What changed in this filing

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Item 1. Financial Statements

2026-02-03 compared with 2025-11-06 · 147 added, 156 removed, 580 unchanged (34% of the section changed)

3 unchanged sentences

(in thousands, except share amounts)

September 30,

Current assets:

58 unchanged sentences

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Income

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Three Months Ended September 30,

Six Months Ended September 30,

$ 60,737 $ 57,833 $ 120,280 $ 116,003

Three Months Ended December 31,

Nine Months Ended December 31,

Cost of revenues

23,406 22,378 46,010 43,299

37,331 35,455 74,270 72,704

Operating expense:

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

$ 2,476 $ 3,428 $ 7,218 $ 6,816

Earnings per share:

$ 0.45 $ 0.63 $ 1.32 $ 1.26

$ 0.45 $ 0.63 $ 1.30 $ 1.25

Other expense (income), net

Total non-operating expense, net

Earnings (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Earnings (loss) per share:

Weighted-average common shares outstanding:

5,512 5,413 5,488 5,405

5,535 5,471 5,543 5,448

See accompanying notes to Condensed Consolidated Financial Statements.

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

Three Months Ended September 30,

Six Months Ended September 30,

$ 2,476 $ 3,428 $ 7,218 $ 6,816

Other comprehensive income:

Three Months Ended December 31,

Nine Months Ended December 31,

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

566 4,632 6,543 5,084

Comprehensive income

$ 3,042 $ 8,060 $ 13,761 $ 11,900

Comprehensive income (loss)

See accompanying notes to Condensed Consolidated Financial Statements.

31 unchanged sentences

5,510,741 $ 365,173 $ ( 183,473 ) $ ( 3,232 ) $ 178,468

Vesting of restricted stock units

14,072 - - - -

Tax withholding on vesting of restricted stock units

Dividends paid, $ 0.16 per share

- - ( 884 ) - ( 884 )

Stock-based compensation expense

- 3,382 - - 3,382

Foreign currency translation

- - - 2,095 2,095

- - 3,630 - 3,630

December 31, 2025

5,524,813 $ 368,555 $ ( 180,727 ) $ ( 1,137 ) $ 186,691

Number of Shares

28 unchanged sentences

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

Vesting of restricted stock units

13,780 23 - - 23

Tax withholding on vesting of restricted stock units

( 32 ) ( 3 ) - - ( 3 )

Dividends paid, $ 0.16 per share

- - ( 869 ) - ( 869 )

Stock-based compensation expense

- 3,239 - - 3,239

Foreign currency translation

- - - ( 6,951 ) ( 6,951 )

- - ( 1,676 ) - ( 1,676 )

December 31, 2024

5,433,603 $ 352,788 $ ( 180,952 ) $ ( 16,622 ) $ 155,214

*Accumulated Other Comprehensive (Loss) Income

3 unchanged sentences

(in thousands)

Six Months Ended September 30,

Nine Months Ended December 31,

Cash flows from operating activities:

$ 7,218 $ 6,816

Adjustments to reconcile net income to net cash provided by operating activities:

5 unchanged sentences

Foreign currency adjustments

( 6,081 ) ( 2,883 )

Cash from changes in operating assets and liabilities:

Accounts receivable, net

1,740 ( 566 )

( 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

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

Net (decrease) in cash and cash equivalents

( 6,899 ) ( 3,877 )

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

27,321 28,214

Cash and cash equivalents at end of period

Supplemental non-cash activity:

Right of use assets obtained in exchange for lease liabilities

$ 517 $ 9,596

9 unchanged sentences

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:

As of December 31, 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.

26 unchanged sentences

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

We have not adopted any new accounting standards in fiscal year 2026.

1 unchanged sentence

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.

Improvements to Income Tax Disclosures , which enhances the transparency, effectiveness and comparability of annual income tax disclosures.

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.

Other than presentation of additional disaggregated information related to the jurisdictions in which we pay income taxes and income tax rate reconciliations in our annual income tax footnote disclosures, we do not expect the adoption of ASU No.

2023 - 09 to have a material impact on our consolidated financial statements and disclosures.

3 unchanged sentences

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.

We are currently assessing the effect the adoption of this standard will have on our consolidated financial statements and disclosures;

we 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 - 05, Financial Instruments — Credit Losses (Topic 326 ):

19 unchanged sentences

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.

Revenues from hardware and consumables are recognized upon transfer of control to the customer.

Control of hardware and consumables sold in the U.S.

and Asia Pacific typically transfers at the point of shipment, whereas control of products sold in Europe more typically occurs upon delivery to the customer site.

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

We disclose revenues consistently with how management evaluates the business, i.e., based on business unit and the nature of goods and services provided.

The following tables present disaggregated revenues for the

three and nine months ended December 31, 2025 , respectively:

Three Months Ended December 31, 2025

Sterilization and Disinfection Control

8 unchanged sentences

$ 24,914 $ 14,373 $ 14,072 $ 11,767 $ 65,126

Three Months Ended September 30, 2024

Three Months Ended December 31, 2024

Sterilization and Disinfection Control

8 unchanged sentences

$ 23,507 $ 12,237 $ 14,429 $ 12,667 $ 62,840

Six Months Ended September 30, 2025

Nine Months Ended December 31, 2025

Sterilization and Disinfection Control

8 unchanged sentences

$ 72,431 $ 39,779 $ 39,992 $ 33,204 $ 185,406

Six Months Ended September 30, 2024

Nine Months Ended December 31, 2024

Sterilization and Disinfection Control

9 unchanged sentences

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,

Three Months Ended December 31,

Nine Months Ended December 31,

United States

4 unchanged sentences

$ 65,126 $ 62,840 $ 185,406 $ 178,843

No foreign country exceeded 10% of total revenues for the three and six months ended September 30, 2025 .

No foreign country exceeded 10% of total revenues for the three and nine months ended December 31, 2025 .

Contract Liabilities

5 unchanged sentences

Contract liabilities as of March 31, 2025

Prior year liabilities recognized in revenues during the six months ended September 30, 2025

Contract liabilities added during the six months ended September 30, 2025, net of revenues recognized

Contract liabilities as of September 30, 2025

Prior year liabilities recognized in revenues during the nine months ended December 31, 2025

Contract liabilities added during the nine months ended December 31, 2025, net of revenues recognized

Contract liabilities as of December 31, 2025

Fair Value Measurements and Concentrations of Credit Risk

2 unchanged sentences

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 .

There were no nonrecurring fair value adjustments or transfers between the levels of the fair value hierarchy during the three and nine months ended December 31, 2025 .

The financial instruments that subject us to the highest concentrations of credit risk are cash and accounts receivable.

1 unchanged sentence

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 .

No customers accounted for more than 10% of total trade receivables as of December 31, 2025 .

Supplemental Information

Inventories consisted of the following:

September 30, 2025

December 31, 2025

March 31, 2025

3 unchanged sentences

Finished goods

11,432 10,030

Total inventories

1 unchanged sentence

Prepaid expenses and other current assets consisted of the following:

September 30, 2025

December 31, 2025

March 31, 2025

6 unchanged sentences

Accrued payroll and benefits consisted of the following:

September 30, 2025

December 31, 2025

March 31, 2025

7 unchanged sentences

Other accrued expenses consisted of the following:

September 30, 2025

December 31, 2025

March 31, 2025

7 unchanged sentences

Depreciation expense was as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Depreciation expense in cost of revenues

6 unchanged sentences

Intangible assets other than goodwill consisted of the following:

September 30, 2025

December 31, 2025

March 31, 2025

12 unchanged sentences

Amortization expense for intangible assets was as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Amortization in cost of revenues

3 unchanged sentences

$ 4,445 $ 4,391 $ 13,532 $ 13,002

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:

Estimated future amortization expense for the fiscal years ending March 31 is presented below, based on foreign currency exchange rates in effect as of December 31, 2025:

Amortization Expense

9 unchanged sentences

4,661 2,611 75 196 7,543

September 30, 2025

December 31, 2025

$ 84,069 $ 50,822 $ 37,288 $ 17,124 $ 189,303

Credit Facility

Our senior secured credit agreement includes:

Our secured credit agreement matures in April 2029 and includes:

A revolving credit facility with an aggregate principal amount of up to $ 125,000 (the "Revolver"),

2 unchanged sentences

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").

We refer to the agreement in whole as the “Credit Facility.”

On April 5, 2024, we borrowed $ 75,000 under the Credit Facility's 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.

Borrowings under our Credit Facility bear interest at a SOFR rate or a base rate, plus an applicable spread that varies with our total net leverage ratio.

On October 10, 2025 we amended the Credit Facility to reduce the range of the spread from 1.5 % - 3.0 % to 1.25 % - 2.50 %.

The weighted average interest rate on borrowings under the Credit Facility was 6.2 % as of December 31, 2025 and 7.2 % as of March 31, 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.

1 unchanged sentence

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.

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.

As of December 31, 2025 , we were in compliance with all covenants under the Credit Facility.

During the three and nine months ended December 31, 2025 , we made required quarterly principal payments on the Term Loan of $ 938 and $ 2,813 , respectively.

We are required to make quarterly principal payments on the Term Loan.

3 unchanged sentences

A reconciliation of the carrying amount of the Term Loan to principal outstanding was as follows:

September 30, 2025

December 31, 2025

March 31, 2025

7 unchanged sentences

We recognized interest expense on the Term Loan as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Interest expense (7.2% and 8.4% as of September 30, 2025 and 2024, respectively)

Three Months Ended December 31,

Nine Months Ended December 31,

Interest expense ( 6.2 % and 7.5 % as of December 31, 2025 and 2024, respectively)

$ 1,159 $ 1,450 $ 3,756 $ 4,551

2 unchanged sentences

$ 1,202 $ 1,488 $ 3,874 $ 4,662

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.

As of December 31, 2025 , the outstanding balance under the Revolver was $ 98,250 and $ 26,750 remained available to be borrowed.

Subsequent to December 31, 2025 , we repaid an additional $ 4,000 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.

The balance of unamortized customary lender fees related to the Revolver was $ 1,103 and $ 1,203 as of December 31, 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,

On August 15, 2025, our outstanding 1.375 % convertible notes (the "Notes") matured.

We settled the aggregate principal balance of $ 97,500 as well as $ 670 of accrued interest in cash by drawing $ 97,000 under our Revolver and using $ 1,170 of cash on hand.

Interest expense recognized in connection with the Notes during the three and nine months ended December 31, 2025 and 2024 respectively, was as follows:

Three Months Ended December 31,

Nine Months Ended December 31,

Coupon interest expense at 1.375 %

6 unchanged sentences

The net carrying amount of the Notes was as follows:

September 30, 2025

December 31, 2025

March 31, 2025

2 unchanged sentences

Net carrying value

As of September 30, 2025, no Notes remain outstanding.

Stockholders' Equity

2 unchanged sentences

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 :

During the nine months ended December 31, 2025 , we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the 2021 Equity Plan.

The following is a summary of RSU and PSU award activity for the nine months ended December 31, 2025 :

Time-Based Restricted Stock Units

12 unchanged sentences

( 65 ) 117.08 ( 16 ) 265.32

Nonvested as of September 30, 2025

Nonvested as of December 31, 2025

177 $ 93.65 113 $ 126.12

1 unchanged sentence

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.

The significant majority of RSUs granted to employees during the nine months ended December 31, 2025 vest in equal installments on June 15, 2026, June 13, 2027 and June 13, 2028.

RSUs granted to non-employee directors during the nine months ended December 31, 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.

During the nine months ended December 31, 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.

The number of shares that will be earned is based on market performance and 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.

As of December 31, 2025 , there were 133 shares subject to options outstanding, with a weighted average exercise price per share of $ 191.04 , an intrinsic value of $ 0 and a remaining contractual life of 2.3 years.

Our Compensation Committee has not granted options to any plan participants in the current or prior fiscal year.

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,

Net income available for shareholders

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 ("EPS"):

Three Months Ended December 31,

Nine Months Ended December 31,

Net income (loss) available for shareholders

$ 3,630 $ ( 1,676 ) $ 10,848 $ 5,140

4 unchanged sentences

5,565 5,429 5,552 5,464

Basic earnings per share

Basic earnings (loss) per share

$ 0.66 $ ( 0.31 ) $ 1.97 $ 0.95

Diluted earnings per share

Diluted earnings (loss) per share

$ 0.65 $ ( 0.31 ) $ 1.95 $ 0.94

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.

( 1 ) Weighted average outstanding shares includes awards that have not yet vested and are not yet legally outstanding, but for which all vesting criteria other than the passage of time have been satisfied.

For example, this includes RSUs granted to retirement-eligible employees that are not subject to continued service requirements but have not yet vested.

The following potentially dilutive securities were excluded from the calculation of diluted EPS:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Assumed conversion of the Notes

4 unchanged sentences

228 750 399 556

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 their inclusion would be antidilutive, or if achievement of performance-based thresholds as of our reporting date would not result in the awards vesting.

Shares underlying the Notes were also potentially dilutive until maturity 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 nine months ended December 31, 2025 and 2024, as assumed conversion under the if-converted method was antidilutive in each period.

We reported an income tax provision as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Income tax (benefit) expense

6 unchanged sentences

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.

The effective tax rate for the three months ended December 31, 2025 approximated the federal statutory rate of 21%;

the effective rate was impacted by the valuation allowance on U.S.

deferred taxes, offset by the foreign differential rate.

The effective tax rate for the nine months ended December 31, 2025 differed from the statutory federal rate of 21% due to the impact of the valuation allowance on U.S.

deferred taxes, partially offset by the foreign rate differential.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) introduced several changes to U.S.

1 unchanged sentence

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.

We have incorporated the applicable provisions of OBBBA into our income tax provision as of December 31, 2025, resulting in a reduction of U.S.

current tax expense.

2 unchanged sentences

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.

As of December 31, 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.

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.

Segment information is prepared on the same basis our chief operating decision maker ("CODM"), our CEO, uses 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.

3 unchanged sentences

The following tables set forth our segment information:

Three months ended September 30, 2025

Three months ended December 31, 2025

Sterilization and Disinfection Control

19 unchanged sentences

Earnings before income taxes

Three months ended September 30, 2024

Three months ended December 31, 2024

Sterilization and Disinfection Control

8 unchanged sentences

131 338 - 191 660

Non-cash GKE inventory step-up amortization

454 - - - 454

Other cost of revenues (b)

7 unchanged sentences

Operating income

Nonoperating (income), net

Earnings before income taxes

Six months ended September 30, 2025

Nonoperating expense, net

(Loss) before income taxes

Nine months ended December 31, 2025

Sterilization and Disinfection Control

17 unchanged sentences

Operating income

Nonoperating (income), net

Nonoperating expense, net

Earnings before income taxes

Six months ended September 30, 2024

Nine months ended December 31, 2024

Sterilization and Disinfection Control

21 unchanged sentences

Earnings before income taxes

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.

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.

Intersegment revenues are eliminated to arrive at consolidated totals.

Revenues as presented are consistent with U.S.

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,

Sterilization and Disinfection Control

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements