MESA LABORATORIES INC /CO/ 10-Q

Item 1 . Financial Statements M esa Laboratories, Inc. Condensed Consolidated Balance Sheets (unaudited) (in thousands, except share amounts) December 31, March 31, 2025 2025 ASSETS Current assets: Cash and cash equivalents $ 28,975 $ 27,321 Accounts receivable, less allowance for credit losses of $ 2,523 and $ 1,186 , respectively 40,233 41,970 Inventories 26,559 25,365 Prepaid expenses and other current assets 9,865 8,029 Total current assets 105,632 102,685 Noncurrent assets: Property, plant and equipment, net of accumulated depreciation of $ 29,901 and $ 26,421 , respectively 31,599 32,333 Deferred tax asset 1,474 1,371 Other assets 17,195 18,324 Customer relationships, net 67,898 72,880 Other intangibles, net 21,748 23,995 Goodwill 189,303 181,760 Total assets $ 434,849 $ 433,348 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,253 $ 5,747 Accrued payroll and benefits 13,879 17,858 Unearned revenues 14,558 14,710 Other accrued expenses 15,549 24,601 Term loan, current portion 5,156 3,750 Convertible notes, net of debt issuance costs - 97,297 Total current liabilities 54,395 163,963 Noncurrent liabilities: Deferred tax liability 21,831 20,181 Other noncurrent liabilities 10,961 12,472 Term loan, noncurrent portion, net of debt issuance costs 62,721 66,902 Revolving line of credit 98,250 10,000 Total liabilities 248,158 273,518 Stockholders’ equity: Common stock, no par value; authorized 25,000,000 shares; issued and outstanding, 5,524,813 and 5,455,421 shares, respectively 368,555 358,541 (Accumulated deficit) ( 180,727 ) ( 188,936 ) Accumulated other comprehensive (loss) ( 1,137 ) ( 9,775 ) Total stockholders’ equity 186,691 159,830 Total liabilities and stockholders’ equity $ 434,849 $ 433,348 See accompanying notes to Condensed C onsolidated Fi nancial Statements. Page 1 Table of Contents Mesa Laboratories, Inc. Condensed Consolidated Statements of Operations (unaudited) (in thousands, except per share data) Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Revenues $ 65,126 $ 62,840 $ 185,406 $ 178,843 Cost of revenues 23,331 23,086 69,341 66,385 Gross profit 41,795 39,754 116,065 112,458 Operating expense: Selling 9,986 10,450 30,715 30,415 General and administrative 18,805 18,472 54,526 52,754 Research and development 5,029 5,053 15,061 14,422 Total operating expense 33,820 33,975 100,302 97,591 Operating income 7,975 5,779 15,763 14,867 Non-operating expense (income): Interest expense and amortization of debt issuance costs 3,036 2,842 8,096 9,340 (Gain) on extinguishment of convertible notes - - - ( 2,887 ) Other expense (income), net 343 5,154 ( 5,940 ) 2,914 Total non-operating expense, net 3,379 7,996 2,156 9,367 Earnings (loss) before income taxes 4,596 ( 2,217 ) 13,607 5,500 Income tax expense (benefit) 966 ( 541 ) 2,759 360 Net income (loss) $ 3,630 $ ( 1,676 ) $ 10,848 $ 5,140 Earnings (loss) per share: Basic $ 0.66 $ ( 0.31 ) $ 1.97 $ 0.95 Diluted $ 0.65 $ ( 0.31 ) $ 1.95 $ 0.94 Weighted-average common shares outstanding: Basic 5,532 5,429 5,504 5,413 Diluted 5,565 5,429 5,552 5,464 See accompanying notes to Condensed Consolidated Financial Statements. Page 2 Table of Contents Mesa Laboratories, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) (in thousands) Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Net income (loss) $ 3,630 $ ( 1,676 ) $ 10,848 $ 5,140 Other comprehensive income (loss): Foreign currency translation adjustments 2,095 ( 6,951 ) 8,638 ( 1,867 ) Comprehensive income (loss) $ 5,725 $ ( 8,627 ) $ 19,486 $ 3,273 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 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 Net income - - 3,630 - 3,630 December 31, 2025 5,524,813 $ 368,555 $ ( 180,727 ) $ ( 1,137 ) $ 186,691 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 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 ) Net (loss) - - ( 1,676 ) - ( 1,676 ) December 31, 2024 5,433,603 $ 352,788 $ ( 180,952 ) $ ( 16,622 ) $ 155,214 *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) Nine Months Ended December 31, 2025 2024 Cash flows from operating activities: Net income $ 10,848 $ 5,140 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property, plant and equipment 3,989 4,028 Amortization of intangible assets 13,532 13,002 Stock-based compensation expense 11,075 10,004 Gain on extinguishment of convertible notes - ( 2,887 ) Amortization of step-up in inventory basis - 1,232 Foreign currency adjustments ( 5,800 ) 2,492 Other 4,140 3,914 Cash from changes in operating assets and liabilities: Accounts receivable, net 921 91 Inventories ( 3,460 ) ( 539 ) Prepaid expenses and other assets ( 1,538 ) 484 Accounts payable ( 873 ) ( 1,919 ) Accrued liabilities and taxes payable ( 3,451 ) ( 50 ) Unearned revenues ( 514 ) ( 849 ) Net cash provided by operating activities 28,869 34,143 Cash flows from investing activities: Purchases of property, plant and equipment ( 2,833 ) ( 3,492 ) Net cash (used in) investing activities ( 2,833 ) ( 3,492 ) 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 ( 22,062 ) ( 26,313 ) GKE acquisition-related holdback payment ( 9,555 ) - Dividends paid ( 2,639 ) ( 2,598 ) Other financing, net ( 1,839 ) ( 1,310 ) Net cash (used in) financing activities ( 26,095 ) ( 28,316 ) Effect of exchange rate changes on cash and cash equivalents 1,713 407 Net increase in cash and cash equivalents 1,654 2,742 Cash and cash equivalents at beginning of period 27,321 28,214 Cash and cash equivalents at end of period $ 28,975 $ 30,956 Supplemental non-cash activity: Right of use assets obtained in exchange for lease liabilities $ 517 $ 9,596 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 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. 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 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. 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. 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 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. 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; 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 ): Improvements to the Measurement of Credit Losses for Receivables and Contract Assets . ASU 2025 - 05 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 - 05 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 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 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 Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 22,357 $ 4,880 $ 658 $ 8,836 $ 36,731 Hardware and software 152 6,277 8,904 2,011 17,344 Services 2,405 3,216 4,510 920 11,051 Total revenues $ 24,914 $ 14,373 $ 14,072 $ 11,767 $ 65,126 Three Months Ended December 31, 2024 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 20,991 $ 4,909 $ 1,043 $ 9,866 $ 36,809 Hardware and software 52 4,534 9,333 1,877 15,796 Services 2,464 2,794 4,053 924 10,235 Total revenues $ 23,507 $ 12,237 $ 14,429 $ 12,667 $ 62,840 Page 7 Table of Contents Nine Months Ended December 31, 2025 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 64,650 $ 13,087 $ 2,251 $ 25,893 $ 105,881 Hardware and software 388 17,227 24,008 4,361 45,984 Services 7,393 9,465 13,733 2,950 33,541 Total revenues $ 72,431 $ 39,779 $ 39,992 $ 33,204 $ 185,406 Nine Months Ended December 31, 2024 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 60,860 $ 12,657 $ 2,067 $ 26,156 $ 101,740 Hardware and software 365 14,539 24,067 6,511 45,482 Services 7,444 8,916 12,358 2,903 31,621 Total revenues $ 68,669 $ 36,112 $ 38,492 $ 35,570 $ 178,843 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 December 31, Nine Months Ended December 31, 2025 2024 2025 2024 United States $ 29,892 $ 30,476 $ 86,838 $ 85,415 China 5,645 6,322 16,389 20,271 Other 29,589 26,042 82,179 73,157 Total revenues $ 65,126 $ 62,840 $ 185,406 $ 178,843 No foreign country exceeded 10% of total revenues for the three and nine months ended December 31, 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 nine months ended December 31, 2025 ( 9,366 ) Contract liabilities added during the nine months ended December 31, 2025, net of revenues recognized 9,132 Contract liabilities as of December 31, 2025 $ 14,569 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 nine months ended December 31, 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 December 31, 2025 . Page 8 Table of Contents Note 4. Supplemental Information Inventories consisted of the following: December 31, 2025 March 31, 2025 Raw materials $ 16,555 $ 14,775 Work in process 723 560 Finished goods 9,281 10,030 Total inventories $ 26,559 $ 25,365 Prepaid expenses and other current assets consisted of the following: December 31, 2025 March 31, 2025 Prepaid expenses $ 3,567 $ 2,364 Deposits 1,495 1,752 Prepaid income taxes 869 1,040 Other current assets 3,934 2,873 Total prepaid expenses and other current assets $ 9,865 $ 8,029 Accrued payroll and benefits consisted of the following: December 31, 2025 March 31, 2025 Bonus payable $ 7,760 $ 10,891 Wages and paid-time-off payable 2,754 3,672 Payroll related taxes 2,303 2,475 Other benefits payable 1,062 820 Total accrued payroll and benefits $ 13,879 $ 17,858 Other accrued expenses consisted of the following: December 31, 2025 March 31, 2025 Accrued business taxes $ 7,150 $ 5,996 Current operating lease liabilities 3,891 3,523 Income taxes payable 2,072 2,157 GKE acquisition holdback - 9,315 Other 2,436 3,610 Total other accrued expenses $ 15,549 $ 24,601 Depreciation expense was as follows: Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Depreciation expense in cost of revenues $ 775 $ 610 $ 2,376 $ 2,376 Depreciation expense in operating expense 495 496 1,613 1,652 Total depreciation expense $ 1,270 $ 1,106 $ 3,989 $ 4,028 Note 5. Goodwill and Intangible Assets Intangible assets other than goodwill consisted of the following: December 31, 2025 March 31, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 199,843 $ ( 131,945 ) $ 67,898 $ 190,069 $ ( 117,189 ) $ 72,880 Other intangibles 63,401 ( 41,653 ) 21,748 61,192 ( 37,197 ) 23,995 Total finite-lived intangible assets $ 263,244 $ ( 173,598 ) $ 89,646 $ 251,261 $ ( 154,386 ) $ 96,875 Page 9 Table of Contents Amortization expense for intangible assets was as follows: Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Amortization in cost of revenues $ 695 $ 660 $ 2,104 $ 1,979 Amortization in general and administrative 3,750 3,731 11,428 11,023 Total $ 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 December 31, 2025: Fiscal Year Amortization Expense Remainder of 2026 $ 4,463 2027 17,546 2028 16,903 2029 16,329 2030 11,538 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 4,661 2,611 75 196 7,543 December 31, 2025 $ 84,069 $ 50,822 $ 37,288 $ 17,124 $ 189,303 Note 6 . Indebtedness Credit Facility Our secured credit agreement matures in April 2029 and 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.” 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). 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. 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 December 31, 2025 , we were in compliance with all covenants under the Credit Facility. Page 10 Table of Contents Term Loan 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. For the fiscal years ending March 31, future debt payments on the Term Loan are required as follows: Fiscal Year Amount Remainder of 2026 $ 938 2027 5,625 2028 5,625 2029 7,500 2030 48,750 Total principal remaining $ 68,438 A reconciliation of the carrying amount of the Term Loan to principal outstanding was as follows: December 31, 2025 March 31, 2025 Current portion $ 5,156 $ 3,750 Noncurrent portion 62,721 66,902 Debt issuance costs 561 598 Term Loan principal outstanding $ 68,438 $ 71,250 We recognized interest expense on the Term Loan as follows: Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Interest expense ( 6.2 % and 7.5 % as of December 31, 2025 and 2024, respectively) $ 1,159 $ 1,450 $ 3,756 $ 4,551 Amortization of debt issuance costs 43 38 118 111 Total interest and amortization of debt issuance costs $ 1,202 $ 1,488 $ 3,874 $ 4,662 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 $ 1,103 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 (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, 2025 2024 2025 2024 Coupon interest expense at 1.375 % $ - $ 335 $ 503 $ 1,037 Amortization of debt issuance costs - 134 203 412 Total interest and amortization of debt issuance costs $ - $ 469 $ 706 $ 1,449 The effective interest rate on the Notes was approximately 1.9 %. The net carrying amount of the Notes was as follows: December 31, 2025 March 31, 2025 Principal outstanding $ - $ 97,500 Unamortized debt issuance costs - ( 203 ) Net carrying value $ - $ 97,297 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 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. Stock-based compensation expense is included in cost of revenues, selling, general and administrative, and research and development expense in the accompanying unaudited Condensed Consolidated Statements of Operations. The following is a summary of RSU and PSU award activity for the nine months ended December 31, 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 ( 11 ) 97.91 - - Awards distributed ( 65 ) 117.08 ( 16 ) 265.32 Nonvested as of December 31, 2025 177 $ 93.65 113 $ 126.12 ( 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 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 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 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 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. Note 8 . 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, 2025 2024 2025 2024 Net income (loss) available for shareholders $ 3,630 $ ( 1,676 ) $ 10,848 $ 5,140 Weighted average outstanding shares of common stock (1) 5,532 5,429 5,504 5,413 Dilutive effect of RSUs 33 - 48 51 Fully diluted shares 5,565 5,429 5,552 5,464 Basic earnings (loss) per share $ 0.66 $ ( 0.31 ) $ 1.97 $ 0.95 Diluted earnings (loss) per share $ 0.65 $ ( 0.31 ) $ 1.95 $ 0.94 ( 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. Page 12 Table of Contents The following potentially dilutive securities were excluded from the calculation of diluted EPS: Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Assumed conversion of the Notes - 344 171 354 Stock awards that were anti-dilutive 228 406 228 202 Total stock awards excluded from diluted EPS 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. Note 9 . Income Taxes We reported an income tax provision as follows: Three Months Ended December 31, Nine Months Ended December 31, 2025 2024 2025 2024 Income tax (benefit) expense $ 966 $ ( 541 ) $ 2,759 $ 360 Effective tax rate 21.0 % 24.4 % 20.3 % 6.5 % 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 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. 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 December 31, 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 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. Note 11 . S egment Information 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. 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 December 31, 2025 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Revenues (a): $ 24,914 $ 14,373 $ 14,072 $ 11,767 $ 65,126 Less Depreciation in cost of revenues 438 88 116 133 775 Amortization in cost of revenues 125 379 - 191 695 Other cost of revenues (b) 7,040 4,986 5,506 4,329 21,861 Total segment cost of revenues 7,603 5,453 5,622 4,653 23,331 Gross Profit (c) $ 17,311 $ 8,920 $ 8,450 $ 7,114 $ 41,795 Reconciling items: Operating expense $ 33,820 Operating income 7,975 Nonoperating expense, net 3,379 Earnings before income taxes $ 4,596 Page 13 Table of Contents Three months ended December 31, 2024 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Revenues (a): $ 23,507 $ 12,237 $ 14,429 $ 12,667 $ 62,840 Less Depreciation in cost of revenues 321 63 207 19 610 Amortization in cost of revenues 131 338 - 191 660 Other cost of revenues (b) 6,594 4,297 5,416 5,509 21,816 Total segment cost of revenues 7,046 4,698 5,623 5,719 23,086 Gross Profit (c) $ 16,461 $ 7,539 $ 8,806 $ 6,948 $ 39,754 Reconciling items: Operating expense $ 33,975 Operating income 5,779 Nonoperating expense, net 7,996 (Loss) before income taxes $ ( 2,217 ) Nine months ended December 31, 2025 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Revenues (a): $ 72,431 $ 39,779 $ 39,992 $ 33,204 $ 185,406 Less Depreciation in cost of revenues 1,349 243 333 451 2,376 Amortization in cost of revenues 404 1,126 - 574 2,104 Other cost of revenues (b) 20,331 15,055 15,932 13,543 64,861 Total segment cost of revenues 22,084 16,424 16,265 14,568 69,341 Gross Profit (c) $ 50,347 $ 23,355 $ 23,727 $ 18,636 $ 116,065 Reconciling items: Operating expense $ 100,302 Operating income 15,763 Nonoperating expense, net 2,156 Earnings before income taxes $ 13,607 Nine months ended December 31, 2024 Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Revenues (a): $ 68,669 $ 36,112 $ 38,492 $ 35,570 $ 178,843 Less Depreciation in cost of revenues 1,114 149 599 514 2,376 Amortization in cost of revenues 376 1,029 - 574 1,979 Non-cash GKE inventory step-up amortization 1,232 - - - 1,232 Other cost of revenues (b) 18,756 12,269 14,635 15,138 60,798 Total segment cost of revenues 21,478 13,447 15,234 16,226 66,385 Gross Profit (c) $ 47,191 $ 22,665 $ 23,258 $ 19,344 $ 112,458 Reconciling items: Operating expense $ 97,591 Operating income 14,867 Nonoperating expense, net 9,367 Earnings before income taxes $ 5,500 (a) 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. (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 GKE inventory step-up amortization expense. (c) Gross profit as presented is 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. December 31, March 31, 2025 2025 Sterilization and Disinfection Control $ 6,075 $ 5,545 Biopharmaceutical Development 5,887 4,934 Calibration Solutions 5,846 5,110 Clinical Genomics 8,751 9,776 Total inventories $ 26,559 $ 25,365 Page 14 Table of Contents