MESA LABORATORIES INC /CO/ 10-Q

Item 1 . Financial Statements M esa Laboratories, Inc. Condensed Consolidated Balance Sheets (unaudited) (in thousands, except share amounts) September 30, March 31, 2025 2025 ASSETS Current assets: Cash and cash equivalents $ 20,422 $ 27,321 Accounts receivable, less allowance for credit losses of $ 1,833 and $ 1,186 , respectively 40,092 41,970 Inventories 27,739 25,365 Prepaid expenses and other current assets 9,180 8,029 Total current assets 97,433 102,685 Noncurrent assets: Property, plant and equipment, net of accumulated depreciation of $ 28,777 and $ 26,421 , respectively 31,835 32,333 Deferred tax asset 1,472 1,371 Other assets 17,855 18,324 Customer relationships, net 70,511 72,880 Other intangibles, net 22,757 23,995 Goodwill 188,488 181,760 Total assets $ 430,351 $ 433,348 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,090 $ 5,747 Accrued payroll and benefits 10,036 17,858 Unearned revenues 14,258 14,710 Other accrued expenses 14,223 24,601 Term loan, current portion 4,688 3,750 Convertible notes, net of debt issuance costs - 97,297 Total current liabilities 48,295 163,963 Noncurrent liabilities: Deferred tax liability 21,661 20,181 Other noncurrent liabilities 11,763 12,472 Term loan, noncurrent portion, net of debt issuance costs 64,164 66,902 Revolving line of credit 106,000 10,000 Total liabilities 251,883 273,518 Stockholders’ equity: Common stock, no par value; authorized 25,000,000 shares; issued and outstanding, 5,510,741 and 5,455,421 shares, respectively 365,173 358,541 (Accumulated deficit) ( 183,473 ) ( 188,936 ) Accumulated other comprehensive (loss) ( 3,232 ) ( 9,775 ) Total stockholders’ equity 178,468 159,830 Total liabilities and stockholders’ equity $ 430,351 $ 433,348 See accompanying notes to Condensed C onsolidated Fi nancial Statements. Page 1 Table of Contents Mesa Laboratories, Inc. Condensed Consolidated Statements of Income (unaudited) (in thousands, except per share data) Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Revenues $ 60,737 $ 57,833 $ 120,280 $ 116,003 Cost of revenues 23,406 22,378 46,010 43,299 Gross profit 37,331 35,455 74,270 72,704 Operating expense: Selling 9,796 9,849 20,729 19,965 General and administrative 17,763 17,464 35,721 34,282 Research and development 5,048 4,634 10,032 9,369 Total operating expense 32,607 31,947 66,482 63,616 Operating income 4,724 3,508 7,788 9,088 Non-operating expense (income): Interest expense and amortization of debt issuance costs 2,862 3,018 5,060 5,860 (Gain) on extinguishment of convertible notes - - - ( 2,887 ) Other (income), net ( 137 ) ( 3,322 ) ( 6,283 ) ( 1,602 ) Total non-operating expense (income), net 2,725 ( 304 ) ( 1,223 ) 1,371 Earnings before income taxes 1,999 3,812 9,011 7,717 Income tax (benefit) expense ( 477 ) 384 1,793 901 Net income $ 2,476 $ 3,428 $ 7,218 $ 6,816 Earnings per share: Basic $ 0.45 $ 0.63 $ 1.32 $ 1.26 Diluted $ 0.45 $ 0.63 $ 1.30 $ 1.25 Weighted-average common shares outstanding: Basic 5,512 5,413 5,488 5,405 Diluted 5,535 5,471 5,543 5,448 See accompanying notes to Condensed Consolidated Financial Statements. Page 2 Table of Contents Mesa Laboratories, Inc. Condensed Consolidated Statements of Comprehensive Income (unaudited) (in thousands) Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Net income $ 2,476 $ 3,428 $ 7,218 $ 6,816 Other comprehensive income: Foreign currency translation adjustments 566 4,632 6,543 5,084 Comprehensive income $ 3,042 $ 8,060 $ 13,761 $ 11,900 See accompanying notes to Condensed Consolidated Financial Statements. Page 3 Table of Contents Mesa Laboratories, Inc. Condensed Consolidated Statements of Stockholders’ Equity (unaudited) (dollars in thousands, except per share data) Common Stock Number of Shares Amount (Accumulated Deficit) Retained Earnings AOCI* Total March 31, 2025 5,455,421 $ 358,541 $ ( 188,936 ) $ ( 9,775 ) $ 159,830 Vesting of restricted stock units 57,348 - - - - Tax withholding on vesting of net restricted stock units ( 11,315 ) ( 1,061 ) - - ( 1,061 ) Dividends paid, $ 0.16 per share - - ( 873 ) - ( 873 ) Stock-based compensation expense - 3,881 - - 3,881 Foreign currency translation - - - 5,977 5,977 Net income - - 4,742 - 4,742 June 30, 2025 5,501,454 $ 361,361 $ ( 185,067 ) $ ( 3,798 ) $ 172,496 Vesting of restricted stock units 9,287 - - - - Tax withholding on vesting of net restricted stock units - - - - - Dividends paid, $ 0.16 per share - - ( 882 ) - ( 882 ) Stock-based compensation expense - 3,812 - - 3,812 Foreign currency translation - - - 566 566 Net income - - 2,476 - 2,476 September 30, 2025 5,510,741 $ 365,173 $ ( 183,473 ) $ ( 3,232 ) $ 178,468 Common Stock Number of Shares Amount (Accumulated Deficit) Retained Earnings AOCI* Total March 31, 2024 5,394,491 $ 343,642 $ ( 183,494 ) $ ( 14,755 ) $ 145,393 Vesting of restricted stock units 20,858 - - - - Tax withholding on vesting of net restricted stock units ( 6,194 ) ( 571 ) - - ( 571 ) Dividends paid, $ 0.16 per share - - ( 863 ) - ( 863 ) Stock-based compensation expense - 2,928 - - 2,928 Foreign currency translation - - - 452 452 Net income - - 3,388 - 3,388 June 30, 2024 5,409,155 $ 345,999 $ ( 180,969 ) $ ( 14,303 ) $ 150,727 Vesting of restricted stock units 13,006 - - - - Tax withholding on vesting of net restricted stock units ( 2,306 ) ( 307 ) - - ( 307 ) Dividends paid, $ 0.16 per share - - ( 866 ) - ( 866 ) Stock-based compensation expense - 3,837 - - 3,837 Foreign currency translation - - - 4,632 4,632 Net income - - 3,428 - 3,428 September 30, 2024 5,419,855 $ 349,529 $ ( 178,407 ) $ ( 9,671 ) $ 161,451 *Accumulated Other Comprehensive (Loss) Income See accompanying notes to Condensed Consolidated Financial Statements. Page 4 Table of Contents M esa Laboratories, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) Six Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 7,218 $ 6,816 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property, plant and equipment 2,719 2,922 Amortization of intangible assets 9,087 8,611 Stock-based compensation expense 7,693 6,765 Gain on extinguishment of convertible notes - ( 2,887 ) Amortization of step-up in inventory basis - 1,232 Foreign currency adjustments ( 6,081 ) ( 2,883 ) Other 2,878 1,783 Cash from changes in operating assets and liabilities: Accounts receivable, net 1,740 ( 566 ) Inventories ( 4,056 ) ( 44 ) Prepaid expenses and other assets ( 823 ) ( 372 ) Accounts payable ( 997 ) ( 189 ) Accrued liabilities and taxes payable ( 8,505 ) ( 3,865 ) Unearned revenues ( 758 ) ( 1,309 ) Net cash provided by operating activities 10,115 16,014 Cash flows from investing activities: Purchases of property, plant and equipment ( 2,101 ) ( 2,679 ) Net cash (used in) investing activities ( 2,101 ) ( 2,679 ) Cash flows from financing activities: Proceeds from debt borrowings 107,500 73,465 Repurchase and settlement of convertible note debt ( 97,500 ) ( 71,560 ) Other debt principal repayments ( 13,375 ) ( 16,875 ) GKE acquisition-related holdback payment ( 9,555 ) - Dividends paid ( 1,755 ) ( 1,729 ) Other financing, net ( 1,625 ) ( 1,330 ) Net cash (used in) financing activities ( 16,310 ) ( 18,029 ) Effect of exchange rate changes on cash and cash equivalents 1,397 817 Net (decrease) in cash and cash equivalents ( 6,899 ) ( 3,877 ) Cash and cash equivalents at beginning of period 27,321 28,214 Cash and cash equivalents at end of period $ 20,422 $ 24,337 See accompanying notes to Condensed C onsolidated Fin ancial Statements. Page 5 Table of Contents Mesa Laboratories, Inc. Notes to Condensed Consolidated Financial Statements (unaudited) (dollar and share amounts in thousands, unless otherwise specified) Note 1 . Description of Business and Summary of Significant Accounting Policies Description of Business In this quarterly report on Form 10 -Q, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries, is collectively referred to as “we,” “us,” “our,” the “Company,” or “Mesa.” We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and the Asia Pacific region ("APAC"), and by independent distributors throughout the world. As of September 30, 2025 , we managed our operations in four reportable segments, or divisions: ● Sterilization and Disinfection Control - manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization, decontamination, disinfection and cleaning processes in the pharmaceutical, medical device and healthcare industries. The division also provides testing and laboratory services, mainly to the dental and pharmaceutical industries. ● 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 renal care, environmental and process monitoring, gas flow and torque testing. ● Clinical Genomics - develops, manufactures and sells highly sensitive 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. 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 have made no material changes to the application of significant accounting policies disclosed in our Annual Report on Form 10 -K for the fiscal year ended March 31, 2025 . This report should be read in conjunction with the consolidated financial statements included in that report. Our fiscal year ends on March 31. References in this report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively. Unless otherwise indicated, amounts shown in this report are in thousands. Risks and Uncertainties The preparation of financial statements requires the use of estimates and assumptions that affect 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, regulatory changes, and other factors. Changes in, and the resulting effects of, potential government trade, stimulus or fiscal and monetary policies, interest rates, foreign currency values, supply chains, demand for goods and services, global or regional recession, or other circumstances cannot be reliably predicted. Actual results could differ from our estimates. Refer to Item 1A. Risk Factors in our Annual Report on Form 10 -K for the fiscal year ended March 31, 2025 . Recent Accounting Pronouncements We have reviewed all recently issued accounting pronouncements and have concluded that, other than as described below, they are not applicable to us and are not expected to have an impact on our consolidated financial statements. We have not adopted any new accounting standards in fiscal year 2026. Page 6 Table of Contents Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update ("ASU") 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures , which enhances the transparency, effectiveness and comparability of annual 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 and prospective or retrospective application permitted. Other than presentation of additional disaggregated data in our income tax footnote disclosures for annual periods, we do not expect the adoption of ASU No. 2023 - 09 to have a material impact on our consolidated financial statements and disclosures. In November 2024, the FASB issued ASU 2024 - 03, Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses. ASU 2024 - 03 requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The ASU is effective for fiscal years beginning after December 15, 2026 ( our fiscal year 2028 for annual periods) and interim periods within fiscal years beginning after December 15, 2027 ( our fiscal year 2029 for interim periods), with early adoption and prospective or retrospective application permitted. We are currently assessing the effect the adoption of this standard will have on our consolidated financial statements and disclosures, and we currently expect to disclose additional detail regarding the nature and classification of certain categories of expense once adopted. In July 2025, the FASB issued ASU 2025 - 09, Financial Instruments — Credit Losses (Topic 326 ): Improvements to the Measurement of Credit Losses for Receivables and Contract Assets . ASU 2025 - 09 introduces a practical expedient that removes the requirement to incorporate macroeconomic forecasts into the estimation of expected credit losses. The guidance is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Prospective adoption is required, and early adoption is permitted. We intend to early adopt ASU 2025 - 09 for our fiscal year beginning April 1, 2026, including interim periods. Upon adoption, we plan to elect the practical expedient allowing us to assume conditions at the balance sheet date will remain unchanged for the remaining life of the asset. We do not expect adoption to have a material impact on our consolidated financial statements or related disclosures. In September 2025, the FASB issued ASU 2025 - 06, Intangibles — Goodwill and Other (Topic 350 ): Internal-Use Software . ASU 2025 - 06 modernizes accounting for costs incurred in the development of internal-use software by eliminating the requirement to evaluate distinct development stages. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. ASU 2025 - 06 permits prospective, retrospective or modified retrospective adoption. Early adoption is permitted as of the beginning of an entity's annual reporting period. We intend to early adopt ASU 2025 - 06 prospectively for our fiscal year beginning April 1, 2026, including interim periods. We do not expect the guidance to have a material impact on our consolidated financial statements or related disclosures. Note 2. 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 sold by our Clinical Genomics and Biopharmaceutical Development divisions, such as reagents used for molecular and genetic analysis or solutions used for protein synthesis, are critical to the ongoing use of our instruments. Consumables such as biological and chemical indicator test strips sold by our Sterilization and Disinfection Control division are used on a standalone basis. Revenues from hardware and consumables are recognized upon transfer to the customer, typically at the point of shipment. We also offer maintenance, calibration and testing services. Services result in revenues recognized either over time, for example, when we are contractually obligated to perform labor and replace parts on an as-needed basis throughout a specified service period, or at a point in time, upon completion of a specific, discrete service. We evaluate our revenues internally based on business division and the nature of goods and services provided. The following tables present disaggregated revenues for the three and six months ended September 30, 2025 and 2024 , respectively: Three Months Ended September 30, 2025 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 19,282 $ 4,371 $ 752 $ 8,972 $ 33,377 Hardware and software 147 6,662 8,129 1,133 16,071 Services 2,678 2,887 4,689 1,035 11,289 Total revenues $ 22,107 $ 13,920 $ 13,570 $ 11,140 $ 60,737 Three Months Ended September 30, 2024 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 19,473 $ 3,826 $ 444 $ 8,178 $ 31,921 Hardware and software 144 5,168 7,848 2,451 15,611 Services 2,588 2,873 3,970 870 10,301 Total revenues $ 22,205 $ 11,867 $ 12,262 $ 11,499 $ 57,833 Page 7 Table of Contents Six Months Ended September 30, 2025 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 42,293 $ 8,207 $ 1,593 $ 17,057 $ 69,150 Hardware and software 236 10,950 15,104 2,350 28,640 Services 4,988 6,249 9,223 2,030 22,490 Total revenues $ 47,517 $ 25,406 $ 25,920 $ 21,437 $ 120,280 Six Months Ended September 30, 2024 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 39,869 $ 7,748 $ 1,024 $ 16,290 $ 64,931 Hardware and software 313 10,005 14,734 4,634 29,686 Services 4,980 6,122 8,305 1,979 21,386 Total revenues $ 45,162 $ 23,875 $ 24,063 $ 22,903 $ 116,003 Revenues from external customers are attributed to individual countries based on the locations to which the products are shipped or exported, or locations where services are performed, as follows: Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 United States $ 29,300 $ 28,078 $ 56,946 $ 54,939 China 5,315 7,390 10,744 13,949 Other 26,122 22,365 52,590 47,115 Total revenues $ 60,737 $ 57,833 $ 120,280 $ 116,003 No foreign country exceeded 10% of total revenues for the three and six months ended September 30, 2025 . Contract Liabilities Our contracts have varying payment terms and conditions. Some customers prepay for products and services, resulting in contract liabilities recorded as unearned revenues or within other noncurrent liabilities in our unaudited Condensed Consolidated Balance Sheets. The significant majority of our revenues, related receivables and contract liabilities arise from contracts with original durations of twelve months or less. Contract liabilities are recognized as 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, 2025 $ 14,803 Prior year liabilities recognized in revenues during the six months ended September 30, 2025 ( 7,312 ) Contract liabilities added during the six months ended September 30, 2025, net of revenues recognized 6,778 Contract liabilities as of September 30, 2025 $ 14,269 Note 3. Fair Value Measurements and Concentrations of Credit Risk 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 and are classified within Level 1 of the fair value hierarchy. The carrying amounts of our term loan and revolving line of credit (together, the "Credit Facility") approximate fair value due to variable interest rate pricing, with the balances bearing interest rates approximating current market rates. There were no nonrecurring fair value adjustments or transfers between the levels of the fair value hierarchy during the three and six months ended September 30, 2025 . The financial instruments that subject us to the highest concentrations of credit risk are cash and accounts receivable. We maintain relationships and cash deposits at multiple banking institutions across the world in an effort to diversify and reduce risk of loss. Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sales. No customers accounted for more than 10% of total trade receivables as of September 30, 2025 . Page 8 Table of Contents Note 4. Supplemental Information Inventories consisted of the following: September 30, 2025 March 31, 2025 Raw materials $ 15,635 $ 14,775 Work in process 672 560 Finished goods 11,432 10,030 Total inventories $ 27,739 $ 25,365 Prepaid expenses and other current assets consisted of the following: September 30, 2025 March 31, 2025 Prepaid expenses $ 3,540 $ 2,364 Deposits 1,527 1,752 Prepaid income taxes 521 1,040 Other current assets 3,592 2,873 Total prepaid expenses and other current assets $ 9,180 $ 8,029 Accrued payroll and benefits consisted of the following: September 30, 2025 March 31, 2025 Bonus payable $ 3,877 $ 10,891 Wages and paid-time-off payable 2,891 3,672 Payroll related taxes 1,811 2,475 Other benefits payable 1,457 820 Total accrued payroll and benefits $ 10,036 $ 17,858 Other accrued expenses consisted of the following: September 30, 2025 March 31, 2025 Accrued business taxes $ 6,512 $ 5,996 Current operating lease liabilities 3,815 3,523 Income taxes payable 1,432 2,157 GKE acquisition holdback - 9,315 Other 2,464 3,610 Total other accrued expenses $ 14,223 $ 24,601 Depreciation expense was as follows: Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Depreciation expense in cost of revenues $ 791 $ 904 $ 1,601 $ 1,766 Depreciation expense in operating expense 524 614 1,118 1,156 Total depreciation expense $ 1,315 $ 1,518 $ 2,719 $ 2,922 Note 5. Goodwill and Intangible Assets Intangible assets other than goodwill consisted of the following: September 30, 2025 March 31, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 198,256 $ ( 127,745 ) $ 70,511 $ 190,069 $ ( 117,189 ) $ 72,880 Other intangibles 63,014 ( 40,257 ) 22,757 61,192 ( 37,197 ) 23,995 Total finite-lived intangible assets $ 261,270 $ ( 168,002 ) $ 93,268 $ 251,261 $ ( 154,386 ) $ 96,875 Page 9 Table of Contents Amortization expense for intangible assets was as follows: Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Amortization in cost of revenues $ 707 $ 672 $ 1,409 $ 1,319 Amortization in general and administrative 3,827 3,878 7,678 7,292 Total $ 4,534 $ 4,550 $ 9,087 $ 8,611 Estimated future amortization expense for the fiscal years ending March 31 is presented below, based on foreign currency exchange rates in effect as of September 30, 2025: Fiscal Year Amortization Expense Remainder of 2026 $ 8,847 2027 17,345 2028 16,703 2029 16,129 2030 11,414 The change in the carrying amount of goodwill was as follows: Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total March 31, 2025 $ 79,408 $ 48,211 $ 37,213 $ 16,928 $ 181,760 Effect of foreign currency translation 4,614 1,886 76 152 6,728 September 30, 2025 $ 84,022 $ 50,097 $ 37,289 $ 17,080 $ 188,488 Note 6 . Indebtedness Credit Facility Our senior secured credit agreement includes: (i) A revolving credit facility with an aggregate principal amount of up to $ 125,000 (the "Revolver"), (ii) A term loan with a maximum principal amount of $ 75,000 , which is subject to escalating quarterly principal payments (the "Term Loan"), (iii) A swingline loan with an aggregate principal amount not exceeding $ 5,000 , and (iv) Letters of credit with an aggregate stated amount not exceeding $ 2,500 at any time. We refer to the agreement in whole as the “Credit Facility.” The Credit Facility matures in April 2029. On April 5, 2024, we borrowed $ 75,000 under the Term Loan to fund privately negotiated repurchases of a portion of our convertible notes ("the Notes"). On August 12, 2025, we borrowed $ 97,000 under the Revolver to fund the cash settlement of the remaining Notes, which matured on August 15, 2025 ( see "Convertible Notes" below). Amounts borrowed under the Credit Facility as of September 30, 2025 bore interest at a base rate or SOFR rate, plus an applicable spread ranging from 1.5 % to 3.5 %, depending on our total net leverage ratio. On October 10, 2025 we amended the Credit Facility to reduce the applicable spread to 1.25 % to 2.5 %. The weighted average interest rate on borrowings under the Credit Facility as of September 30, 2025 was 7.1 %. The interest rate on outstanding borrowings decreased to 6.7 % following the amendment to our Credit Facility in October 2025. The financial covenants in the Credit Facility include a maximum total net leverage ratio of 4.0 to 1.0 on each of the testing dates between March 31, 2025 and March 31, 2026 and 3.5 to 1.0 on each testing date thereafter. The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to 1.0. Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes to our business as defined in the contract, engage in certain transactions with affiliates, or conduct asset sales. As of September 30, 2025 , we were in compliance with all covenants under the Credit Facility. Page 10 Table of Contents Term Loan During the three and six months ended September 30, 2025 , we made required quarterly principal payments on the Term Loan of $ 938 and $ 1,875 , respectively. We are required to make quarterly principal payments on the Term Loan. For the fiscal years ending March 31, future debt payments on the Term Loan are required as follows: Fiscal Year Amount Remainder of 2026 $ 1,875 2027 5,625 2028 5,625 2029 7,500 2030 48,750 Total principal remaining $ 69,375 A reconciliation of the carrying amount of the Term Loan to principal outstanding was as follows: September 30, 2025 March 31, 2025 Current portion $ 4,688 $ 3,750 Noncurrent portion 64,164 66,902 Debt issuance costs 523 598 Term Loan principal outstanding $ 69,375 $ 71,250 We recognized interest expense on the Term Loan as follows: Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Interest expense (7.2% and 8.4% as of September 30, 2025 and 2024, respectively) $ 1,305 $ 1,662 $ 2,597 $ 3,101 Amortization of debt issuance costs 38 38 75 73 Total interest and amortization of debt issuance costs $ 1,343 $ 1,700 $ 2,672 $ 3,174 Revolver As of September 30, 2025 , the outstanding balance under the Revolver was $ 106,000 , and $ 19,000 remained available to be borrowed. Subsequent to September 30, 2025 , we repaid an additional $ 2,000 on the Revolver. We are obligated to pay quarterly unused commitment fees of between 0.20 % and 0.35 % of the Revolver’s aggregate principal amount, based on our leverage ratio. The balance of unamortized customary lender fees related to the Revolver was $ 1,053 and $ 1,203 as of September 30, 2025 and March 31, 2025, respectively. Convert ible Notes On August 15, 2025, our outstanding 1.375 % convertible Notes matured. We settled the aggregate principal balance of $ 97,500 as well as $ 670 of accrued interest in cash, using $ 97,000 drawn under our Revolver and $ 1,170 of cash on hand. Interest expense recognized in connection with the Notes during the three and six months ended September 30, 2025 and 2024 respectively, was as follows: Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Coupon interest expense at 1.375% $ 168 $ 335 $ 503 $ 702 Amortization of debt issuance costs 68 133 203 278 Total interest and amortization of debt issuance costs $ 236 $ 468 $ 706 $ 980 The effective interest rate on the Notes was approximately 1.9 %. The net carrying amount of the Notes was as follows: September 30, 2025 March 31, 2025 Principal outstanding $ - $ 97,500 Unamortized debt issuance costs - ( 203 ) Net carrying value $ - $ 97,297 As of September 30, 2025, no Notes remain outstanding. Page 11 Table of Contents Note 7. Stockholders' Equity Stock-Based Compensation On August 22, 2025, our shareholders approved an amendment to the Mesa Laboratories Inc. 2021 Amended and Restated Equity Incentive Plan (the "2021 Equity Plan"), increasing the number of shares authorized for issuance from 660 shares to 1,156 shares, an increase of 496 shares. During the six months ended September 30, 2025 , we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the 2021 Equity Plan. Stock-based compensation expense is included in cost of revenues, selling, general and administrative, and research and development expense in the accompanying unaudited Condensed Consolidated Statements of Income. The following is a summary of RSU and PSU award activity for the six months ended September 30, 2025 : 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 Nonvested as of March 31, 2025 145 $ 106.54 85 $ 166.31 Awards granted (1) 108 90.87 44 99.56 Awards forfeited ( 5 ) 98.14 - - Awards distributed ( 62 ) 116.85 ( 4 ) 174.73 Nonvested as of September 30, 2025 186 $ 94.13 125 $ 142.39 ( 1 ) Balances for PSUs granted are reflected at target. Time-based RSUs vest and settle in shares of our common stock on a one -for- one basis. The significant majority of RSUs granted to employees during the six months ended September 30, 2025 vest in equal installments on June 15, 2026, June 13, 2027 and June 13, 2028. RSUs granted to non-employee directors during the six months ended September 30, 2025 vest one year from the grant date. We generally recognize expense relating to RSUs, net of estimated forfeitures, on a straight-line basis over the vesting period. For time-based RSUs granted to participants who qualify as retirement-eligible under the 2021 Equity Plan, we recognize expense either upon grant or over a shortened service period, depending on the retirement notification requirements applicable to participants. During the six months ended September 30, 2025, the Compensation Committee of the Board of Directors approved a grant of 44 PSUs at target (“the FY26 PSUs”) to eligible employees. The FY26 PSUs are subject to market-based performance conditions and service conditions. The market performance measurement period and service period is from June 15, 2025 through June 15, 2028. The number of shares that will be earned based on market performance will range from 0 % to 200 % of the target number of shares. If defined minimum targets are not met, no shares will vest. As of September 30, 2025, there were 134 shares subject to options outstanding, with a weighted average exercise price per share of $ 191.02 , an intrinsic value of $ 0 and a remaining contractual life of 2.5 years. Our Compensation Committee has not granted options to any plan participants in the current or prior fiscal year. Note 8 . Earnings Per Share The following table presents a reconciliation of the denominators used in the computation of basic and diluted earnings per share ("EPS"): Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Net income available for shareholders $ 2,476 $ 3,428 $ 7,218 $ 6,816 Weighted average outstanding shares of common stock 5,512 5,413 5,488 5,405 Dilutive effect of RSUs 23 58 55 43 Fully diluted shares 5,535 5,471 5,543 5,448 Basic earnings per share $ 0.45 $ 0.63 $ 1.32 $ 1.26 Diluted earnings per share $ 0.45 $ 0.63 $ 1.30 $ 1.25 Potentially dilutive securities include stock options and unvested time and performance based RSUs (collectively "stock awards"). Stock awards are excluded from the calculation of diluted EPS if they are subject to performance or market conditions that have not yet been achieved as of our reporting date, or if their inclusion would be antidilutive. Shares underlying the Notes were also potentially dilutive until they matured on August 15, 2025; however, these shares have been excluded from the diluted EPS calculation for the amount of time they remained outstanding during three and six months ended September 30, 2025 and 2024 as assumed conversion under the if-converted method was antidilutive in each period. Page 12 Table of Contents The following potentially dilutive securities were excluded from the calculation of diluted EPS: Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Assumed conversion of the Notes 170 344 257 358 Stock awards that were anti-dilutive 294 218 228 213 Total stock awards excluded from diluted EPS 464 562 485 571 Note 9 . Income Taxes We reported an income tax provision as follows: Three Months Ended September 30, Six Months Ended September 30, 2025 2024 2025 2024 Income tax (benefit) expense $ ( 477 ) $ 384 $ 1,793 $ 901 Effective tax rate ( 23.9 )% 10.1 % 19.9 % 11.7 % For interim income tax reporting, we estimate our annual effective tax rate and apply this effective tax rate to our year-to-date pre-tax income. Each quarter, our estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. Additionally, the tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur. There is a potential for volatility in the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which they relate, changes in tax laws and foreign tax holidays, settlement with taxing authorities, and foreign currency fluctuations. The effective tax rate for both the three and six months ended September 30, 2025 differed from the statutory federal rate of 21 % primarily due to the impact of the valuation allowance on U.S. deferred taxes. During fiscal year 2025, we adjusted the valuation allowance related to our operations in Germany, and in fiscal year 2026, we incurred higher German statutory taxes. In July 2025, the One Big Beautiful Bill Act (“OBBBA”) introduced several changes to U.S. tax legislation, with certain provisions becoming applicable to us in fiscal year 2026. These changes include the immediate expensing of domestic research and experimental expenditures, accelerated tax deductions for qualified property, and modifications to certain international tax frameworks. We have incorporated the applicable provisions of OBBBA into our income tax provision as of September 30, 2025, resulting in a reduction of U.S. current tax expense. We are continuing to evaluate the impacts of the legislation on our Consolidated Financial Statements for the annual period. Note 10 . Commitments and Contingencies We are party to various legal proceedings arising in the ordinary course of business. As of September 30, 2025 , 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. Note 11 . S egment Information Segment information is prepared on the same basis used by our chief operating decision maker ("CODM"), our CEO, to assess segment performance, allocate resources, evaluate financial results, and make key operating decisions. Our four reportable segments are organized primarily by the nature of the goods and services they sell. Our CODM regularly reviews segment-level U.S. GAAP revenues and gross profit relative to forecasted and prior period amounts, as well as non-GAAP adjusted operating expense compared to budgeted amounts. Our CODM also regularly reviews non-GAAP organic revenues growth to support strategic planning and resource deployment. The following tables set forth our segment information: Three months ended September 30, 2025 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Revenues (a): $ 22,107 $ 13,920 $ 13,570 $ 11,140 $ 60,737 Less Depreciation in cost of revenues 461 66 112 152 791 Amortization in cost of revenues 140 375 - 192 707 Other cost of revenues (b) 6,636 5,350 5,223 4,699 21,908 Total segment cost of revenues 7,237 5,791 5,335 5,043 23,406 Gross Profit (c) $ 14,870 $ 8,129 $ 8,235 $ 6,097 $ 37,331 Reconciling items: Operating expense $ 32,607 Operating income 4,724 Nonoperating expense, net 2,725 Earnings before income taxes $ 1,999 Page 13 Table of Contents Three months ended September 30, 2024 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Revenues (a): $ 22,205 $ 11,867 $ 12,262 $ 11,499 $ 57,833 Less Depreciation in cost of revenues 374 40 207 283 904 Amortization in cost of revenues 134 346 - 192 672 Non-cash GKE inventory step-up amortization 454 - - - 454 Other cost of revenues (b) 6,071 4,314 4,845 5,118 20,348 Total segment cost of revenues 7,033 4,700 5,052 5,593 22,378 Gross Profit (c) $ 15,172 $ 7,167 $ 7,210 $ 5,906 $ 35,455 Reconciling items: Operating expense $ 31,947 Operating income 3,508 Nonoperating (income), net ( 304 ) Earnings before income taxes $ 3,812 Six months ended September 30, 2025 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Revenues (a): $ 47,517 $ 25,406 $ 25,920 $ 21,437 $ 120,280 Less Depreciation in cost of revenues 911 155 217 318 1,601 Amortization in cost of revenues 279 747 - 383 1,409 Other cost of revenues (b) 13,291 10,069 10,426 9,214 43,000 Total segment cost of revenues 14,481 10,971 10,643 9,915 46,010 Gross Profit (c) $ 33,036 $ 14,435 $ 15,277 $ 11,522 $ 74,270 Reconciling items: Operating expense $ 66,482 Operating income 7,788 Nonoperating (income), net ( 1,223 ) Earnings before income taxes $ 9,011 Six months ended September 30, 2024 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Revenues (a): $ 45,162 $ 23,875 $ 24,063 $ 22,903 $ 116,003 Less Depreciation in cost of revenues 793 86 392 495 1,766 Amortization in cost of revenues 245 691 - 383 1,319 Non-cash GKE inventory step-up amortization 1,232 - - - 1,232 Other cost of revenues (b) 12,162 7,972 9,219 9,629 38,982 Total segment cost of revenues 14,432 8,749 9,611 10,507 43,299 Gross Profit (c) $ 30,730 $ 15,126 $ 14,452 $ 12,396 $ 72,704 Reconciling items: Operating expense $ 63,616 Operating income 9,088 Nonoperating expense, net 1,371 Earnings before income taxes $ 7,717 (a) Intersegment revenues are not significant and are eliminated to arrive at consolidated totals. Revenues as presented are consistent with GAAP measurement principles and our CODM's review of segment information. (b) Other segment cost of revenues for each reportable segment includes product costs, personnel costs (including stock-based compensation), and other manufacturing and overhead costs necessary to produce and sell our products and services, excluding depreciation, amortization and any non-cash inventory step-up amortization expense. (c) Gross profit as presented is consistent with GAAP measurement principles and our CODM's review of segment information. The following table sets forth inventories by reportable segment. Our CODM is not provided with and does not regularly review any other segment asset information. September 30, March 31, 2025 2025 Sterilization and Disinfection Control $ 6,771 $ 5,545 Biopharmaceutical Development 5,715 4,934 Calibration Solutions 6,150 5,110 Clinical Genomics 9,103 9,776 Total inventories $ 27,739 $ 25,365 Page 14 Table of Contents