biologic indicators are used in the same sterility validation workflows. Additionally, GKE’s healthcare-focused commercial capabilities in Europe and Asia greatly expand our reach in the healthcare markets in those geographies. We are working to obtain regulatory 510(k) clearance on certain GKE products for sale in the United States, which would further expand organic revenues growth opportunities from the GKE business.
We finalized our purchase price accounting of GKE during fiscal year 2024. Total cash consideration for the GKE acquisition was $
During the three months ended June 30, 2024, GKE's operations contributed $
Note 3. Revenue
We develop, manufacture, market, sell and maintain life sciences tools and quality control instruments and related consumables.
Hardware sales include physical products such as instruments used for molecular and genetic analysis, protein synthesizers, medical meters, wireless sensor systems, data loggers, and process challenge devices. Hardware sales may be offered with accompanying perpetual or annual software licenses, which in some cases are required for the hardware to function.
Consumables are typically used on a one-time basis and require frequent replacement in our customers' operating cycles. Consumables sold by our Clinical Genomics and Biopharmaceutical Development divisions, such as reagents used for molecular and genetic analysis or solutions used for protein synthesis, are critical to the ongoing use of our instruments. Consumables such as biological indicator test strips sold by our Sterilization and Disinfection Control division are used on a standalone basis.
Revenues from hardware and consumables are recognized upon transfer to the customer, typically at the point of shipment.
We also offer maintenance, calibration, and testing service contracts. These contracts result in revenues recognized over time, for example, when we are obligated to perform labor and replace parts on an as-needed basis over a contractually specified period, or at a point in time, upon completion of a specific, discrete service. In many cases, our contracts contain both revenues recognized over time and revenues recognized at a point in time.
We evaluate our revenues internally based on business division and the nature of goods and services provided.
The following tables present disaggregated revenues for the three months ended June 30, 2024 and 2023, respectively:
| Three Months Ended June 30, 2024 | ||||||||||||||||||||
| Sterilization and Disinfection Control (1) | Clinical Genomics | Biopharmaceutical Development | Calibration Solutions | Total | ||||||||||||||||
| Consumables | $ | $ | $ | $ | $ | |||||||||||||||
| Hardware and software | ||||||||||||||||||||
| Services | ||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | |||||||||||||||
| (1) Revenues of $ |
| Three Months Ended June 30, 2023 | ||||||||||||||||||||
| Sterilization and Disinfection Control | Clinical Genomics | Biopharmaceutical Development | Calibration Solutions | Total | ||||||||||||||||
| Consumables | $ | $ | $ | $ | $ | |||||||||||||||
| Hardware and software | ||||||||||||||||||||
| Services | ||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | |||||||||||||||
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 June 30, | ||||||||
| 2024 | 2023 | |||||||
| United States | $ | $ | ||||||
| China | ||||||||
| Other | ||||||||
| Total revenues | $ | $ | ||||||
Other than China, no foreign country exceeded 10% of total revenues for the three months ended June 30, 2024 and 2023.
Contract Balances
Our contracts have varying payment terms and conditions. Some customers prepay for products and services, resulting in unearned revenues or customer deposits, called contract liabilities. Short-term contract liabilities are included within unearned revenues in the accompanying unaudited Condensed Consolidated Balance Sheets, and long-term contract liabilities are included within other noncurrent liabilities in the accompanying unaudited Condensed Consolidated Balance Sheets. The significant majority of our revenues and related receivables and contract liabilities are generated from contracts with customers with original durations of 12 months or less. Contract liabilities will be recognized to revenue as we satisfy our obligations under the terms of the contracts.
A summary of contract liabilities is as follows:
| Contract liabilities as of March 31, 2024 | $ | |||
| Prior year liabilities recognized in revenues during the three months ended June 30, 2024 | ( | ) | ||
| Contract liabilities added during the three months ended June 30, 2024, net of revenues recognized | ||||
| Contract liabilities as of June 30, 2024 | $ |
Note 4. Fair Value Measurements
Our financial instruments consist primarily of cash and cash equivalents, trade accounts receivable, obligations under trade accounts payable, and debt. Due to their short-term nature, the carrying values for cash and cash equivalents, trade accounts receivable, and trade accounts payable approximate fair value; they are classified within Level 1 of the fair value hierarchy.
The financial instruments that subject us to the highest concentration of credit risk are cash and accounts receivable. We maintain relationships and cash deposits at multiple banking institutions across the world in an effort to diversify and reduce risk of loss. Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sales.
On April 5, 2024, we entered into separate, privately negotiated purchase agreements with a limited number of holders of our
The estimated fair value and carrying value of the Notes were as follows:
| June 30, 2024 | March 31, 2024 | |||||||||||||||
| Carrying Value | Fair Value (Level 2) | Carrying Value | Fair Value (Level 2) | |||||||||||||
| Notes | $ | $ | $ | $ | ||||||||||||
The carrying amount of the term loan and revolving line of credit (together, the "Credit Facility") on the Condensed Consolidated Balance Sheets approximates fair value due to the variable interest rate pricing on the debt with the balance bearing an interest rate approximating current market rates.
For the GKE acquisition, we held back approximately $
During fiscal year 2023, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“the Belyntic acquisition”). The Belyntic acquisition obligates us to pay contingent consideration of up to $
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 months ended June 30, 2024 or June 30, 2023. 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 months ended June 30, 2024 or June 30, 2023.
Note 5. Supplemental Information
Inventories consisted of the following:
| June 30, 2024 | March 31, 2024 | |||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Total inventories | $ | $ | ||||||
Prepaid expenses and other current assets consisted of the following:
| June 30, 2024 | March 31, 2024 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deposits | ||||||||
| Prepaid income taxes | ||||||||
| Other current assets | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
Accrued payroll and benefits consisted of the following:
| June 30, 2024 | March 31, 2024 | |||||||
| Bonus payable | $ | $ | ||||||
| Wages and paid-time-off payable | ||||||||
| Payroll related taxes | ||||||||
| Other benefits payable | ||||||||
| Total accrued payroll and benefits | $ | $ | ||||||
Other accrued expenses consisted of the following:
| June 30, 2024 | March 31, 2024 | |||||||
| Accrued business taxes | $ | $ | ||||||
| Current operating lease liabilities | ||||||||
| Income taxes payable | ||||||||
| Current acquisition-related holdbacks | ||||||||
| Other | ||||||||
| Total other accrued expenses | $ | $ | ||||||
The increase in other accrued expenses is primarily due to the reclassification of the GKE acquisition consideration held back to current from long term as of June 30, 2024.
Other noncurrent liabilities consisted of the following:
| June 30, 2024 | March 31, 2024 | |||||||
| Noncurrent operating lease liabilities | $ | $ | ||||||
| Noncurrent acquisition-related holdbacks | ||||||||
| Other | ||||||||
| Total other noncurrent liabilities | $ | $ | ||||||
The decrease in other noncurrent liabilities is primarily due to the reclassification of the GKE acquisition consideration held back to current from long term as of June 30, 2024.
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Depreciation expense in cost of revenues | $ | $ | ||||||
| Depreciation expense in operating expense | ||||||||
| Total depreciation expense | $ | $ | ||||||
$
Note 6. Goodwill and Intangible Assets, Net
Finite-lived intangible assets consisted of the following:
| June 30, 2024 | March 31, 2024 | |||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
| Customer relationships | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Other intangibles | ( | ) | ( | ) | ||||||||||||||||||||
| Total finite-lived intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
Amortization expense for finite-lived intangible assets was as follows:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Amortization in cost of revenues | $ | $ | ||||||
| Amortization in general and administrative | ||||||||
| Total amortization expense | $ | $ | ||||||
For the following fiscal years ending March 31, amortization expense is estimated as follows:
| Fiscal Year | Amortization Expense | |||
| Remainder of 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
The change in the carrying amount of goodwill was as follows:
| Sterilization and Disinfection Control | Clinical Genomics | Biopharmaceutical Development | Calibration Solutions | Total | ||||||||||||||||
| March 31, 2024 | $ | $ | $ | $ | ||||||||||||||||
| Effect of foreign currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| June 30, 2024 | $ | $ | $ | $ | $ | |||||||||||||||
Note 7. Indebtedness
Credit Facility
On March 5, 2021, we entered into a -year senior secured credit agreement that included 1) a revolving credit facility with an aggregate principal amount of up to $
On October 5, 2023, we amended the terms of the Credit Facility to increase the maximum principal amount available to us under the Revolver from $
On April 5, 2024, we further amended and restated the terms of the Credit Facility to:
| (i) | Extend the maturity of the Credit Facility to April 2029; |
| (ii) | Allow proceeds from the Credit Facility to be used to redeem some or all of the Company’s 2025 Notes; |
| (iii) | Include a $75,000 senior secured term loan facility (the “Term Loan”), which is subject to principal amortization payments; and |
| (iv) | Make certain changes to the financial covenants. |
In conjunction with the amendment and restatement of the Credit Facility during the three months ended June 30, 2024, we incurred $
Amounts borrowed under the Credit Facility bear interest at either a base rate or a SOFR rate plus an applicable spread ranging from
The financial covenants in the Credit Facility as amended include a maximum leverage ratio of
Term Loan
We borrowed $
We are required to make quarterly principal payments on the Term Loan. For the following fiscal years ending March 31, debt payments on the Term Loan are required as follows:
| Fiscal Year | Amount | |||
| Remainder of 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total Principal Remaining | $ | |||
The net carrying amount of the Term Loan was as follows:
| June 30, 2024 | March 31, 2024 | |||||||
| Term Loan (8.4% as of June 30, 2024) | $ | $ | ||||||
| Less: discount and debt issuance costs | ( | ) | ||||||
| Less: current portion | ( | ) | ||||||
| Noncurrent portion | $ | $ | ||||||
The effective interest rate on the Term Loan at the time of borrowing was
Revolver
As of June 30, 2024, the outstanding balance under the Revolver was $
We are obligated to pay quarterly unused commitment fees of between
The balance of unamortized customary lender fees, including fees related to the April 5, 2024 amendment and restatement, was $
Convertible Notes
On August 12, 2019, we issued an aggregate principal amount of $
On April 5, 2024, we entered into separate, privately negotiated transactions with certain holders of the Notes to repurchase $
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 months ended June 30, 2024. As of June 30, 2024, the Notes were classified as a noncurrent liability on our Condensed Consolidated Balance Sheets. The if-converted value of the Notes did not exceed the principal balance as of June 30, 2024.
The net carrying amount of the Notes was as follows:
| June 30, 2024 | March 31, 2024 | |||||||
| Principal outstanding | $ | $ | ||||||
| Unamortized debt issuance costs | ( | ) | ( | ) | ||||
| Net carrying value | $ | $ | ||||||
We recognized interest expense on the Notes as follows:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Coupon interest expense at 1.375% | $ | $ | ||||||
| Amortization of debt issuance costs | ||||||||
| Total interest and amortization of debt issuance costs | $ | $ | ||||||
The effective interest rate on the Notes is approximately
Note 8. Stockholders' Equity
Stock-Based Compensation
During the three months ended June 30, 2024, we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the Mesa Laboratories, Inc. Amended and Restated 2021 Equity Incentive Plan, which authorizes the issuance of
Expense recognized related to stock-based compensation is as follows:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Stock-based compensation expense | $ | $ | ||||||
| Stock-based compensation expense, net of tax | $ | $ | ||||||
Stock-based compensation expense is included in cost of revenues, selling, general and administrative, and research and development expense in the accompanying unaudited Condensed Consolidated Statements of Operations.
The following is a summary of stock option award activity for the three months ended June 30, 2024:
| Stock Options | ||||||||||||||||
| Shares Subject to Options | Weighted- Average Exercise Price per Share | Weighted-Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding as of March 31, 2024 | $ | $ | ||||||||||||||
| Awards granted | ||||||||||||||||
| Awards forfeited or expired | ( | ) | ||||||||||||||
| Awards exercised | ||||||||||||||||
| Outstanding as of June 30, 2024 | $ | $ | ||||||||||||||
The following is a summary of RSU and PSU award activity for the three months ended June 30, 2024:
| Time-Based Restricted Stock Units | Performance-Based Restricted Stock Units | |||||||||||||||
| Number of Shares | Weighted- Average Grant Date Fair Value per Share | Number of Shares | Weighted- Average Grant Date Fair Value per Share | |||||||||||||
| Outstanding as of March 31, 2024 | $ | $ | ||||||||||||||
| Awards granted(1) | ||||||||||||||||
| Awards forfeited | ( | ) | ||||||||||||||
| Awards distributed | ( | ) | ||||||||||||||
| Outstanding as of June 30, 2024 | $ | $ | ||||||||||||||
| (1) | Balances for PSUs granted are reflected at target. |
Outstanding time-based RSUs vest and settle in shares of our common stock on a one-for-one basis. The RSUs granted to employees during the three months ended June 30, 2024 vest in equal installments on the first, second, and third anniversary of the grant date. We generally recognize the expense relating to RSUs, net of estimated forfeitures, on a straight-line basis over the vesting period.
We grant PSUs to certain key employees. The number of shares earned is determined at the end of each performance period based on Mesa's achievement of certain pre-defined targets per the related award agreement. The outstanding PSUs vest upon completion of the service period described in the award agreement. We recognize the expense relating to the performance-based RSUs based on the probable outcome of achievement of the performance targets on a straight-line basis over the service period.
During the three months ended June 30, 2024, the Compensation Committee of the Board of Directors created a plan to award
Note 9. Earnings (Loss) Per Share
The following table presents a reconciliation of the denominators used in the computation of basic and diluted earnings (loss) per share:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Net income (loss) available for shareholders | $ | $ | ( | ) | ||||
| Weighted average outstanding shares of common stock | ||||||||
| Dilutive effect of stock options | ||||||||
| Dilutive effect of RSUs | ||||||||
| Fully diluted shares | ||||||||
| Basic earnings (loss) per share | $ | $ | ( | ) | ||||
| Diluted earnings (loss) per share | $ | $ | ( | ) | ||||
Potentially dilutive securities include stock options and both time and performance based RSUs (collectively "stock awards"), as well as common shares underlying our Notes. Stock awards are excluded from the calculation of diluted EPS if they are subject to performance conditions that have not yet been achieved or if they are antidilutive. Diluted EPS does not consider the impact of potentially dilutive securities in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect in such cases.
The following stock awards were excluded from the calculation of diluted EPS:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Assumed conversion of the Notes | ||||||||
| Stock awards that were anti-dilutive | ||||||||
| Total stock awards excluded from diluted EPS | ||||||||
Shares underlying the Notes were excluded from the diluted EPS calculation for the three months ended June 30, 2024 and 2023 as the impact of the assumed conversion of the Notes calculated under the if-converted method was antidilutive. The decrease in assumed conversion of the Notes is related to the partial repayment of the Notes that occurred in the three months ended June 30, 2024 (see Note 7. "Indebtedness").
Note 10. Income Taxes
We reported an income tax provision as follows:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Income tax expense (benefit) | $ | $ | ( | ) | ||||
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
Note 11. Commitments and Contingencies
We are party to various legal proceedings arising in the ordinary course of business. As of June 30, 2024, we are not party to any legal proceeding that management believes could have a material adverse effect on our unaudited consolidated financial position, results of operations, or cash flows.
As part of the GKE acquisition, we agreed to pay the GKE sellers approximately $
As part of the Belyntic acquisition, we agreed to pay the sellers a contingency based upon approval of contractually specified patents. The estimated fair value of the probable remaining contingent consideration was $
Note 12. Segment Information
The following tables set forth our segment information:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Revenues (a): | ||||||||
| Sterilization and Disinfection Control (b) | $ | $ | ||||||
| Clinical Genomics | ||||||||
| Biopharmaceutical Development | ||||||||
| Calibration Solutions | ||||||||
| Total revenues | $ | $ | ||||||
| Gross profit: | ||||||||
| Sterilization and Disinfection Control (b) | $ | $ | ||||||
| Clinical Genomics | ||||||||
| Biopharmaceutical Development | ||||||||
| Calibration Solutions | ||||||||
| Gross profit | $ | $ | ||||||
| Reconciling items: | ||||||||
| Operating expense | ||||||||
| Operating income (loss) | ( | ) | ||||||
| Nonoperating expense, net | ||||||||
| Earnings (loss) before income taxes | $ | $ | ( | ) | ||||
| (a) | Intersegment revenues are not significant and are eliminated to arrive at consolidated totals. |
| (b) | Includes post-acquisition GKE results during the three months ended June 30, 2024. |
The following table sets forth inventories by reportable segment. Our chief operating decision maker is not provided with any other segment asset information.
| June 30, | March 31, | |||||||
| 2024 | 2024 | |||||||
| Sterilization and Disinfection Control | $ | $ | ||||||
| Clinical Genomics | ||||||||
| Biopharmaceutical Development | ||||||||
| Calibration Solutions | ||||||||
| Total inventories | $ | $ | ||||||
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, 2024 and in this report. The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements. We disclaim any obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
Overview
We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and Asia Pacific, and by independent distributors in these areas as well as throughout the rest of the world. We prefer markets in which we can establish a strong presence and achieve high gross profit margins.
As of June 30, 2024, we managed our operations in four reportable segments, or divisions: Sterilization and Disinfection Control, Clinical Genomics, Biopharmaceutical Development, and Calibration Solutions. Each of our divisions is described further in "Results of Operations" below. Unallocated corporate expenses and other business activities are reported within Corporate and Other.
Corporate Strategy
We strive to create stakeholder value and further our purpose of Protecting the Vulnerable® by growing our business both organically and through acquisitions, by improving our operating efficiency, and by continuing to hire, develop and retain top talent. As a business, we commit to our purpose of Protecting the Vulnerable® every day by taking a customer-focused approach to developing, building, and delivering our products. We serve a broad set of industries, in particular the pharmaceutical, healthcare services, and medical device verticals, in which the safety, quality, and efficacy of products is critical, by delivering the highest quality products possible. We are committed to protecting the communities we serve.
Organic Revenues Growth
Organic revenues growth is driven by the expansion of our customer base, increases in sales volumes, new product offerings, and price increases, and may be affected positively or negatively by changes in foreign currency rates. Our ability to increase organic revenues is affected by general economic conditions, both domestic and international, customer capital spending trends, competition, and the introduction of new products. Our policy is to price our products competitively and, where possible, we pass along cost increases to our customers in order to maintain our margins. We typically evaluate costs and pricing annually, with price increases effective January 1.
Inorganic Growth - Acquisitions
Over the past decade, we have consummated a number of acquisitions as part of our growth strategy. These acquisitions have allowed us to expand our product offerings and the industries we serve, globalize our company, and increase the scale at which we operate. In turn, this growth affords us the ability to improve our operating efficiency, extend our customer base, and further the pursuit of our purpose: Protecting the Vulnerable®.
Improving Our Operating Efficiency
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 months ended June 30, 2024, approximately 54% of our revenues were earned outside of the United States. We face both opportunities and challenges resulting from our geographic and industry diversity, such as varied economic environments across served geographies, technological expansion in served markets, opportunities in high-growth markets, changes in trends and costs of a global labor force, and increasing regulation. Continued growth of our revenue will depend on our ability to (i) continue commercial efforts to expand business with new and existing customers, (ii) identify, consummate, and integrate acquisitions successfully, and (iii) develop or purchase differentiated products and services. We maintain our profitability by improving the effectiveness of our sales forces, continuing to pursue cost reduction initiatives, and improving our operating efficiency.
During the first quarter of fiscal year 2025, our revenues increased 14.9%, primarily driven by revenues of $6,254 from GKE, which we acquired in the third quarter of fiscal year 2024. Organic revenues increased 2.5% during the first quarter of fiscal year 2025 primarily as a result of 21.4% organic revenues growth from our Biopharmaceutical Development division, and to a lesser extent organic revenues increases of 4.9% and 3.0% from our Sterilization and Disinfection Control division and our Calibration Solutions divisions, respectively. Our Biopharmaceutical Development division, in particular, benefited from an improved environment for capital equipment purchases in the biopharmaceutical vertical. Organic revenues growth in our Clinical Genomics business declined 14.7% as we continue to experience challenges from the economic slowdown in China and regulatory challenges that are beginning to impact sales of new Clinical Genomics instruments in the United States. However, the Clinical Genomics division's revenues increased 2.5% compared to the fourth quarter of fiscal year 2024.
Gross profit increased two percentage points in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024, primarily attributable to lower amortization of intangible expenses flowing through cost of revenues as a result of the Clinical Genomics intangible asset impairment charge recorded in the fourth quarter of fiscal year 2024 and overall organic revenues growth on our partially fixed cost structure.
Operating expenses remained relatively flat despite a 14.9% increase in revenues. Operating expenses incurred by GKE were offset by lower amortization expense as we impaired a portion of the intangible assets held by the Clinical Genomics division. As a result, operating income was $5,580, an increase of $6,244 versus the comparable prior year period. GKE contributed $2,717 to our consolidated operating income during the first quarter of fiscal year 2025.
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.
Results of Operations
Our results of operations and period-over-period changes are discussed in the following section. The tables and discussion below should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto appearing in Item 1. Financial Statements (in thousands, except percent data).
Results by reportable segment are as follows:
| Revenues |
Organic Revenues Growth (non-GAAP) (a) |
Gross Profit as a % of Revenues |
||||||||||||||||||||||
| Three Months Ended June 30, 2024 |
Three Months Ended June 30, 2023 |
Three Months Ended June 30, 2024 |
Three Months Ended June 30, 2023 |
Three Months Ended June 30, 2024 |
Three Months Ended June 30, 2023 |
|||||||||||||||||||
| Sterilization and Disinfection Control |
$ | 22,957 | $ | 15,927 | 4.9 | % | 7.8 | % | 68 | % | 73 | % | ||||||||||||
| Clinical Genomics |
11,404 | 13,369 | (14.7 | %) | (7.8 | %) | 57 | % | 50 | % | ||||||||||||||
| Biopharmaceutical Development |
12,008 | 9,889 | 21.4 | % | (10.3 | %) | 66 | % | 65 | % | ||||||||||||||
| Calibration Solutions |
11,801 | 11,460 | 3.0 | % | 12.3 | % | 61 | % | 56 | % | ||||||||||||||
| Mesa's reportable segments |
$ | 58,170 | $ | 50,645 | 2.5 | % | 0.3 | % | 64 | % | 62 | % | ||||||||||||
| (a) | Organic revenues growth is a non-GAAP measure of financial performance. See "Non-GAAP Measures" below for further information and for a reconciliation of organic revenues growth to total revenues growth. |
Our unaudited Condensed Consolidated Results of Operations are as follows:
| Three Months Ended June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| Revenues |
$ | 58,170 | $ | 50,645 | 15 | % | ||||||
| Gross profit |
37,249 | 31,183 | 19 | % | ||||||||
| Operating expense |
31,669 | 31,847 | (1 | %) | ||||||||
| Operating income (loss) |
5,580 | (664 | ) | (940 | %) | |||||||
| Net income (loss) |
$ | 3,388 | $ | (549 | ) | (717 | %) | |||||
Reportable Segments
Sterilization and Disinfection Control
Our Sterilization and Disinfection Control division manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization, decontamination, disinfection and cleaning processes in the pharmaceutical, medical device, and healthcare industries. The division also provides testing and laboratory services, mainly to the dental and pharmaceutical industries. Sterilization and Disinfection Control products are disposable and are used on a routine basis.
| Three Months Ended June 30, |
Total |
||||||||
| 2024 |
2023 |
Change |
|||||||
| Revenues |
$ | 22,957 | $ | 15,927 | 44 | % | |||
| Gross profit |
15,558 | 11,591 | 34 | % | |||||
| Gross profit as a % of revenues |
68 | % | 73 | % | (5 | pt) | |||
Sterilization and Disinfection Control's revenues increased 44% for the three months ended June 30, 2024 compared to the prior year period. The GKE acquisition contributed $6,254 of revenues to the Sterilization and Disinfection Control division and organic revenues growth was 4.9%. The organic revenues growth was primarily a result of strong commercial execution resulting in increased order quantities, particularly to life sciences customers.
Sterilization and Disinfection Control's gross profit percentage decreased 5% for the three months ended June 30, 2024 compared to the prior year period. Excluding $778 of amortization of the non-cash inventory step-up related to the GKE acquisition during the three months ended June 30, 2024, the division's gross profit would have been 71%, representing a decline of 1.5 percentage points. The decline of approximately 1.5 percentage points compared with the first quarter of fiscal year 2023, was due primarily to increased labor costs, and to a lesser extent, the impact of foreign currency changes.
Clinical Genomics
The Clinical Genomics division develops, manufactures and sells highly sensitive, low-cost, high-throughput genetic analysis tools and related consumables and services that enable clinical research labs and contract research organizations to perform genomic testing for a broad range of research applications in several therapeutic areas, such as screenings for hereditary diseases, pharmacogenetics, and oncology related applications, and toxicology research.
| Three Months Ended June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| Revenues |
$ | 11,404 | $ | 13,369 | (15 | %) | ||||||
| Gross profit |
6,490 | 6,728 | (4 | %) | ||||||||
| Gross profit as a % of revenues |
57 | % | 50 | % | 7 | pt | ||||||
Clinical Genomics revenues decreased 15% for the three months ended June 30, 2024 compared to the prior year period. The decrease for the three months ended June 30, 2024 versus the comparable prior year period was 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, and to a lesser extent, decreased instrument sales in the United States due to increased regulation of lab-developed tests.
Gross profit percentage for the Clinical Genomics division increased seven percentage points for the three months ended June 30, 2024 versus the comparable prior year period, primarily due to lower intangibles amortization expense as a result of an impairment charge recorded in the fourth quarter of fiscal year 2024. Excluding the impact of amortization expense, gross profit as a percentage of revenues would have decreased two percentage points primarily as a result of lower revenues on a partially-fixed cost base.
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 June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| Revenues |
$ | 12,008 | $ | 9,889 | 21 | % | ||||||
| Gross profit |
7,959 | 6,433 | 24 | % | ||||||||
| Gross profit as a % of revenues |
66 | % | 65 | % | 1 | pt | ||||||
Biopharmaceutical Development revenues increased 21% for the three months ended June 30, 2024 versus the comparable prior year period, primarily due to increased capital spending in the biopharmaceutical markets, resulting in an 80% increase in revenues from hardware and software sales versus the comparable prior year period.
Gross profit percentage for the three months ended June 30, 2024 increased one percentage point compared to the prior year period primarily due to increased revenues on a partially fixed cost base and a favorable product mix.
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 June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| Revenues |
$ | 11,801 | $ | 11,460 | 3 | % | ||||||
| Gross profit |
7,242 | 6,431 | 13 | % | ||||||||
| Gross profit as a % of revenues |
61 | % | 56 | % | 5 | pt | ||||||
Calibration Solutions revenues increased 3% for the three months ended June 30, 2024 compared to the prior year period, primarily due a reduction of past due backlog as supply chain issues have abated.
The Calibration Solutions division's gross profit percentage increased five percentage points for the three months ended June 30, 2024, compared to the prior year period, primarily due to increased revenues on a partially-fixed cost base and favorable product mix.
Operating Expense
Operating expense decreased one percentage point for the three months ended June 30, 2024 versus the comparable prior year period. The increase in operating expenses from GKE's operations were offset by lower amortization of intangible assets as a result of the impairment charge recorded in the fourth quarter of fiscal year 2024.
Selling Expense
Selling expense is driven primarily by labor costs, including salaries and commissions; accordingly, it may vary with sales levels.
| Three Months Ended June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| Selling expense |
$ | 10,116 | $ | 8,976 | 13 | % | ||||||
| As a percentage of revenues |
17 | % | 18 | % | (1 | pt) | ||||||
Selling expense for the three months ended June 30, 2024 increased 13% compared to the prior year period. The increase is primarily attributable to sales and marketing costs from GKE and higher commissions as revenues increased, partially offset by lower professional services costs as we made improvements to our corporate website in the prior year.
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 June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| General and administrative expense |
$ | 16,818 | $ | 18,060 | (7 | %) | ||||||
| As a percentage of revenues |
29 | % | 36 | % | (7 | pt) | ||||||
General and administrative expenses decreased 7% for the three months ended June 30, 2024 versus the comparable prior year period, largely due to the decrease of amortization of intangible assets due to an impairment charge recorded in the fourth quarter of fiscal year 2024. Excluding amortization expenses, general and administrative expense would have increased $964, primarily as a result of GKE's general and administrative expenses and costs associated with integrating GKE into Mesa's enterprise resource planning tool, partially offset by lower personnel-related expense.
Research and Development Expense
Research and development expense is predominantly comprised of labor costs and costs of third-party consultants.
| Three Months Ended June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| Research and development expense |
$ | 4,735 | $ | 4,811 | (2 | %) | ||||||
| As a percentage of revenues |
8 | % | 9 | % | (1 | pt) | ||||||
Research and development expenses decreased 2% for the three months ended June 30, 2024 versus the comparable prior year period, primarily due to cost containment efforts undertaken in fiscal year 2024 that benefitted the first quarter of fiscal year 2025.
Nonoperating (Income) Expense, Net
| Three Months Ended June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| Nonoperating expense, net |
$ | 1,675 | $ | 273 | 514 | % | ||||||
Nonoperating expense, net for the three months ended June 30, 2024 is composed primarily of a gain recorded related to the extinguishment of the Notes, offset by the combination of interest expense and debt issuance costs, and gains and losses on foreign currency transactions.
The $3,197 gain on extinguishment of the Notes was a result of the settlement of $75,000 aggregate principal of our Notes. The gain represents the difference between the fair value and the carrying value of the Notes and any unamortized debt issuance costs at the time of settlement.
Interest expense increased as the amount outstanding on our Credit Facility increased, while the principal amount of our Notes decreased. The interest rate on our Credit Facility is variable, but was approximately 6.5 percentage points higher than the fixed-rate interest on the Notes during the first quarter of fiscal year 2025.
Income Taxes
| Three Months Ended June 30, |
Total |
|||||||||||
| 2024 |
2023 |
Change |
||||||||||
| Income tax (benefit) |
$ | 517 | $ | (388 | ) | (233 | %) | |||||
| Effective tax rate |
13 | % | 41 | % | (28 | pt) | ||||||
Our effective income tax rate was 13.2% for the three months ended June 30, 2024 and 41.4% for the three months ended June 30, 2023. The effective tax rate for the three months ended June 30, 2024 differed from the statutory federal rate of 21% primarily due to the valuation allowance established for subsidiaries in the United States in the fiscal year ended March 31, 2024. The change in our effective tax rate for the three months ended June 30, 2024 compared to the prior year 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 $4,061, $2,928 and $1,404 of non-cash amortization of intangible assets acquired in business combinations, stock-based compensation expense, and depreciation expense, respectively, for the three months ended June 30, 2024).
Market-Based Awards
The performance-based restricted stock awards granted during fiscal year 2025 and fiscal year 2024 included a market-based component.
Liquidity and Capital Resources
Our sources of liquidity include cash generated from operations, cash and cash equivalents on hand, cash available from our Credit Facility and Open Market Sale AgreementSM, working capital, and potential additional equity and debt offerings. We believe that cash flows from operating activities and potential cash provided by borrowings from our Credit Facility or funds from our Open Market Sale AgreementSM, when necessary, will be sufficient to meet our ongoing operating requirements, scheduled interest payments on debt, dividend payments, and anticipated capital expenditures.
Our more significant uses of resources have historically included acquisitions, payments of debt and interest obligations, long-term capital expenditures, and quarterly dividends to shareholders. During fiscal year 2024, we acquired GKE for $87,187, net of cash and financial liabilities and inclusive of working capital adjustments. Of the total acquisition price, approximately $9,200 (at June 30, 2024 exchange rates) is being held back for a period of 18 months from the acquisition closing as security against potential indemnification losses.
Working capital is the amount by which current assets exceed current liabilities. We had working capital of $51,825 and $65,040 as of June 30, 2024 and March 31, 2024, respectively. As of June 30, 2024 and March 31, 2024, we had $28,472 and $28,214, respectively, of cash and cash equivalents.
During the first quarter of fiscal year 2025, we amended and restated our Credit Facility to:
| ● |
Allow proceeds from the Credit Facility to be used to redeem some or all of the Notes. |
| ● |
Add a $75,000 senior secured term loan facility. |
| ● |
Extend the maturity of the Credit Facility to April 2029. |
| ● |
Make certain changes to the financial covenants. |
Under the revised Credit Facility, we maintain access to our Revolver, allowing access to up to $125,000 of borrowings. During the three months ended December 31, 2023, we borrowed a total of $71,000 under the Revolver to fund the majority of the acquisition of GKE. As of June 30, 2024, $42,000 remained outstanding under the Revolver, and $83,000 was available to borrow. During July 2024, we repaid $3,500 on our Revolver.
We used the $75,000 proceeds from borrowings under the Term Loan to enter into a separate, privately negotiated purchase agreements with a limited number of holders of our Notes. Pursuant to the purchase agreements, we purchased $75,000 aggregate principal amount of the Notes for an aggregate cash purchase price of approximately $71,250. Following these transactions, $97,500 aggregate principal amount of the 2025 notes remaining outstanding.
At our current interest rate, we expect to incur interest expense of approximately $9,701 per year on borrowings of $115,353 under the Credit Facility.
In April 2022, we entered into an Open Market Sale AgreementSM pursuant to which we may issue and sell, from time to time, shares of our common stock with an aggregate value of up to $150,000. We have not sold any shares under this agreement.
We routinely evaluate opportunities for strategic acquisitions. Future material acquisitions may require that we obtain additional capital, assume additional third-party debt or incur other long-term obligations. We believe that we have the ability to issue more equity or debt in the future in order to finance our acquisition and investment activities; however, additional equity or debt financing, or other transactions, may not be available on acceptable terms, if at all.
We may from time to time repurchase or take other steps to reduce our debt. These actions may include retirements or refinancing of outstanding debt, 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 paid dividends of $0.16 per share during the three months ended June 30, 2024, as well as each quarter of fiscal year 2024.
In July 2024, we announced that our Board of Directors declared a quarterly cash dividend of $0.16 per share of common stock, payable on September 16, 2024, to shareholders of record at the close of business on August 30, 2024.
Goodwill and Intangible Assets
We perform analyses at least quarterly to identify potential impairment indicators and to assess whether it is more likely than not that our goodwill reporting units are impaired. We have determined our goodwill reporting units are not impaired as of June 30, 2024; however, impairment losses recorded in the prior fiscal year resulted in a 0% cushion between the fair and carrying values of our Clinical Genomics division and the Immunoassays reporting unit within our Biopharmaceutical Development division as of our most recent annual impairment testing date on January 1, 2024. Revenues related to our Biopharmaceutical Development division were higher than our impairment model indicated; however, our Clinical Genomics reporting unit remains susceptible to future impairment losses if actual results differ significantly from the assumptions used in our most recent impairment tests. At our last testing date, fair value of the applicable reporting units was assessed by weighting Gordon Growth and Exit Multiple discounted cash flow models and guideline public company models (one-year forward multiples), relying on unobservable Level 3 inputs, including but not limited to, discount rates, expected useful lives, applicable competitors, and anticipated revenues growth and margins. Inputs were established through discussions between Management and external valuation specialists, and were based on internal expectations for future performance, market indicators, and reputable valuation research resources. These assumptions required inputs and estimates that are subject to uncertainty such that there is a reasonable possibility that further impairment losses, which could be material to our consolidated financial statements, may occur in the future.
Cash Flows
Our cash flows from operating, investing, and financing activities were as follows (in thousands):
| Three Months Ended June 30, |
||||||||
| 2024 |
2023 |
|||||||
| Net cash provided by operating activities |
$ | 10,433 | $ | 9,939 | ||||
| Net cash (used in) investing activities |
(891 | ) | (270 | ) | ||||
| Net cash (used in) financing activities |
(9,109 | ) | (9,519 | ) | ||||
Cash flows from operating activities for the three months ended June 30, 2024 provided $10,433, an increase of $494 versus the comparable prior year period. The increase in cash flows from operating activities for the three months ended June 30 2024 compared with June 30, 2023 was primarily a result of:
| - |
improved operating performance, primary due to an increase in revenues of $7,525; |
| - |
reduction in cash used by operating assets, primarily as a result of the timing of tax payments; partially offset by |
| - |
approximately $2,080 more paid for interest as we had more debt outstanding at higher rates. |
Cash used in investing activities for the three months ended June 30, 2024 increased compared to the three months ended June 30, 2023 primarily due to spending on property, plant, and equipment.
Cash provided by financing activities resulted in a $9,109 use of cash for the three months ended June 30, 2024. Net proceeds on the term loan were almost fully offset by payments made to repurchase the Notes. We used $9,438 of cash to repay the Credit Facility compared to $8,000 in the comparable prior year period.
Contractual Obligations and Other Commercial Commitments
We are party to many contractual obligations that involve commitments to make payments to third parties in the ordinary course of business. For a description of our contractual obligations and other commercial commitments as of March 31, 2024, see our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the Securities and Exchange Commission on June 28, 2024.
On a consolidated basis, as of June 30, 2024, we had contractual obligations for open purchase orders of approximately $15,500 for routine purchases of supplies and inventory, the majority of which are payable in less than one year.
As part of the GKE acquisition, we have agreed to pay the GKE sellers approximately $9,200 (at June 30, 2024 exchange rates) of the acquisition price approximately 18 months following the acquisition, pending adjustments for potential indemnification losses that may arise.
As part of the Belyntic acquisition, we agreed to pay $1,500 to the sellers if specified patents related to the technology purchased are issued. The estimated fair value of the probable remaining contingent consideration was $650 as of June 30, 2024.
See "Liquidity and Capital Resources" for information related to future required debt payments.
Critical Accounting Policies and Estimates
Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective, or complex judgments, often because we need to estimate the effect of inherently uncertain matters. These estimates are based on historical experience and various other factors that we believe to be appropriate under the circumstances. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in our Annual Report on Form 10-K for the year ended March 31, 2024, in the Critical Accounting Policies and Estimates section of Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Although we believe that our estimates, assumptions, and judgements are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.
Non-GAAP Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles, we present organic revenues growth (reported revenues growth excluding revenues from recent acquisitions), as a supplemental non-GAAP financial measure. We believe that presenting supplemental organic revenues growth facilitates comparability between current period and prior period information, and provides insight into Mesa’s short-term and long-term financial trends. We use organic revenue growth internally to forecast and evaluate Mesa’s operating performance and to compare revenues of current periods to prior periods, for financial and operating decision-making and compensation purposes.
A reconciliation of organic revenues growth to total revenues growth is as follows:
| Total Revenues Growth |
Impact of Acquisitions |
Organic Revenues Growth (non-GAAP) |
|||||||||
| Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | ||||||
| Sterilization and Disinfection Control |
44.1% |
7.8% |
(39.2%) |
-% |
4.9% |
7.8% |
|||||
| Clinical Genomics |
(14.7%) |
(7.8%) |
-% |
-% |
(14.7%) |
(7.8%) |
|||||
| Biopharmaceutical Development |
21.4% |
(10.0%) |
-% |
(0.3%) |
21.4% |
(10.3%) |
|||||
| Calibration Solutions |
3.0% |
12.3% |
-% |
-% |
3.0% |
12.3% |
|||||
| Total Company |
14.9% |
0.4% |
(12.4%) |
0.1% |
2.5% |
0.3% |
|||||
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 June 30, 2024, we estimate that if interest rates increased 1 percentage point, we would incur approximately $1,150 of additional cash interest expense per year.
Inflation Risk
Inflation generally impacts us by increasing our costs of labor, materials, and freight. The rates of inflation experienced in recent years have not had a significant impact on our financial statements as inflationary cost increases have been offset by annual price increases. However, any price increases imposed may lead to declines in sales volume if competitors do not similarly adjust prices. We cannot reasonably estimate our ability to successfully recover any impact of inflation cost increases into the future.
Other
We have no derivative instruments. We have minimal exposure to commodity market risks.
Item 4. Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As of June 30, 2024, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report, due to a material weakness identified in the fourth quarter of fiscal year 2024 that has not yet been remediated. Two of the material weaknesses identified in the fourth quarter of fiscal year 2024 were remediated in the first quarter of fiscal year 2025. The material weaknesses are described further below.
Prior Year Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As disclosed in Part II Item 9A. "Controls and Procedures" in our annual report on Form 10-K for the year ended March 31, 2024, during fiscal year 2024 we identified three material weaknesses in internal controls:
| ● |
Controls over technical accounting for complex and non-routine transactions - We did not have adequate supervision and review controls over complex technical accounting related to non-routine goodwill impairment transactions and related analyses. |
| ● | Controls over determining the useful lives of our recently acquired intangibles - During the GKE acquisition's measurement period, we selected a useful life over which to amortize acquired customer relationships, but there was evidence that a longer useful life may be appropriate. |
| ● |
Certain controls related to change management and logical access controls related to our enterprise resource planning tool, part of our information technology general controls set, were not operating effectively for a portion of the year ended March 31, 2024. The failure of these information technology general controls extended to automated application controls across portions of financial reporting and business transaction cycles which rely upon the affected information technology application controls. |
Remediation Status for Material Weaknesses in Internal Control Over Financial Reporting
Beginning during the three months ended June 30, 2024, we implemented our previously-disclosed remediation plans:
| ● |
Technical accounting for complex and non-routine transactions - We executed two transactions during the first quarter of our fiscal year 2025, partial repurchases of the Notes and the amendment and modification of our Credit Facility, which met our definition of complex technical accounting matters for which we should obtain technical accounting support from an outside expert. We identified and selected qualified third-party advisors, including validation that that the advisors possessed adequate knowledge to address the complexities of the applicable technical accounting matters; and ensured analyses were appropriately reviewed, ensuring consensus on accounting conclusions. Following the execution of our remediation plan for these transactions, management management has concluded that the material weakness has been remediated. |
| ● | Assessment of useful lives of recently acquired intangibles - We modified the useful life of our customer relationship intangible and recorded an immaterial cumulative effect true-up to release amortization expense during the three months ended June 30, 2024. Following the execution of our remediation plan related to the useful lives of recently acquired intangible assets, management has concluded that the material weakness has been remediated. |
| ● |
Information technology general controls - Management modified the reports used as source data to test change management controls in our enterprise resource planning tool and has established new controls to enhance our review of roles, particularly roles with the ability to add, edit or delete transactions. An insufficient number of quarters has elapsed to affirm remediation of the material weakness regarding information technology general controls; we will continue to perform our reviews in future quarters. |
Changes in Internal Control Over Financial Reporting
We acquired GKE during the third quarter of our fiscal year ended March 31, 2024. As such, the scope of our assessment of our internal control over financial reporting does not yet include GKE. This exclusion is in accordance with the Securities and Exchange Commission’s general guidance that an assessment of a recently acquired business may be omitted from our scope for one year from the date of acquisition. The Company's total assets as of June 30, 2024 include $113,500 of assets held by GKE. The Company's consolidated revenues for the three months ended June 30, 2024 include $6,300 from GKE.
Other than as discussed above, during the three months ended June 30, 2024 there were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
See Note 11. “Commitments and Contingencies” within Item 1. Financial Statements for information regarding any legal proceedings in which we may be involved.
During the three months ended June 30, 2024, there were no material changes from the risk factors described in Part 1, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended March 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table provides information about the Company's purchases of equity securities for the periods indicated:
| Total Number of Shares Purchased(1) |
Average Price Paid Per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) |
Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs |
|||||||||||||
| April 2024 |
- | - | - | 162,486 | ||||||||||||
| May 2024 |
- | - | - | 162,486 | ||||||||||||
| June 2024 |
6,194 | 92.17 | - | 162,486 | ||||||||||||
| Total |
6,194 | 92.17 | - | 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. |
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:
entered into a trading arrangement on . trading arrangement is effective through May 30, 2025, and contemplates that Mr. Archbold may sell shares of Mesa Labs' common stock, subject to certain conditions.
+ Filed herewith
* Furnished herewith
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: August 5, 2024 | BY: | /s/ Gary M. Owens. Gary M. Owens Chief Executive Officer |
| DATED: August 5, 2024 | BY: | /s/ John V. Sakys John V. Sakys Chief Financial Officer |
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: August 5, 2024 |
/s/ Gary M. Owens Gary M. Owens Chief Executive Officer |
Exhibit 31.2 Certifications Pursuant to Rule 13a-14(a)
I, John V. Sakys, certify that:
|
1. |
I have reviewed this quarterly report on Form 10-Q of Mesa Laboratories, Inc.; |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 5, 2024 |
/s/ John V. Sakys John V. Sakys Chief Financial Officer |
Exhibit 32.1 Certifications Pursuant to Rule 13a-14(b) and 18 U.S.C Section 1350
In connection with the Quarterly Report of Mesa Laboratories, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gary M. Owens, Chief Executive Officer of the Company, certify, pursuant to Rule 13a-14(b) and 18 U.S.C. § 1350, that:
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 5, 2024 |
/s/ Gary M. Owens Gary M. Owens Chief Executive Officer |
Exhibit 32.2 Certifications Pursuant to Rule 13a-14(b) and 18 U.S.C Section 1350
In connection with the Quarterly Report of Mesa Laboratories, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John V. Sakys, Chief Financial Officer of the Company, certify, pursuant to Rule 13a-14(b) and 18 U.S.C. § 1350, that:
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 5, 2024 |
/s/ John V. Sakys John V. Sakys Chief Financial Officer |
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Allowance for doubtful accounts receivable | $ 1,057 | $ 1,321 |
| Property, plant, and equipment accumulated depreciation | $ 22,574 | $ 22,519 |
| Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
| Common stock, authorized (in shares) | 25,000,000 | 25,000,000 |
| Common stock, issued (in shares) | 5,409,155 | 5,394,491 |
| Common stock, outstanding (in shares) | 5,409,155 | 5,394,491 |
Condensed Consolidated Statements of Comprehensive (Loss) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Net income (loss) | $ 3,388 | $ (549) |
| Other comprehensive income (loss): | ||
| Foreign currency translation adjustments | 452 | (6,661) |
| Comprehensive income (loss) | $ 3,840 | $ (7,210) |
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, 2023 | 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 | (712) | |||
| Dividends paid, $0.16 per share | (859) | (859) | |||||
| Stock-based compensation expense | $ 2,968 | 2,968 | |||||
| Foreign currency translation | (6,661) | [1] | (6,661) | ||||
| Net income | (549) | (549) | |||||
| Balance (in shares) at Jun. 30, 2023 | 5,384,280 | ||||||
| Balance at Jun. 30, 2023 | $ 334,384 | 72,791 | (19,456) | [1] | $ 387,719 | ||
| Balance (in shares) at Mar. 31, 2024 | 5,394,491 | 5,394,491 | |||||
| Balance at Mar. 31, 2024 | $ 343,642 | (183,494) | (14,755) | [1] | $ 145,393 | ||
| Exercise of stock options and vesting of restricted stock units (in shares) | 20,858 | ||||||
| Exercise of stock options and vesting of restricted stock units | $ 0 | 0 | |||||
| Tax withholding on vesting of restricted stock units (in shares) | (6,194) | ||||||
| Tax withholding on vesting of restricted stock units | $ (571) | 0 | 0 | (571) | |||
| Dividends paid, $0.16 per share | (863) | (863) | |||||
| Stock-based compensation expense | $ 2,928 | 2,928 | |||||
| Foreign currency translation | 452 | [1] | 452 | ||||
| Net income | 3,388 | $ 3,388 | |||||
| Balance (in shares) at Jun. 30, 2024 | 5,409,155 | 5,409,155 | |||||
| Balance at Jun. 30, 2024 | $ 345,999 | $ (180,969) | $ (14,303) | [1] | $ 150,727 | ||
| |||||||
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares |
3 Months Ended | |
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Jun. 30, 2024 |
Jun. 30, 2023 |
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| Dividends paid, per share (in dollars per share) | $ 0.16 | $ 0.16 |
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
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Jun. 30, 2024 |
Jun. 30, 2023 |
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| Cash flows from operating activities: | ||
| Net income (loss) | $ 3,388 | $ (549) |
| Adjustments to reconcile net income to net cash from operating activities: | ||
| Depreciation of property, plant and equipment | 1,404 | 914 |
| Amortization of acquisition-related intangibles | 4,061 | 7,220 |
| Stock-based compensation expense | 2,928 | 2,968 |
| Gain on extinguishment of convertible notes | (3,197) | 0 |
| Amortization of step-up in inventory basis | 778 | 0 |
| Other | 1,409 | 513 |
| Cash from changes in operating assets and liabilities: | ||
| Accounts receivable, net | 3,482 | 6,456 |
| Inventories | (671) | (1,244) |
| Prepaid expenses and other assets | 969 | (2,448) |
| Accounts payable | (388) | (539) |
| Accrued liabilities and taxes payable | (2,811) | (3,217) |
| Unearned revenues | (919) | (135) |
| Net cash provided by operating activities | 10,433 | 9,939 |
| Cash flows from investing activities: | ||
| Purchases of property, plant and equipment | (891) | (270) |
| Net cash (used in) investing activities | (891) | (270) |
| Cash flows from financing activities: | ||
| Proceeds from the issuance of debt, net | 73,465 | 0 |
| Repayment of debt | (9,438) | (8,000) |
| Repurchase of convertible debt | (71,250) | 0 |
| Dividends paid | (863) | (859) |
| Other financing, net | (1,023) | (660) |
| Net cash (used in) financing activities | (9,109) | (9,519) |
| Effect of exchange rate changes on cash and cash equivalents | (175) | (684) |
| Net increase (decrease) in cash and cash equivalents | 258 | (534) |
| Cash and cash equivalents at beginning of period | 28,214 | 32,910 |
| Cash and cash equivalents at end of period | $ 28,472 | $ 32,376 |
Note 1 - Description of Business and Summary of Significant Accounting Policies |
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| Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] |
Note 1. Description of Business and Summary of Significant Accounting Policies
Description of Business
In this quarterly report on Form 10-Q, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries, is collectively referred to as “we,” “us,” “our,” the “Company,” or “Mesa.”
We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe, and Asia Pacific, and by independent distributors in these areas 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 June 30, 2024, we managed our operations in four reportable segments, or divisions:
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. In the opinion of management, such unaudited information includes all adjustments, consisting of normal recurring adjustments necessary for the fair statement of our financial position and results of operations. The results of operations for interim periods are not necessarily indicative of results that may be achieved for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The Condensed Consolidated Financial Statements include the accounts of Mesa and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We made no material changes to the application of our significant accounting policies disclosed in our annual report on Form 10-K. This quarterly report should be read in conjunction with the consolidated financial statements included in our annual report on Form 10-K for the year ended March 31, 2024.
Our fiscal year ends on March 31. References in this Quarterly Report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively.
Risks and Uncertainties
The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods. These estimates represent management's judgment about the outcome of future events. The global business environment continues to be impacted by cost pressures, the overall effects of economic uncertainty on customers' purchasing patterns, high interest rates, and other factors. It is not possible to accurately predict the future impact of such events and circumstances. Actual results could differ from our estimates.
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." ASU No. 2023-07 requires all annual disclosures currently required by Topic 280 to be included in interim 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 ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year 2025 for annual periods), and interim periods within fiscal years beginning after December 15, 2024 (our fiscal year 2026 for interim periods) on a retrospective basis. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU No. 2023-09, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for public business entities for fiscal years beginning after December 15, 2024 (our fiscal year 2026), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.
We have reviewed all recently issued accounting pronouncements and have concluded that, other than as described above, they are either not applicable to us or are not expected to have a significant impact on our consolidated financial statements.
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Note 2 - Significant Transactions |
3 Months Ended |
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Jun. 30, 2024 | |
| Notes to Financial Statements | |
| Significant Transactions [Text Block] |
Note 2. Significant Transactions
GKE - Fiscal Year 2024 Acquisition We acquired 100% of the outstanding shares of GKE GmbH and SAL GmbH effective October 16, 2023, and upon approval by applicable Chinese regulators, effective December 31, 2023, we acquired 100% of the outstanding shares of Beijing GKE Science & Technology Co. Ltd. (“GKE China.” Together with GKE GmbH and SAL GmbH, “GKE” or the "GKE acquisition").
GKE develops, manufactures and sells a highly competitive portfolio of chemical sterilization indicators, biologics, and process challenge devices to protect patient safety across global healthcare markets. GKE is included in our Sterilization and Disinfection Control ("SDC") division, and GKE's strengths in chemical indictors are complementary to SDC's strengths in biologic indicators, as chemical and biologic indicators are used in the same sterility validation workflows. Additionally, GKE’s healthcare-focused commercial capabilities in Europe and Asia greatly expand our reach in the healthcare markets in those geographies. We are working to obtain regulatory 510(k) clearance on certain GKE products for sale in the United States, which would further expand organic revenues growth opportunities from the GKE business.
We finalized our purchase price accounting of GKE during fiscal year 2024. Total cash consideration for the GKE acquisition was $87,187, net of cash and financial liabilities and inclusive of working capital adjustments. Of the total acquisition price, approximately $9,200 (at June 30, 2024 exchange rates) is being 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.
During the three months ended June 30, 2024, GKE's operations contributed $6,254 to our consolidated revenues and $3,820 to our gross profit, including $778 of inventory step-up amortization recorded to cost of revenues. Additionally, amortization expense of $532 was recorded to general and administrative expense and $110 was recorded to cost of revenues related to intangibles acquired as part of the GKE acquisition during the three months ended June 30, 2024.
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Note 3 - Revenue |
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| Revenue from Contract with Customer [Text Block] |
Note 3. Revenue
We develop, manufacture, market, sell and maintain life sciences tools and quality control instruments and related consumables.
Hardware sales include physical products such as instruments used for molecular and genetic analysis, protein synthesizers, medical meters, wireless sensor systems, data loggers, and process challenge devices. Hardware sales may be offered with accompanying perpetual or annual software licenses, which in some cases are required for the hardware to function.
Consumables are typically used on a one-time basis and require frequent replacement in our customers' operating cycles. Consumables sold by our Clinical Genomics and Biopharmaceutical Development divisions, such as reagents used for molecular and genetic analysis or solutions used for protein synthesis, are critical to the ongoing use of our instruments. Consumables such as biological indicator test strips sold by our Sterilization and Disinfection Control division are used on a standalone basis.
Revenues from hardware and consumables are recognized upon transfer to the customer, typically at the point of shipment.
We also offer maintenance, calibration, and testing service contracts. These contracts result in revenues recognized over time, for example, when we are obligated to perform labor and replace parts on an as-needed basis over a contractually specified period, or at a point in time, upon completion of a specific, discrete service. In many cases, our contracts contain both revenues recognized over time and revenues recognized at a point in time.
We evaluate our revenues internally based on business division and the nature of goods and services provided.
The following tables present disaggregated revenues for the three months ended June 30, 2024 and 2023, respectively:
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:
Other than China, no foreign country exceeded 10% of total revenues for the three months ended June 30, 2024 and 2023.
Contract Balances Our contracts have varying payment terms and conditions. Some customers prepay for products and services, resulting in unearned revenues or customer deposits, called contract liabilities. Short-term contract liabilities are included within unearned revenues in the accompanying unaudited Condensed Consolidated Balance Sheets, and long-term contract liabilities are included within other noncurrent liabilities in the accompanying unaudited Condensed Consolidated Balance Sheets. The significant majority of our revenues and related receivables and contract liabilities are generated from contracts with customers with original durations of 12 months or less. Contract liabilities will be recognized to revenue as we satisfy our obligations under the terms of the contracts.
A summary of contract liabilities is as follows:
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Note 4 - Fair Value Measurements |
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| Fair Value Disclosures [Text Block] |
Note 4. Fair Value Measurements
Our financial instruments consist primarily of cash and cash equivalents, trade accounts receivable, obligations under trade accounts payable, and debt. Due to their short-term nature, the carrying values for cash and cash equivalents, trade accounts receivable, and trade accounts payable approximate fair value; they are classified within Level 1 of the fair value hierarchy.
The financial instruments that subject us to the highest concentration of credit risk are cash and accounts receivable. We maintain relationships and cash deposits at multiple banking institutions across the world in an effort to diversify and reduce risk of loss. Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sales. No customers accounted for more than 10% of total trade receivables as of June 30, 2024.
On April 5, 2024, we entered into separate, privately negotiated purchase agreements with a limited number of holders of our 1.375% convertible senior notes due August 15, 2025 (the "Notes"), through which we repurchased $75,000 in aggregate principal amount of the Notes. See Note 7. "Indebtedness" for further information. As of June 30, 2024, we had remaining outstanding $97,500 aggregate principal amount of the Notes. We estimate the fair value of the Notes using Level 2 inputs based on the last actively traded price or observable market input preceding the end of the reporting period. The fair value of the Notes is approximately correlated to our stock price.
The estimated fair value and carrying value of the Notes were as follows:
The carrying amount of the term loan and revolving line of credit (together, the "Credit Facility") on the Condensed Consolidated Balance Sheets approximates fair value due to the variable interest rate pricing on the debt with the balance bearing an interest rate approximating current market rates.
For the GKE acquisition, we held back approximately $9,200 (at June 30, 2024 exchange rates) for a period of 18 months from the acquisition closing as security against potential indemnification losses. We estimate the fair value of consideration held back to be $8,900, using Level 3 inputs, and we adjust the estimated fair value at each reporting period through earnings.
During fiscal year 2023, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“the Belyntic acquisition”). The Belyntic acquisition obligates us to pay contingent consideration of up to $1,500 cash upon regulatory approval of certain patent applications (see Note 11. "Commitments and Contingencies"), of which $750 has not yet been paid. We estimate the fair value of the remaining contingent consideration is $650, using Level 3 inputs and a probability-weighted outcome analysis based on our expectations of patent approval, leveraging our historical experience and expert input, and we adjust the estimated fair value at each reporting period through earnings.
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 months ended June 30, 2024 or June 30, 2023. 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 months ended June 30, 2024 or June 30, 2023.
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Note 5 - Supplemental Information |
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| Supplemental Balance Sheet Disclosures [Text Block] |
Note 5. Supplemental Information
Inventories consisted of the following:
Prepaid expenses and other current assets consisted of the following:
Accrued payroll and benefits consisted of the following:
Other accrued expenses consisted of the following:
The increase in other accrued expenses is primarily due to the reclassification of the GKE acquisition consideration held back to current from long term as of June 30, 2024.
Other noncurrent liabilities consisted of the following:
The decrease in other noncurrent liabilities is primarily due to the reclassification of the GKE acquisition consideration held back to current from long term as of June 30, 2024.
$304 of the increase in depreciation expense is attributable to GKE. |
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Note 6 - Goodwill and Intangible Assets, Net |
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| Goodwill and Intangible Assets Disclosure [Text Block] |
Note 6. Goodwill and Intangible Assets, Net
Finite-lived intangible assets consisted of the following:
Amortization expense for finite-lived intangible assets was as follows:
For the following fiscal years ending March 31, amortization expense is estimated as follows:
The change in the carrying amount of goodwill was as follows:
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Note 7 - Indebtedness |
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| Debt Disclosure [Text Block] |
Note 7. Indebtedness
Credit Facility On March 5, 2021, we entered into a -year senior secured credit agreement that included 1) a revolving credit facility with an aggregate principal amount of up to $75,000 (the "Revolver"), 2) a swingline loan with an aggregate principal amount not exceeding $5,000, and 3) letters of credit with an aggregate stated amount not exceeding $2,500 at any time. The agreement also provided for an incremental term loan or an increase in revolving commitments with a minimum aggregate principal amount of $25,000 and a maximum amount of $75,000, subject to the satisfaction of certain conditions and lender considerations. We refer to the agreement in whole as the “Credit Facility.”
On October 5, 2023, we amended the terms of the Credit Facility to increase the maximum principal amount available to us under the Revolver from $75,000 to $125,000.
On April 5, 2024, we further amended and restated the terms of the Credit Facility to:
In conjunction with the amendment and restatement of the Credit Facility during the three months ended June 30, 2024, we incurred $1,987 of customary lender fees and debt issuance costs paid to third parties, of which $1,242 is related to the Revolver and $745 is related to the Term Loan. The fees are being amortized to interest expense through maturity.
Amounts borrowed under the Credit Facility bear interest at either a base rate or a SOFR rate plus an applicable spread ranging from 1.5% to 3.5%, depending on our total net leverage ratio. The interest rate on borrowings under our line of credit as of June 30, 2024 was 8.4%.
The financial covenants in the Credit Facility as amended include a maximum leverage ratio of 4.50 to 1.00 for the first five testing dates on which amounts under the Revolver are outstanding; 4.0 to 1.0 on each of the sixth, seventh, eighth, and ninth testing dates; and 3.5 to 1.0 on each testing date following the ninth testing date. The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to 1.0 and a minimum senior net leverage ratio of 3.5 to 1. Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes, engage in certain transactions with affiliates, or conduct asset sales. As of June 30, 2024, we were in compliance with all covenants under the Credit Facility.
Term Loan We borrowed $75,000 under the Term Loan on April 5, 2024, to fund the repurchase of a portion of the Notes (see “Convertible Notes” below). During the three months ended June 30, 2024, we made a required quarterly principal payment on the Term Loan of $937.
We are required to make quarterly principal payments on the Term Loan. For the following fiscal years ending March 31, debt payments on the Term Loan are required as follows:
The net carrying amount of the Term Loan was as follows:
Revolver As of June 30, 2024, the outstanding balance under the Revolver was $42,000 and $83,000 was available for borrowing. Subsequent to June 30, 2024, we repaid an additional $3,500 on the Revolver.
We are obligated to pay quarterly unused commitment fees of between 0.20% and 0.35% of the Revolver’s aggregate principal amount, based on our leverage ratio.
The balance of unamortized customary lender fees, including fees related to the April 5, 2024 amendment and restatement, was $1,428 and $321 as of June 30, 2024 and March 31, 2024, respectively.
Convertible Notes On August 12, 2019, we issued an aggregate principal amount of $172,500 of Notes. The net proceeds from the Notes, after deducting underwriting discounts and commissions and other related offering expenses payable by us, were approximately $167,056. The Notes mature on August 15, 2025, unless earlier repurchased or converted, and bear interest at a rate of 1.375% payable semi-annually in arrears on February 15 and August 15 each year. The Notes are initially convertible, subject to certain conditions, at a conversion rate of 3.5273 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $283.50 per share of common stock.
On April 5, 2024, we entered into separate, privately negotiated transactions with certain holders of the Notes to repurchase $75,000 aggregate principal amount of the Notes for an aggregate repurchase price of $71,250 in cash, plus accrued and unpaid interest of $160. We accounted for the partial repurchase of the Notes as a debt extinguishment, which resulted in the recognition of a gain on extinguishment of $3,197 in other income on the statements of operations during the three months ended June 30, 2024. As of June 30, 2024, $97,500 in aggregate principal amount of the Notes remained outstanding.
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 months ended June 30, 2024. As of June 30, 2024, the Notes were classified as a noncurrent liability on our Condensed Consolidated Balance Sheets. The if-converted value of the Notes did not exceed the principal balance as of June 30, 2024.
The net carrying amount of the Notes was as follows:
We recognized interest expense on the Notes as follows:
The effective interest rate on the Notes is approximately 1.9%.
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Note 8 - Stockholders' Equity |
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| Share-Based Payment Arrangement [Text Block] |
Note 8. Stockholders' Equity
Stock-Based Compensation During the three months ended June 30, 2024, we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the Mesa Laboratories, Inc. Amended and Restated 2021 Equity Incentive Plan, which authorizes the issuance of 660 shares of common stock to eligible participants.
Expense recognized related to stock-based compensation is as follows:
Stock-based compensation expense is included in cost of revenues, selling, general and administrative, and research and development expense in the accompanying unaudited Condensed Consolidated Statements of Operations.
The following is a summary of stock option award activity for the three months ended June 30, 2024:
The following is a summary of RSU and PSU award activity for the three months ended June 30, 2024:
Outstanding time-based RSUs vest and settle in shares of our common stock on a one-for-one basis. The RSUs granted to employees during the three months ended June 30, 2024 vest in equal installments on the first, second, and third anniversary of the grant date. We generally recognize the expense relating to RSUs, net of estimated forfeitures, on a straight-line basis over the vesting period.
We grant PSUs to certain key employees. The number of shares earned is determined at the end of each performance period based on Mesa's achievement of certain pre-defined targets per the related award agreement. The outstanding PSUs vest upon completion of the service period described in the award agreement. We recognize the expense relating to the performance-based RSUs based on the probable outcome of achievement of the performance targets on a straight-line basis over the service period.
During the three months ended June 30, 2024, the Compensation Committee of the Board of Directors created a plan to award 41 PSUs at target (“the FY25 PSUs”) to eligible employees. Of the 41 PSUs granted, 23 PSUs have a grant date fair value of $89.82 and are subject to service and company financial performance conditions. The financial performance measurement period is from April 1, 2024 through March 31, 2027. The remaining 18 PSUs have a grant date fair value of $119.54 and are subject to service and market conditions, with the market performance period measured from June 18, 2024 through June 18, 2027. The service period for all of the FY25 PSUs is from June 18, 2024 through June 18, 2027. The quantity of shares that will be earned based upon either company financial performance or market performance will range from 0% to 200% of the targeted number of shares; if the defined minimum targets are not met, then no shares will vest.
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Note 9 - Earnings (Loss) Per Share |
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| Earnings Per Share [Text Block] |
Note 9. Earnings (Loss) Per Share
The following table presents a reconciliation of the denominators used in the computation of basic and diluted earnings (loss) per share:
Potentially dilutive securities include stock options and both time and performance based RSUs (collectively "stock awards"), as well as common shares underlying our Notes. Stock awards are excluded from the calculation of diluted EPS if they are subject to performance conditions that have not yet been achieved or if they are antidilutive. Diluted EPS does not consider the impact of potentially dilutive securities in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect in such cases.
The following stock awards were excluded from the calculation of diluted EPS:
Shares underlying the Notes were excluded from the diluted EPS calculation for the three months ended June 30, 2024 and 2023 as the impact of the assumed conversion of the Notes calculated under the if-converted method was antidilutive. The decrease in assumed conversion of the Notes is related to the partial repayment of the Notes that occurred in the three months ended June 30, 2024 (see Note 7. "Indebtedness"). |
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Note 10 - Income Taxes |
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| Income Tax Disclosure [Text Block] |
Note 10. Income Taxes
We reported an income tax provision as follows:
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 13% for the three months ended June 30, 2024 compared to 41% for the three months ended June 30, 2023. The effective tax rate for the three months ended June 30, 2024 differed from the statutory federal rate of 21% primarily due to the valuation allowance established related to subsidiaries based in the United States during the fiscal year ended March 31, 2024.
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Note 11 - Commitments and Contingencies |
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| Commitments and Contingencies Disclosure [Text Block] |
Note 11. Commitments and Contingencies
We are party to various legal proceedings arising in the ordinary course of business. As of June 30, 2024, we are not party to any legal proceeding that management believes could have a material adverse effect on our unaudited consolidated financial position, results of operations, or cash flows.
As part of the GKE acquisition, we agreed to pay the GKE sellers approximately $9,200 (at June 30, 2024 exchange rates) 18 months following the acquisition date, pending adjustments for potential indemnification losses that may arise. The liability is recorded at its fair value of $8,900 in other accrued expenses on our unaudited Condensed Consolidated Balance Sheets as of June 30, 2024.
As part of the Belyntic acquisition, we agreed to pay the sellers a contingency based upon approval of contractually specified patents. The estimated fair value of the probable remaining contingent consideration was $650 as of June 30, 2024.
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Note 12 - Segment Data |
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| Segment Reporting Disclosure [Text Block] |
Note 12. Segment Information
The following tables set forth our segment information:
The following table sets forth inventories by reportable segment. Our chief operating decision maker is not provided with any other segment asset information.
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Insider Trading Arrangements shares in Thousands |
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| Material Terms of Trading Arrangement [Text Block] |
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:
entered into a trading arrangement on . trading arrangement is effective through May 30, 2025, and contemplates that Mr. Archbold may sell shares of Mesa Labs' common stock, subject to certain conditions. |
| Trading Arrangement, Individual Title | Senior Vice President of Continuous Improvement |
| Trading Arrangement, Individual Name | Brian Archbold |
| Trading Arrangement Adoption Date | June 12, 2024 |
| Rule 10b5-1 Arrangement Adopted [Flag] | true |
| Non-Rule 10b5-1 Arrangement Adopted [Flag] | false |
| Rule 10b5-1 Arrangement Terminated [Flag] | false |
| Non-Rule 10b5-1 Arrangement Terminated [Flag] | false |
| Trading Arrangement, Securities Aggregate Available Amount | 558 |
Significant Accounting Policies (Policies) |
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| Description of Business [Policy Text Block] | Description of Business
In this quarterly report on Form 10-Q, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries, is collectively referred to as “we,” “us,” “our,” the “Company,” or “Mesa.”
We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare, and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe, and Asia Pacific, and by independent distributors in these areas 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 June 30, 2024, we managed our operations in four reportable segments, or divisions:
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| Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. In the opinion of management, such unaudited information includes all adjustments, consisting of normal recurring adjustments necessary for the fair statement of our financial position and results of operations. The results of operations for interim periods are not necessarily indicative of results that may be achieved for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The Condensed Consolidated Financial Statements include the accounts of Mesa and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We made no material changes to the application of our significant accounting policies disclosed in our annual report on Form 10-K. This quarterly report should be read in conjunction with the consolidated financial statements included in our annual report on Form 10-K for the year ended March 31, 2024.
Our fiscal year ends on March 31. References in this Quarterly Report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively.
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| Risk and Uncertainties, Policy [Policy Text Block] | Risks and Uncertainties
The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods. These estimates represent management's judgment about the outcome of future events. The global business environment continues to be impacted by cost pressures, the overall effects of economic uncertainty on customers' purchasing patterns, high interest rates, and other factors. It is not possible to accurately predict the future impact of such events and circumstances. Actual results could differ from our estimates.
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| 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 ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year 2025 for annual periods), and interim periods within fiscal years beginning after December 15, 2024 (our fiscal year 2026 for interim periods) on a retrospective basis. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU No. 2023-09, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for public business entities for fiscal years beginning after December 15, 2024 (our fiscal year 2026), with early adoption permitted. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.
We have reviewed all recently issued accounting pronouncements and have concluded that, other than as described above, they are either not applicable to us or are not expected to have a significant impact on our consolidated financial statements.
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Note 3 - Revenue (Tables) |
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Note 4 - Fair Value Measurements (Tables) |
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Note 5 - Supplemental Information (Tables) |
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| Schedule of Inventory, Current [Table Text Block] |
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| Schedule of Employee Related Liabilities [Table Text Block] |
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| Schedule of Accrued Liabilities [Table Text Block] |
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| Other Noncurrent Liabilities [Table Text Block] |
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| Property, Plant and Equipment [Table Text Block] |
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Note 6 - Goodwill and Intangible Assets, Net (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Finite-Lived Intangible Assets [Table Text Block] |
|
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| Finite-Lived Intangible Assets Amortization Expense [Table Text Block] |
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| Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] |
|
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| Schedule of Goodwill [Table Text Block] |
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Note 7 - Indebtedness (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Maturities of Long-Term Debt [Table Text Block] |
|
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| Convertible Debt [Table Text Block] |
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| Interest Expense on Convertible Debt [Table Text Block] |
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| Term Loan [Member] | ||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||
| Convertible Debt [Table Text Block] |
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Note 8 - Stockholders' Equity (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block] |
|
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| Share-Based Payment Arrangement, Option, Activity [Table Text Block] |
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| Share-Based Payment Arrangement, Activity [Table Text Block] |
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Note 9 - Earnings (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
|
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| Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] |
|
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Note 10 - Income Taxes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||
| Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
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Note 12 - Segment Data (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Segment Reporting Information, by Segment [Table Text Block] |
|
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| Schedule of Depreciation and Amortization Expense [Table Text Block] |
|
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Note 2 - Significant Transactions (Details Textual) - GKE Acquisition [Member] - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Oct. 16, 2023 |
Jun. 30, 2024 |
|
| Payments to Acquire Businesses, Gross | $ 87,187 | |
| Business Combination, Consideration Transferred, Liabilities Incurred | 9,200 | |
| Proceeds from Lines of Credit | $ 71,000 | |
| Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 6,254 | |
| Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | 3,820 | |
| Inventory Step-up Cost, Increase (Decrease) During Period | 778 | |
| General and Administrative Expense [Member] | ||
| Amortization | 532 | |
| Cost of Revenues Related to Intangibles Acquired [Member] | ||
| Amortization | $ 110 | |
| GKE GmbH and SAL GmbH [Member] | ||
| Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |
| Beijing GKE Science & Technology Co. Ltd. [Member] | ||
| Business Acquisition, Percentage of Voting Interests Acquired | 100.00% |
Note 3 - Revenue (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
|||
| Revenue from Contract with Customer, Excluding Assessed Tax | [1] | $ 58,170 | $ 50,645 | ||
| Sterilization and Disinfection Control [Member] | |||||
| Revenue from Contract with Customer, Excluding Assessed Tax | $ 58,170 | ||||
| Sterilization and Disinfection Control [Member] | GKE GmbH [Member] | |||||
| Revenue from Contract with Customer, Excluding Assessed Tax | $ 6,254 | ||||
| |||||
Note 3 - Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
||||||||||
| Revenues | [1] | $ 58,170 | $ 50,645 | ||||||||||
| Sterilization and Disinfection Control [Member] | |||||||||||||
| Revenues | $ 58,170 | ||||||||||||
| Clinical Genomics [Member] | |||||||||||||
| Revenues | [2] | $ 50,645 | |||||||||||
| Consumables [Member] | Transferred at Point in Time [Member] | |||||||||||||
| Revenues | 33,010 | 27,471 | |||||||||||
| Hardware and Software [Member] | Transferred at Point in Time [Member] | |||||||||||||
| Revenues | 14,075 | 13,277 | |||||||||||
| Service [Member] | Transferred at Point in Time [Member] | |||||||||||||
| Revenues | 11,085 | 9,897 | |||||||||||
| Operating Segments [Member] | Sterilization and Disinfection Control [Member] | |||||||||||||
| Revenues | [1],[3] | 22,957 | [4] | 15,927 | |||||||||
| Operating Segments [Member] | Clinical Genomics [Member] | |||||||||||||
| Revenues | [1] | 11,404 | 13,369 | ||||||||||
| Operating Segments [Member] | Biopharmaceutical Development [Member] | |||||||||||||
| Revenues | [1] | 12,008 | 9,889 | ||||||||||
| Operating Segments [Member] | Calibration Solutions [Member] | |||||||||||||
| Revenues | [1] | 11,801 | 11,460 | ||||||||||
| Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member] | |||||||||||||
| Revenues | 20,396 | [4] | 13,707 | ||||||||||
| Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member] | |||||||||||||
| Revenues | 8,112 | 8,769 | |||||||||||
| Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member] | |||||||||||||
| Revenues | 3,922 | 4,486 | |||||||||||
| Operating Segments [Member] | Consumables [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member] | |||||||||||||
| Revenues | 580 | 509 | |||||||||||
| Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member] | |||||||||||||
| Revenues | 169 | [4] | 81 | ||||||||||
| Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member] | |||||||||||||
| Revenues | 2,183 | 3,427 | |||||||||||
| Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member] | |||||||||||||
| Revenues | 4,837 | 2,691 | |||||||||||
| Operating Segments [Member] | Hardware and Software [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member] | |||||||||||||
| Revenues | 6,886 | 7,078 | |||||||||||
| Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Sterilization and Disinfection Control [Member] | |||||||||||||
| Revenues | 2,392 | [4] | 2,139 | ||||||||||
| Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Clinical Genomics [Member] | |||||||||||||
| Revenues | 1,109 | 1,173 | |||||||||||
| Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Biopharmaceutical Development [Member] | |||||||||||||
| Revenues | 3,249 | 2,712 | |||||||||||
| Operating Segments [Member] | Service [Member] | Transferred at Point in Time [Member] | Calibration Solutions [Member] | |||||||||||||
| Revenues | $ 4,335 | $ 3,873 | |||||||||||
| |||||||||||||
Note 3 - Revenue - Revenues From External Customers (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|||||
| Revenues | [1] | $ 58,170 | $ 50,645 | |||||
| Sterilization and Disinfection Control [Member] | ||||||||
| Revenues | $ 58,170 | |||||||
| Clinical Genomics [Member] | ||||||||
| Revenues | [2] | $ 50,645 | ||||||
| UNITED STATES | ||||||||
| Revenues | 26,861 | 26,537 | ||||||
| CHINA | ||||||||
| Revenues | 6,559 | 6,113 | ||||||
| Other [Member] | ||||||||
| Revenues | $ 24,750 | $ 17,995 | ||||||
| ||||||||
Note 3 - Revenue - Contract Liabilities (Details) $ in Thousands |
3 Months Ended |
|---|---|
|
Jun. 30, 2024
USD ($)
| |
| Contract liabilities, balance | $ 15,686 |
| Prior year liabilities recognized in revenues during the three months ended June 30, 2024 | (3,805) |
| Contract liabilities added during the three months ended June 30, 2024, net of revenues recognized | 2,877 |
| Contract liabilities as of June 30, 2024 | $ 14,758 |
Note 4 - Fair Value Measurements (Details Textual) $ in Thousands |
3 Months Ended | ||||
|---|---|---|---|---|---|
|
Jun. 30, 2024
USD ($)
|
Apr. 05, 2024
USD ($)
|
Mar. 31, 2024
USD ($)
|
Nov. 17, 2022
USD ($)
|
Aug. 12, 2019 |
|
| Long-Term Debt | $ 74,063 | ||||
| GKE Acquisition [Member] | |||||
| Business Combination, Hold Back Consideration Liability | 9,200 | ||||
| Business Combination, Hold Back Consideration Liability, Fair Value | 8,900 | ||||
| GKE Acquisition [Member] | Fair Value, Inputs, Level 3 [Member] | |||||
| Business Combination, Hold Back Consideration Liability, Fair Value | 8,900 | ||||
| Belyntic Acquisition [Member] | |||||
| Business Combination, Contingent Consideration, Liability | 750 | ||||
| Business Combination, Contingent Consideration, Liability Fair Value | 650 | ||||
| Belyntic Acquisition [Member] | Other Long-term Liabilities [Member] | |||||
| Business Combination Contingent Consideration Liability, At Acquisition Date | $ 1,500 | ||||
| Belyntic Acquisition [Member] | Fair Value, Inputs, Level 3 [Member] | |||||
| Business Combination, Contingent Consideration, Liability Fair Value | 650 | ||||
| Outstanding 2025 Notes [Member] | |||||
| Debt Instrument, Repurchase Amount | $ 75,000 | ||||
| Long-Term Debt | 97,500 | $ 97,500 | |||
| Senior Notes [Member] | The Notes [Member] | |||||
| Debt Instrument, Interest Rate, Stated Percentage | 1.375% | 1.375% | |||
| Long-Term Debt | $ 96,896 | $ 171,198 | |||
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
| Number of Major Customers | 0 |
Note 4 - Fair Value Measurements - Fair Value and Carrying Value of the Notes (Details) - Senior Notes [Member] - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Reported Value Measurement [Member] | ||
| Notes | $ 96,896 | $ 171,198 |
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Notes | $ 92,016 | $ 163,013 |
Note 5 - Supplemental Information (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Depreciation | $ 1,404 | $ 914 |
| GKE Acquisition [Member] | ||
| Depreciation | $ 304 | |
Note 5 - Supplemental Information - Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Raw materials | $ 19,031 | $ 18,335 |
| Work in process | 682 | 1,256 |
| Finished goods | 12,054 | 13,084 |
| Total inventories | $ 31,767 | $ 32,675 |
Note 5 - Supplemental Information - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Prepaid expenses | $ 3,928 | $ 2,932 |
| Deposits | 1,514 | 1,898 |
| Prepaid income taxes | 1,798 | 1,237 |
| Other current assets | 3,643 | 3,341 |
| Total prepaid expenses and other current assets | $ 10,883 | $ 9,408 |
Note 5 - Supplemental Information - Accrued Payroll and Benefits (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Bonus payable | $ 2,175 | $ 3,838 |
| Wages and paid-time-off payable | 3,402 | 3,072 |
| Payroll related taxes | 2,223 | 1,956 |
| Other benefits payable | 538 | 1,069 |
| Total accrued payroll and benefits | $ 8,338 | $ 9,935 |
Note 5 - Supplemental Information - Other Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Current operating lease liabilities | $ 2,940 | $ 2,986 |
| Income taxes payable | 1,569 | 1,615 |
| Current acquisition-related holdbacks | 9,384 | 436 |
| Other | 3,323 | 2,264 |
| Total other accrued expenses | 22,484 | 12,858 |
| Other Accrued Expenses [Member] | ||
| Accrued business taxes | $ 5,268 | $ 5,557 |
Note 5 - Supplemental Information - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Other | $ 6,581 | $ 15,613 |
| GKE Acquisition [Member] | ||
| Noncurrent operating lease liabilities | 6,299 | 6,613 |
| Noncurrent acquisition-related holdbacks | 158 | 8,792 |
| Other | 124 | 208 |
| Total other noncurrent liabilities | $ 6,581 | $ 15,613 |
Note 5 - Supplemental Information - Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Depreciation, Total | $ 1,404 | $ 914 |
| Cost of Sales [Member] | ||
| Depreciation, Total | 862 | 674 |
| Operating Expense [Member] | ||
| Depreciation, Total | $ 542 | $ 240 |
Note 6 - Goodwill and Intangible Assets, Net - Other Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Gross carrying amount | $ 250,848 | $ 251,072 |
| Accumulated amortization | (141,389) | (137,320) |
| Net carrying amount | 109,459 | 113,752 |
| Customer Relationships [Member] | ||
| Gross carrying amount | 189,708 | 189,911 |
| Accumulated amortization | (107,470) | (104,528) |
| Net carrying amount | 82,238 | 85,383 |
| Other Intangible Assets [Member] | ||
| Gross carrying amount | 61,140 | 61,161 |
| Accumulated amortization | (33,919) | (32,792) |
| Net carrying amount | $ 27,221 | $ 28,369 |
Note 6 - Goodwill and Intangible Assets, Net - Amortization Expense for Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Amortization of acquisition-related intangibles | $ 4,061 | $ 7,220 |
| Cost of Sales [Member] | ||
| Amortization of acquisition-related intangibles | 647 | 1,728 |
| General and Administrative Expense [Member] | ||
| Amortization of acquisition-related intangibles | $ 3,414 | $ 5,492 |
Note 6 - Goodwill and Intangible Assets, Net - Estimated Amortization Expense (Details) $ in Thousands |
Jun. 30, 2024
USD ($)
|
|---|---|
| Remainder of 2025 | $ 13,289 |
| 2026 | 16,975 |
| 2027 | 16,319 |
| 2028 | 15,731 |
| 2029 | $ 15,182 |
Note 6 - Goodwill and Intangible Assets, Net - Change in the Carrying Amount of Goodwill (Details) $ in Thousands |
3 Months Ended |
|---|---|
|
Jun. 30, 2024
USD ($)
| |
| Goodwill | $ 180,096 |
| Effect of foreign currency translation | (374) |
| Goodwill | 179,722 |
| Operating Segments [Member] | Sterilization and Disinfection Control [Member] | |
| Goodwill | 79,430 |
| Effect of foreign currency translation | (494) |
| Goodwill | 78,936 |
| Operating Segments [Member] | Clinical Genomics [Member] | |
| Goodwill | 16,940 |
| Effect of foreign currency translation | (24) |
| Goodwill | 16,916 |
| Operating Segments [Member] | Biopharmaceutical Development [Member] | |
| Goodwill | 46,515 |
| Effect of foreign currency translation | 150 |
| Goodwill | 46,665 |
| Operating Segments [Member] | Calibration Solutions [Member] | |
| Goodwill | 37,211 |
| Effect of foreign currency translation | (6) |
| Goodwill | $ 37,205 |
Note 7 - Indebtedness (Details Textual) $ / shares in Units, $ in Thousands |
3 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
|
Jun. 30, 2024
USD ($)
|
Apr. 05, 2024
USD ($)
|
Mar. 05, 2021
USD ($)
|
Aug. 12, 2019
USD ($)
$ / shares
|
Jun. 30, 2024
USD ($)
|
Jun. 30, 2023
USD ($)
|
Mar. 31, 2024
USD ($)
|
Oct. 05, 2023
USD ($)
|
|
| Long-Term Debt, Gross | $ 74,063 | $ 74,063 | $ 0 | |||||
| Long-Term Debt | 74,063 | 74,063 | ||||||
| Repayments of Debt | 9,438 | $ 8,000 | ||||||
| Gain (Loss) on Extinguishment of Debt | 3,197 | $ (0) | ||||||
| The Credit Facility Term Loan [Member] | ||||||||
| Debt Instrument, Fee Amount | 1,987 | 1,987 | ||||||
| Senior Secured Credit Agreement [Member] | ||||||||
| Debt Instrument, Term (Year) | 4 years | |||||||
| Long-Term Debt | 42,000 | 42,000 | ||||||
| Line of Credit Facility, Remaining Borrowing Capacity | 83,000 | 83,000 | ||||||
| Repayments of Lines of Credit | 3,500 | |||||||
| Senior Secured Credit Agreement [Member] | Prepaid Expenses, Other and Other Assets [Member] | ||||||||
| Debt Issuance Costs, Net | 1,428 | 1,428 | 321 | |||||
| Senior Secured Credit Agreement [Member] | The Credit Facility Term Loan [Member] | ||||||||
| Debt Instrument, Fee Amount | 745 | $ 745 | ||||||
| Senior Secured Credit Agreement [Member] | Maximum [Member] | ||||||||
| Debt Instrument, Basis Spread on Variable Rate | 3.50% | |||||||
| Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.35% | |||||||
| Senior Secured Credit Agreement [Member] | Maximum [Member] | The Credit Facility Term Loan [Member] | ||||||||
| Line of Credit Facility, Maximum Borrowing Capacity | $ 75,000 | $ 125,000 | ||||||
| Senior Secured Credit Agreement [Member] | Minimum [Member] | ||||||||
| Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||||||
| Fixed Charge Coverage Ratio | 1.25 | |||||||
| Senior Leverage Ratio | 3.5 | |||||||
| Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.20% | |||||||
| Senior Secured Credit Agreement [Member] | Minimum [Member] | The Credit Facility Term Loan [Member] | ||||||||
| Line of Credit Facility, Maximum Borrowing Capacity | 25,000 | |||||||
| Senior Secured Credit Agreement [Member] | Swingline Loan [Member] | Maximum [Member] | ||||||||
| Line of Credit Facility, Maximum Borrowing Capacity | 5,000 | |||||||
| Senior Secured Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||
| Line of Credit Facility, Maximum Borrowing Capacity | 75,000 | |||||||
| Debt Instrument, Fee Amount | $ 1,242 | $ 1,242 | ||||||
| Senior Secured Credit Agreement [Member] | Letter of Credit [Member] | Maximum [Member] | ||||||||
| Line of Credit Facility, Maximum Borrowing Capacity | $ 2,500 | |||||||
| The Credit Facility Term Loan [Member] | ||||||||
| Debt Instrument, Interest Rate, Effective Percentage | 8.40% | 8.40% | ||||||
| Debt Instrument, Covenant, Maximum Total Leverage Ratio for the First Five Testing Dates | 4.5 | |||||||
| Debt Instrument, Covenant, Maximum Total Leverage Ratio for the Sixth, Seventh, and Eighth Testing Dates | 4 | |||||||
| Debt Instrument, Covenant, Maximum Total Leverage Ratio Following the Ninth Testing date | 3.5 | |||||||
| Term Loan [Member] | ||||||||
| Debt Instrument, Interest Rate, Effective Percentage | 8.13% | 8.13% | ||||||
| Long-Term Debt, Gross | $ 75,000 | |||||||
| Debt Instrument, Periodic Payment, Principal | $ 937 | |||||||
| The Notes [Member] | Senior Notes [Member] | ||||||||
| Debt Instrument, Interest Rate, Effective Percentage | 1.90% | 1.90% | ||||||
| Long-Term Debt, Gross | $ 97,500 | $ 97,500 | 172,500 | |||||
| Long-Term Debt | 96,896 | 96,896 | 171,198 | |||||
| Debt Issuance Costs, Net | 604 | 604 | $ 1,302 | |||||
| Debt Instrument, Face Amount | $ 172,500 | |||||||
| Proceeds from Convertible Debt | $ 167,056 | |||||||
| Debt Instrument, Interest Rate, Stated Percentage | 1.375% | 1.375% | ||||||
| Debt Instrument, Convertible, Conversion Ratio Per 1,000 Principal | 3.5273 | |||||||
| Debt Instrument, Convertible, Conversion Price (in dollars per share) | $ / shares | $ 283.5 | |||||||
| Outstanding 2025 Notes [Member] | ||||||||
| Long-Term Debt | $ 97,500 | $ 97,500 | 97,500 | |||||
| Debt Instrument, Repurchased Face Amount | 75,000 | |||||||
| Repayments of Debt | 71,250 | |||||||
| Interest Payable | $ 160 | |||||||
| Gain (Loss) on Extinguishment of Debt | $ 3,197 | |||||||
Note 7 - Indebtedness - Quarterly Periodic Payments (Details) $ in Thousands |
Jun. 30, 2024
USD ($)
|
|---|---|
| Remainder of 2025 | $ 2,813 |
| 2026 | 3,750 |
| 2027 | 5,625 |
| 2028 | 5,625 |
| 2029 | 7,500 |
| Thereafter | 48,750 |
| Total Principal Remaining | $ 74,063 |
Note 7 - Indebtedness - Carrying Amount of the Term Loan (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Term Loan (8.4% as of June 30, 2024) | $ 74,063 | $ 0 |
| Less: discount and debt issuance costs | (710) | 0 |
| Less: current portion | (3,750) | 0 |
| Noncurrent portion | $ 69,603 | $ 0 |
Note 7 - Indebtedness - Carrying Amount of the Notes (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Term Loan (8.4% as of June 30, 2024) | $ 74,063 | $ 0 |
| Total Principal Remaining | 74,063 | |
| The Notes [Member] | Senior Notes [Member] | ||
| Term Loan (8.4% as of June 30, 2024) | 97,500 | 172,500 |
| Unamortized debt issuance costs | (604) | (1,302) |
| Total Principal Remaining | $ 96,896 | $ 171,198 |
Note 7 - Indebtedness - Interest Expense on the Notes (Details) - The Notes [Member] - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Coupon interest expense at 1.375% | $ 367 | $ 593 |
| Amortization of debt issuance costs | 145 | 230 |
| Total interest and amortization of debt issuance costs | $ 512 | $ 823 |
Note 8 - Stockholders' Equity (Details Textual) shares in Thousands |
3 Months Ended |
|---|---|
|
Jun. 30, 2024
$ / shares
shares
| |
| The FY25 PSUs [Member] | Eligible Employees [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares) | 41 |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized for Service and Company Financial Performance Conditions (in shares) | 23 |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value, Shares Subject to Service and Company Performance (in dollars per share) | $ / shares | $ 89.82 |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized, Subject to Service and Market Conditions (in shares) | 18 |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value, Subject to Service and Market Conditions (in dollars per share) | $ / shares | $ 119.54 |
| The FY25 PSUs [Member] | Eligible Employees [Member] | Minimum [Member] | |
| Share-based Compensation Arrangement by Share-based Payment Award Number of Shares Issued Upon Vesting, Percentage | 0.00% |
| The FY25 PSUs [Member] | Eligible Employees [Member] | Maximum [Member] | |
| Share-based Compensation Arrangement by Share-based Payment Award Number of Shares Issued Upon Vesting, Percentage | 200.00% |
| The 2021 Equity Plan [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares) | 660 |
Note 8 - Stock Transactions and Stock-based Compensation - Allocation of Share-based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Stock-based compensation expense | $ 2,928 | $ 2,968 |
| Stock-based compensation expense, net of tax | $ 2,928 | $ 2,096 |
Note 8 - Stock Transactions and Stock-based Compensation - Stock Option and Non-vested Stock Award Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended |
|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2024 |
Mar. 31, 2024 |
|
| Options outstanding (in shares) | 194 | ||
| Options outstanding, weighted average exercise price (in dollars per share) | $ 181.89 | ||
| Outstanding, Weighted- Average Remaining Contractual Life (Year) | 3 years 1 month 6 days | 3 years 2 months 12 days | |
| Outstanding, Aggregate Intrinsic Value | $ 0 | $ 0 | $ 26 |
| Options granted (in shares) | 0 | ||
| Awards granted, weighted average exercise price (in dollars per share) | $ 0 | ||
| Options forfeited or expired (in shares) | (13) | ||
| Awards forfeited or expired, weighted average exercise price (in dollars per share) | 147.07 | ||
| Awards exercised (in shares) | 0 | ||
| Awards exercised, weighted average exercise price (in dollars per share) | $ 0 | ||
| Options outstanding (in shares) | 181 | 181 | |
| Options outstanding, weighted average exercise price (in dollars per share) | $ 184.42 | $ 184.42 | $ 181.89 |
Note 8 - Stockholders' Equity - Restricted Stock Unit Activity (Details) |
3 Months Ended | |||
|---|---|---|---|---|
|
Jun. 30, 2024
$ / shares
shares
| ||||
| Restricted Stock Units (RSUs) [Member] | ||||
| Outstanding as of March 31, 2024 (in shares) | shares | 76 | |||
| Outstanding as of March 31, 2024 (in dollars per share) | $ / shares | $ 157.83 | |||
| Awards granted(1) (in shares) | shares | 101 | [1] | ||
| Awards granted(1) (in dollars per share) | $ / shares | $ 89.82 | [1] | ||
| Awards forfeited (in shares) | shares | (2) | |||
| Awards forfeited (in dollars per share) | $ / shares | $ 154.69 | |||
| Awards distributed (in shares) | shares | (21) | |||
| Awards distributed, weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 182.89 | |||
| Outstanding as of June 30, 2024 (in shares) | shares | 154 | |||
| Outstanding as of June 30, 2024 (in dollars per share) | $ / shares | $ 109.69 | |||
| Performance Stock Units [Member] | ||||
| Outstanding as of March 31, 2024 (in shares) | shares | 56 | |||
| Outstanding as of March 31, 2024 (in dollars per share) | $ / shares | $ 240.96 | |||
| Awards granted(1) (in shares) | shares | 41 | [1] | ||
| Awards granted(1) (in dollars per share) | $ / shares | $ 102.57 | [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 June 30, 2024 (in shares) | shares | 97 | |||
| Outstanding as of June 30, 2024 (in dollars per share) | $ / shares | $ 181.85 | |||
| ||||
Note 9 - Earnings (Loss) Per Share - Computation of Net Income Per Share, Basic & Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Net income (loss) | $ 3,388 | $ (549) |
| Weighted average outstanding shares of common stock (in shares) | 5,397 | 5,372 |
| Fully diluted shares (in shares) | 5,424 | 5,372 |
| Basic earnings (loss) per share (in dollars per share) | $ 0.63 | $ (0.1) |
| Diluted earnings (loss) per share (in dollars per share) | $ 0.62 | $ (0.1) |
| Share-Based Payment Arrangement, Option [Member] | ||
| Dilutive effect of shares (in shares) | 0 | 0 |
| Restricted Stock Units (RSUs) [Member] | ||
| Dilutive effect of shares (in shares) | 27 | 0 |
Note 9 - Earnings (Loss) Per Share - Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Total stock awards excluded from diluted EPS (in shares) | 582 | 835 |
| Assumed Conversion of Convertible Debt [Member] | ||
| Total stock awards excluded from diluted EPS (in shares) | 373 | 608 |
| Stock Awards that were Antidilutive [Member] | ||
| Total stock awards excluded from diluted EPS (in shares) | 209 | 227 |
Note 10 - Income Taxes (Details Textual) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Effective Income Tax Rate Reconciliation, Percent | 13.00% | 41.00% |
| Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |
Note 10 - Income Taxes - Provisions for Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
|
| Income tax expense (benefit) | $ 517 | $ (388) |
Note 11 - Commitments and Contingencies (Details Textual) $ in Thousands |
Jun. 30, 2024
USD ($)
|
|---|---|
| GKE Acquisition [Member] | |
| Business Combination, Hold Back Consideration Liability | $ 9,200 |
| Business Combination, Hold Back Consideration Liability, Fair Value | 8,900 |
| Belyntic Acquisition [Member] | |
| Business Combination, Contingent Consideration, Liability Fair Value | $ 650 |
Note 12 - Segment Data - Operating Segment Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
||||||||||
| Revenues | [1] | $ 58,170 | $ 50,645 | ||||||||||
| Sterilization and Disinfection Control (b) | 37,249 | 31,183 | |||||||||||
| Operating expense | 31,669 | 31,847 | |||||||||||
| Operating income (loss) | 5,580 | (664) | |||||||||||
| Nonoperating expense, net | (1,675) | (273) | |||||||||||
| Sterilization and Disinfection Control [Member] | |||||||||||||
| Revenues | $ 58,170 | ||||||||||||
| Clinical Genomics [Member] | |||||||||||||
| Revenues | [2] | $ 50,645 | |||||||||||
| Operating Segments [Member] | |||||||||||||
| Operating expense | 31,669 | 31,847 | |||||||||||
| Operating income (loss) | 5,580 | (664) | |||||||||||
| Nonoperating expense, net | 1,675 | 273 | |||||||||||
| Earnings (loss) before income taxes | 3,905 | (937) | |||||||||||
| Operating Segments [Member] | Sterilization and Disinfection Control [Member] | |||||||||||||
| Revenues | [1],[3] | 22,957 | [4] | 15,927 | |||||||||
| Sterilization and Disinfection Control (b) | [3] | 15,558 | 11,591 | ||||||||||
| Operating Segments [Member] | Clinical Genomics [Member] | |||||||||||||
| Revenues | [1] | 11,404 | 13,369 | ||||||||||
| Sterilization and Disinfection Control (b) | 6,490 | 6,728 | |||||||||||
| Operating Segments [Member] | Biopharmaceutical Development [Member] | |||||||||||||
| Revenues | [1] | 12,008 | 9,889 | ||||||||||
| Sterilization and Disinfection Control (b) | 7,959 | 6,433 | |||||||||||
| Operating Segments [Member] | Calibration Solutions [Member] | |||||||||||||
| Revenues | [1] | 11,801 | 11,460 | ||||||||||
| Sterilization and Disinfection Control (b) | $ 7,242 | $ 6,431 | |||||||||||
| |||||||||||||
Note 12 - Segment Data - Segment Depreciation and Amortization (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Total inventories | $ 31,767 | $ 32,675 |
| Operating Segments [Member] | Sterilization and Disinfection Control [Member] | ||
| Total inventories | 6,465 | 7,014 |
| Operating Segments [Member] | Clinical Genomics [Member] | ||
| Total inventories | 12,156 | 11,813 |
| Operating Segments [Member] | Biopharmaceutical Development [Member] | ||
| Total inventories | 6,255 | 6,304 |
| Operating Segments [Member] | Calibration Solutions [Member] | ||
| Total inventories | $ 6,891 | $ 7,544 |
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