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Item 8. Financial Statements and Supplementary Data

2026-06-03 compared with 2025-05-28 · 447 added, 477 removed, 902 unchanged (51% of the section changed)

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To the Stockholders and the Board of Directors of Mesa Laboratories, Inc.

Opinion on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Mesa Laboratories, Inc.

(and subsidiaries) (the “Company”) as of March 31, 2025, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for the year ended March 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Mesa Laboratories, Inc.

(and subsidiaries) (the “Company”) as of March 31, 2026 and 2025, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of March 31, 2025, and the consolidated results of its operations and its cash flows for the year ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of March 31, 2026 and 2025, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

Basis for Opinion

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting included in Item 9A.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audit.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Management's Annual Report on Internal Control Over Financial Reporting included in Item 9A.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Fair Value of the Reporting Units for Goodwill Impairment Assessment

As described in Note 6 to the consolidated financial statements, the Company’s consolidated goodwill balance was $181.8 million as of March 31, 2025.

The Company performs an annual impairment test for goodwill as of January 1 of each year, or more frequently if facts or circumstances indicate it is more-likely-than not that a reporting unit may be impaired.

The Company first has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than the carrying amount, or to bypass the qualitative assessment and perform a quantitative assessment.

As of January 1, 2025, the Company elected to bypass the qualitative assessment and perform a quantitative assessment where the Company determined the fair value of each reporting unit and compared the fair value to the reporting unit’s carrying amount.

The Company estimates the fair value of each reporting unit based on a combination of an income approach, that utilizes discounted cash flows specific to each reporting unit, and a market approach, that considers guideline public company market multiples.

We identified auditing the Company’s estimates of the fair value of each reporting unit for purposes of its goodwill impairment assessment as a critical audit matter.

The performance of audit procedures related to management's estimates of the fair value of each reporting unit required extensive audit effort, including the use of our valuation specialists with specialized skill and knowledge pertaining to valuation techniques.

Additionally, the evaluation of the audit evidence for the more significant assumptions required especially challenging and subjective auditor judgement.

Critical Audit Matter Description

As described in Notes 1 and 6 to the consolidated financial statements the Company performs an annual impairment test for goodwill as of January 1, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value.

If the Company performs a quantitative assessment, the Company compares the fair value of a reporting unit with its carrying value and recognizes an impairment charge for the amount the carrying value exceeds the reporting unit’s fair value.

During the annual goodwill impairment assessment, management performed a quantitative impairment analysis of the Clinical Genomics reporting unit goodwill and concluded the goodwill was not impaired.

Management estimates the fair value of a reporting unit based on a combination of an income approach, that utilizes discounted cash flows specific to each reporting unit, and a market approach, that considers guideline public company market multiples.

The Company’s consolidated goodwill balance was $186.9 million as of March 31, 2026.

The principal considerations for our determination that performing procedures relating to the goodwill impairment of the Clinical Genomics reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate;

(ii) a high degree of audit effort and especially challenging and subjective auditor judgment in performing and evaluating management’s significant assumptions related to the forecasted results and the discount rate;

and (iii) the audit effort involved the use of valuation professionals with specialized skill and knowledge.

How We Addressed the Matter in Our Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures related to the Company's goodwill impairment assessments included the following, among others:

These procedures included evaluating the design and testing the operating effectiveness of internal controls related to the Company’s goodwill impairment assessment, including those relevant to the determination of the fair value of the reporting unit.

Our audit procedures related to the Company’s goodwill impairment assessment for its Clinical Genomics reporting unit included the following, among others:

Testing the Company’s process used to develop the estimates.

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● Evaluating the significant assumptions used, including the reasonableness of:

management’s forecast of future revenues and gross margins by comparing the future revenue growth rates and gross margins to historical company data and evaluating consistency with external market and industry data.

management’s forecasted results by comparing the future revenue growth rates and cost assumptions to historical company data and evaluating consistency with external market and industry data.

management’s selection of comparable entities.

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● Utilizing our valuation professionals with specialized skill and knowledge to assist in evaluating the methodologies used and the reasonableness of certain significant assumptions.

/s/ Moss Adams LLP

We have served as the Company’s auditor since 2024.

/s/ Baker Tilly LLP

Los Angeles, California

We have served as the Company's auditor since 2024.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Mesa Laboratories, Inc.

(the Company) as of March 31, 2024, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for the year ended March 31, 2024, and the related notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024, and the results of its operations and its cash flows for the year ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows of Mesa Laboratories, Inc.

and subsidiaries (the Company) for the year ended March 31, 2024, and the related notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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June 28, 2024

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Mesa Laboratories, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of operations, comprehensive (loss), stockholders' equity, and cash flows of Mesa Laboratories, Inc.

(the “Company”) for the year ended March 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the results of the Company's operations and its cash flows for the year ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

The Company's management is responsible for these financial statements.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Plante & Moran, PLLC

We served as the Company’s auditor from 1986 to 2023.

Denver, Colorado

Mesa Laboratories, Inc.

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26,373 25,365

Prepaid expenses and other

Prepaid expenses and other current assets

Total current assets

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Accrued payroll and benefits

19,006 17,858

Unearned revenues

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Term loan, noncurrent portion, net of debt issuance costs

61,357 66,902

Revolving line of credit

84,500 10,000

Convertible senior notes, noncurrent portion, net of debt issuance costs

Total liabilities

241,502 273,518

Commitments and Contingencies (Note 13)

Stockholders’ equity

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- ( 2,887 ) -

Other expense (income), net

Other (income) expense, net

( 4,195 ) 1,403 ( 2,124 )

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5,302 7,935 ( 21,402 )

Net (loss) income

Net income (loss)

$ 6,712 $ ( 1,974 ) $ ( 254,246 )

Net (loss) earnings per share

Net earnings (loss) per share

$ 1.22 $ ( 0.36 ) $ ( 47.20 )

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Year Ended March 31,

Net (loss) income

Net income (loss)

$ 6,712 $ ( 1,974 ) $ ( 254,246 )

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5,455,421 $ 358,541 $ ( 188,936 ) $ ( 9,775 ) $ 159,830

Vesting of restricted stock units and exercise of stock options

Vesting of restricted stock units

80,825 - - - -

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Cash flows from operating activities:

Net (loss) income

Net income (loss)

$ 6,712 $ ( 1,974 ) $ ( 254,246 )

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation of property, plant and equipment

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17,868 13,142 11,936

Amortization of step-up in inventory basis

1,232 1,229 -

Non-cash interest expense and debt issuance cost amortization

Gain on extinguishment of convertible senior notes

- ( 2,887 ) -

Non-cash interest expense and debt issuance cost amortization

Amortization of step-up in inventory basis

- 1,232 1,229

Deferred taxes

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Cash from changes in operating assets and liabilities:

Accounts receivable, net

( 2,925 ) 4,940 ( 2,121 )

Accounts receivable

( 3,206 ) ( 2,925 ) 4,940

Prepaid expenses and other assets, pending taxes

( 4,434 ) 1,153 2,563

Prepaid expenses and other assets

Accounts payable

( 1,197 ) ( 388 ) ( 97 )

Accrued liabilities and taxes payable, pending taxes

Accrued liabilities and taxes payable

3,497 9,504 ( 1,236 )

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Cash flows from investing activities:

Purchases of property, plant and equipment

( 3,250 ) ( 4,249 ) ( 2,567 )

Acquisition of customer lists

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- - ( 78,739 )

Purchases of property, plant and equipment

( 4,249 ) ( 2,567 ) ( 4,544 )

Net cash (used in) investing activities

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Cash flows from financing activities:

Proceeds from Credit Facility borrowings

Proceeds from debt borrowings

107,500 73,465 71,000

Repayment of debt

Repurchase of convertible note debt

( 97,500 ) ( 71,560 ) -

Repurchase of convertible senior notes

Other debt principal repayments

( 36,749 ) ( 44,251 ) ( 33,500 )

Dividends paid

GKE acquisition holdback payment

( 9,555 ) - -

Proceeds from the exercise of stock options

Dividends paid

( 3,523 ) ( 3,468 ) ( 3,447 )

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( 1,061 ) ( 887 ) ( 728 )

Proceeds from the exercise of stock options

Other financing, net

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Cash paid for:

$ 5,731 $ 4,591 $ 1,356

$ 11,077 $ 4,648 $ 3,485

Supplemental non-cash activity:

New acquisition-related consideration held back against potential indemnification losses

$ - $ 8,448 $ -

Contingent consideration from new acquisitions

$ - $ - $ 1,190

See accompanying notes to consolidated financial statements.

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(dollar and share amounts in thousands, unless otherwise specified)

Description of Business and Summary of Significant Accounting Policies

Description of Business

Basis of Presentation and Summary of Significant Accounting Policies

Nature of Operations

In this Annual Report on Form 10 -K, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries is collectively referred to as “we,” “us,” “our,” the “Company,” or "Mesa."

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We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world.

We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and Asia Pacific, and by independent distributors in these areas as well as throughout the rest of the world.

We prefer markets in which we can establish a strong presence and achieve high gross profit margins.

We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and APAC, and by independent distributors throughout the world.

As of March 31, 2026 , 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 medical device, pharmaceutical and healthcare industries.

The division also provides testing and laboratory services, mainly to the dental and pharmaceutical industries.

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

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 sterility assurance testing and laboratory services, primarily to dental and pharmaceutical customers.

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 biologic 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, air quality and torque testing.

● 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, gas flow, environmental and process monitoring and torque testing.

Clinical Genomics - develops, manufactures and sells highly sensitive high-throughput genetic analysis instruments, consumables and related services that enable clinical research labs and contract research organizations to perform genomic testing across a broad range of non-diagnostic applications in several therapeutic areas, including hereditary disease screenings, pharmacogenetics, oncology related applications and toxicology research.

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

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Foreign Currency

Exchange rate adjustments resulting from foreign currency transactions are recognized in net (loss) earnings, whereas effects resulting from the translation of financial statements are reflected as a component of accumulated other comprehensive income within stockholders’ equity.

Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than the U.S.

Exchange rate adjustments resulting from foreign currency transactions are recognized in net income (loss), while the effects of translating the financial statements of foreign subsidiaries into U.S.

dollars are reflected as a component of accumulated other comprehensive income within stockholders’ equity.

Assets and liabilities of subsidiaries operating outside the United States with functional currencies other than the U.S.

dollar are translated into U.S.

dollars at period end exchange rates, and revenue and expense accounts are translated at weighted average period rates.

dollars at period end exchange rates, and results of operations are translated using weighted average exchange rates for the period.

Fair Value Measurements

Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants.

Fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants.

We determine fair value based on the following input hierarchy:

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Pricing models, discounted cash flow methodologies, and other similar techniques involving significant management judgment or estimation typically require unobservable inputs.

Most assets and liabilities purchased in business acquisitions are measured, recognized and disclosed at fair value in the Consolidated Financial Statements on a non-recurring basis upon acquisition, or as necessary during the measurement period.

Additionally, assets such as property and equipment, operating lease assets, and goodwill and other intangible assets are measured and presented at fair value on a nonrecurring basis if determined to be impaired.

Additionally, assets such as property and equipment, operating lease assets, and goodwill and other intangible assets are measured and presented at fair value on a nonrecurring basis if impaired.

Such fair value measurements require the use of Level 3 inputs.

Our current liabilities generally approximate their fair values.

“Fair Value Measurements” for further information.

Revenue Recognition

Our revenues come from product sales, which include consumables and hardware, and services, which include discrete and ongoing maintenance, calibration, and testing services.

Revenues are recognized when or as we satisfy our performance obligations under the terms of a contract, which occurs when control of the promised products or services transfers to a customer.

We recognize the amount of consideration we expect to receive in exchange for transferring products or services to our customers (the transaction price) as revenue.

For our revenue contracts, prices are fixed at the time of purchase and no price protections or variables are typically offered.

The significant majority of our revenues and related receivables are generated from contracts with customers that are 12 months or less in duration.

We generally recognize revenues as follows:

Our revenues are derived from sales of products and services.

Product sales consist primarily of consumables and hardware, while services consist primarily of maintenance, calibration and testing services.

Revenues are recognized when or as we satisfy our performance obligations under the terms of a contract, which occurs when control of the promised products or services transfers to the customer.

We recognize revenue in an amount that reflects the consideration we expect to receive in exchange for those products and services (the transaction price).

For our revenue contracts, prices are fixed at the time of purchase, and price protections or other forms of variable consideration are not typically offered.

Product sales:

Our performance obligations related to product sales generally consist of the promise to sell tangible goods to distributors or end users.

Control of these goods is typically transferred upon shipment, at which time our obligation to the customer is satisfied and revenue is recognized.

We generate service revenues from discrete and ongoing maintenance, calibration, and testing services performed with respect to our physical products.

Our performance obligations related to product sales generally consist of the promise to sell tangible goods to distributors or end customers.

Revenues from consumables and hardware are recognized at the point in time when control transfers to the customer.

Control of products sold in the United States and APAC typically transfers upon shipment, whereas control of products sold in Europe more typically transfers upon delivery to the customer site or when customers collect the good from our warehouse.

We generate service revenues from discrete and ongoing maintenance, calibration and testing services related to our physical products.

For discrete services, our obligation to complete specified work is satisfied and revenue is recognized upon performance of the service.

Obligations arising from ongoing service contracts in which we promise to stand ready to provide maintenance or other services on an as-needed basis for a certain period of time are satisfied by completing any services that are contractually required during the contract period, if requested by the customer, or simply by the passage of time if no services are requested.

For ongoing service contracts, revenue is recognized on a straight-line basis over the life of the contract in a faithful depiction of our obligation to provide services over the contract period.

Obligations arising from ongoing service contracts, in which we promise to stand ready to provide maintenance or other services on an as-needed basis over a specified contract period, are satisfied by completing any services that are contractually required during the contract period, if requested by the customer, or by the passage of time if no services are requested.

For ongoing service contracts, revenue is recognized on a straight-line basis over the contract term in a faithful depiction of our obligation to provide services over the contract period.

Purchase orders or formal contracts typically provide evidence of the existence and key terms of arrangements with customers with respect to sales of our products and services.

Collectability is reasonably assured through our customer review process, and payment is typically due within 60 days or less.

We expense commission costs (typically our only significant incremental cost to obtain a contract) as incurred.

The substantial majority of our contracts have original durations of one year or less, and we have elected not to disclose the expected timing or allocated transaction prices of future performance obligations such as obligations to perform maintenance and repair services.

Additionally, we have elected to not assess whether a significant financing component exists when the period between when we fulfill our performance obligation and when the customer remits payment is one year or less.

Collectability is assessed through our customer review process and is considered reasonably assured.

Payment terms typically require settlement within 60 days or less.

We expense commission costs, which are typically our only significant incremental cost to obtain a contract, as incurred.

The substantial majority of our contracts have original durations of one year or less, and we have elected not to disclose the expected timing or allocated transaction prices of remaining performance obligations.

Additionally, we have elected to not assess whether a significant financing component exists when the period between satisfaction of a performance obligation and customer payment is one year or less.

None of our contracts contained significant financing components as of or for the fiscal years ended March 31, 2026 , 2025 or 2024.

Contracts with customers may contain multiple obligations.

For such arrangements, the transaction price is allocated to each obligation based on the estimated relative standalone selling prices of the promised products or services underlying each obligation.

Standalone selling prices are the price at which the product or service would be sold separately.

If the standalone selling price is not observable through past transactions, we estimate the standalone selling price considering available information such as market conditions and internally approved pricing guidelines.

In limited circumstances, for obligations with highly variable or unobservable standalone selling prices, we may assign standalone prices to obligations based on the residual transaction price after all observable standalone selling prices have been determined.

Contracts with customers may contain multiple performance obligations.

In such arrangements, the contract transaction price is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised products or services.

Standalone selling prices represent the price at which a product or service would be sold separately.

If a standalone selling price is not directly observable, we estimate the standalone selling price using available information, including market conditions and internally approved pricing guidelines.

In limited circumstances, for performance obligations with highly variable or unobservable standalone selling prices, we may assign standalone prices to obligations based on the residual transaction price after all observable standalone selling prices have been determined.

Discounts may be approved at the time of purchase and are included within a contract’s fixed transaction price.

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All expected and actual consideration from customers is included in the transaction price.

“Revenue” for further information.

Shipping and Handling

Payments made by customers to us for shipping and handling costs are included in revenues in our Consolidated Statements of Operations, and our expenses are included in cost of revenues.

Payments we receive from customers for shipping and handling are included in revenues in our Consolidated Statements of Operations, and the related shipping and handling expenses are included in cost of revenues.

We account for shipping and handling costs arising from contracts with customers as fulfillment costs.

Shipping and handling for inventory and materials we purchase is included as a component of inventory on the Consolidated Balance Sheets, and is expensed to cost of revenues when products are sold.

Shipping and handling costs associated with inventory and materials we purchase are capitalized as a component of inventory on the Consolidated Balance Sheets and are expensed to cost of revenues when the related products are sold.

Unearned Revenues

Certain of our products may be sold with associated service contracts whereby we must provide repairs, technical support, parts, and various analytical or maintenance services over a period of time.

In the event these contracts are paid in advance by the customer, the associated amounts are recorded as unearned revenue liabilities and are recognized to revenue ratably over the term of the service period, generally one year.

Prepayments from customers with respect to other products and services are likewise recorded as unearned revenue liabilities and are recognized to revenue when earned.

Certain of our products may be sold with associated service contracts that require us to provide repairs, technical support, parts, and various analytical or maintenance services over a specified period of time, generally one year.

When these contracts are paid in advance, the contract consideration is recorded as an unearned revenue liability and is recognized as revenue ratably over the service period.

Customer prepayments related to other products and services are also recorded as unearned revenue liabilities and are recognized as revenue when earned.

Accrued Warranty Expense

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Accounts Receivable and Allowance for Credit Losses

All trade accounts receivable are reported at net realizable value on the accompanying Consolidated Balance Sheets, adjusted for any write-offs and net of allowances for credit losses.

Allowances for credit losses represent our best estimate and current expectation of future credit losses from trade accounts receivable.

We estimate credit losses based on historical information, current and expected future economic and market conditions, and reviews of the current status of customers’ trade accounts receivable.

In circumstances in which we become aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the recognized receivable to the amount reasonably expected to be collected.

To mitigate credit risk, we consider the creditworthiness of new and existing customers, establish credit limits, and regularly review outstanding balances and payment histories.

We may require pre-payments from customers under certain circumstances and may limit future purchases until payments are made on past due amounts.

We do not believe our trade accounts receivable represent significant concentrations of credit risk due to our diversified portfolio of individual customers and geographical areas.

Differences may arise between estimated and actual losses, which could materially affect the provision for credit losses and, therefore, net (loss) earnings.

Trade accounts receivable are reported at net realizable value on the accompanying Consolidated Balance Sheets, adjusted for allowances for credit losses and write-offs.

Allowances for credit losses represent our best estimate of expected credit losses from trade accounts receivable.

We estimate expected credit losses based on historical experience, current and expected economic and market conditions, and evaluations of the status of our customers’ outstanding receivable balances.

When we become aware that a specific customer may be unable to meet its financial obligations, we record a specific allowance to reduce the carrying amount of the receivable to the amount reasonably expected to be collected.

To mitigate credit risk, we assess the creditworthiness of new and existing customers, establish credit limits, and regularly review outstanding balances and payment histories.

In certain circumstances, we may require customer prepayments or limit future purchases until past due amounts are settled.

We do not believe our trade accounts receivable represent significant concentrations of credit risk due to our diversified customer base and geographic presence.

Actual credit losses may differ from estimated amounts, which could materially affect the provision for credit losses and, therefore, net income (loss).

We recorded $ 1,495 , $ 218 , and $ 790 of expense associated with credit losses for the years ended March 31, 2026 , 2025 , and 2024 , respectively.

Cash Equivalents

We classify any highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents;

We classify highly liquid investments with original maturities of three months or less at the date of purchase as cash equivalents.

No cash equivalents are included on our Consolidated Balance Sheets as of March 31, 2026 or 2025 .

Inventories are stated at the lower of cost or net realizable value.

Inventory is recorded to cost of products upon sale using a weighted average costing methodology.

Inventories purchased as part of a business combination are recorded at fair value.

Our work-in-process and finished goods inventories include the costs of raw materials, labor and overhead, which are estimated based on trailing twelve months of expense and standard labor hours for each product.

We evaluate labor and overhead costs annually unless specific circumstances necessitate a mid-year evaluation for specific items.

We monitor inventory costs relative to selling prices and perform physical cycle count procedures on inventories throughout the year to determine if a lower of cost or net realizable value reserve is necessary.

We estimate and maintain an inventory reserve as needed for such matters as excess or obsolete inventory, shrinkage and scrap.

This reserve may fluctuate as our assumptions change due to new information, discrete events, or changes in our business such as entering new markets or discontinuing a specific product;

however, once inventory is written down, a new cost basis is established that is not subsequently written back up in future fiscal years.

Inventories are expensed to cost of revenues upon sale to customers using a weighted-average costing methodology.

Inventories acquired in business combinations are recorded at acquisition date fair value.

Our work-in-process and finished goods inventories include the costs of raw materials, labor and overhead.

Labor and overhead costs involve estimates based on historical and budgeted costs, expected inflation, expected labor costs and expected standard productivity rates as inputs.

The rates are evaluated annually unless specific circumstances require a more frequent review for particular items.

We monitor inventory costs relative to selling prices and perform physical cycle counts throughout the year to assess whether a lower of cost or net realizable value adjustment is necessary.

We estimate and maintain inventory reserves for excess or obsolete inventory, shrinkage and scrap.

These reserves may fluctuate as assumptions change due to new information, discrete events, or changes in our business, such as entering new markets or discontinuing specific products.

Once inventory is written down, the reduced amount becomes the new cost basis and is not subsequently increased in future fiscal years.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, less accumulated depreciation, except for assets acquired in business acquisitions, which are recorded at fair value.

Expenditures for major renewals and improvements that extend the life of the asset are capitalized, while expenditures for minor replacements, maintenance and repairs are expensed as incurred.

Property, plant and equipment are recorded at cost, net of accumulated depreciation, except for assets acquired in business acquisitions, which are recorded at acquisition-date fair value.

Expenditures for major enhancements and improvements that extend the life of assets are capitalized, while expenditures for minor replacements, maintenance and repairs are expensed as incurred.

Depreciation is calculated using the straight-line method over our assets’ estimated useful lives.

Upon asset retirement or disposal, accounts are relieved of cost and accumulated depreciation, and any related gain or loss is reflected in our results of operations.

In some cases, particularly with respect to business consolidation or closure activities, impairment losses or accelerated depreciation may be recorded to reflect revised remaining useful lives of assets designated to be abandoned in the future.

At least annually, we evaluate and adjust as necessary the estimated useful lives of property, plant and equipment.

Upon asset retirement or disposal, the related gross carrying amount and accumulated depreciation are derecognized, and any related gain or loss is recognized in our results of operations.

In certain circumstances, including business consolidation or facility closure activities, impairment losses or accelerated depreciation may be recorded to reflect revised estimates of remaining useful lives for assets designated to be retired from service.

We periodically evaluate and adjust as necessary the estimated useful lives of property, plant and equipment.

Any changes in estimated useful lives are recorded prospectively.

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Land is not depreciated.

Construction in progress is not depreciated until placed in service, at which time it is assigned a useful life consistent with the nature of the asset.

We determine whether contractual arrangements contain a lease at the inception of the arrangement.

If a lease is identified, we determine whether the lease should be classified as a finance or operating lease;

we did not have any finance leases during any fiscal years presented herein.

Our operating leases have remaining terms of between three months and eleven years as of March 31, 2025 .

A contract is a lease or contains one when ( 1 ) the contract contains an explicitly or implicitly identified asset and ( 2 ) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract in exchange for consideration.

We have elected to account for non-lease components of our lease contracts together with the lease components to which they relate for our operating leases.

Operating lease right-of-use ("ROU") assets and lease liabilities are recognized at the lease commencement date.

We do not capitalize assets or liabilities for leases with original durations of less than 12 months, and our short-term leases are not material.

Operating lease liabilities represent the present value of fixed lease payments not yet paid.

ROU assets represent our right to use an underlying asset and are based upon the related operating lease liability, adjusted for prepayments made prior to commencement, any initial direct costs incurred, and other applicable items.

Adjustments to ROU assets would also be made for prepaid variable lease payments or impairment losses, if necessary.

When readily determinable, the discount rate used to calculate the lease liability is the rate implicit in the lease, otherwise we use our incremental borrowing rate based on the information available at lease commencement.

When we acquire a business, we generally retain the acquiree's classification of its leases, and we evaluate ROU assets and liabilities in accordance with ASC 842.

Our leases typically contain rent escalations over the lease term.

We recognize expense for these leases on a straight-line basis over the lease term.

Construction in progress is not depreciated until placed in service, at which time it is assigned a useful life consistent with the applicable asset category.

We determine whether an arrangement is or contains a lease at contract inception.

If a lease is identified, we classify the lease as either a finance or operating lease.

We did not have any finance leases during any fiscal year presented herein.

As of March 31, 2026 , our operating leases have remaining terms ranging from one month to 11 years.

A lease exists when a contract conveys the right to control the use of, and obtain substantially all the economic benefits from, use of an identified asset for a period of time in exchange for consideration.

For our operating leases, we have elected to account for non-lease components together with the lease components to which they relate.

Operating lease right-of-use ("ROU") assets and lease liabilities are recognized at lease commencement.

We do not recognize ROU assets or lease liabilities for leases with original durations of less than 12 months, and our short-term leases are not material.

Operating lease liabilities represent the present value of capitalized lease payments not yet paid, discounted using the rate implicit in the lease when readily determinable or, otherwise, our incremental borrowing rate based on information available at lease commencement.

ROU assets represent our right to use the underlying leased asset and are measured based on the related operating lease liability, adjusted for payments made prior to commencement, any initial direct costs incurred, and other such items as applicable.

Adjustments to ROU assets would also be made for impairment losses, if necessary.

In connection with business acquisitions, we generally retain the acquiree's classification of leases, and recognize ROU assets and liabilities in accordance with ASC 842.

Several of our leases contain fixed rent escalations over the lease term, which are recognized as lease expense on a straight-line basis over the lease term.

Lease expense is recorded in cost of revenues or selling, general and administrative, or research and development expense in our Consolidated Statements of Operations, depending on the nature of use of the underlying asset.

Many of our leases include one or more renewal or termination options exercisable at our discretion, which are included in the initial determination of the lease term if we are reasonably certain to exercise the option.

Certain leases include one or more renewal or termination options exercisable at our discretion.

Renewal periods are included in the lease term when we are reasonably certain to exercise the option.

Renewal terms typically allow us to extend lease terms between one and three years.

We have also entered into lease agreements that have variable payments related to certain indexes, and other variable payments based on, for example, a pro-rata portion of actual maintenance costs incurred by the lessor.

Variable lease payments are recognized in the period in which those payments are incurred as lease costs.

We also have leases that include variable payments based on, for example, a pro-rata portion of actual maintenance costs incurred by the lessor.

Such variable lease payments are recognized in the period in which those payments are incurred as lease costs.

“Leases” for further information.

Intangible Assets, Impairment Testing

Our goodwill and other intangible assets result from acquisitions of businesses.

Intangible assets affect the amount of future amortization expense and possible impairment losses we may incur.

We amortize intangible assets with finite lives (generally ranging from three to fifteen years), using the straight-line method over the asset's useful life.

We determine the useful lives of finite intangible assets based on the specific facts and circumstances related to each asset, and we evaluate the appropriateness of assigned useful lives at least annually.

Our goodwill and other intangible assets result primarily from business acquisitions.

Intangible assets with finite lives affect future amortization expense.

We could incur impairment losses associated with goodwill and other intangible assets.

We amortize finite-lived intangible assets, which generally have estimated useful lives ranging from three to fifteen years at the time of acquisition, using the straight-line method over their estimated useful lives.

We estimate useful lives based on the specific facts and circumstances related to each asset, and we evaluate the appropriateness of assigned useful lives at least annually.

Changes to remaining useful lives, if necessary, are accounted for prospectively.

Factors we consider when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, our long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and economic factors such as competition or specific market conditions.

In determining useful lives, we consider factors such as contractual terms, historical performance, our long-term strategy for using the asset, applicable legal or regulatory constraints, and economic factors such as competition or specific market conditions.

Amortization expense is recorded within cost of revenues or general and administrative expense in the Consolidated Statements of Operations.

Impairment assessments related to finite-lived intangibles are conducted if events or conditions indicate that the carrying value of an asset or asset group may not be recoverable.

Events or conditions indicating potential impairment include but are not limited to changes in the competitive landscape, changes in the extent or manner in which we intend to use the assets, any internal decisions to pursue new or different technology strategies, losses of significant customers, or significant changes in business performance or in the markets and industries we serve, including adverse changes in the prices paid for our products or changes in the size of the markets for our products, or changes in the regulatory or macroeconomic environment that are likely to materially impact our future cash flows.

If impairment indicators are present, we determine whether the carrying value of the underlying intangible asset or asset group is recoverable through analyses of undiscounted estimated future cash flows.

If the asset or asset group is not found to be recoverable, we estimate the asset's fair value using Level 3 inputs and discounted cash flow models, and we recognize impairment losses as necessary.

Goodwill is not subject to amortization.

We test goodwill for impairment as of January 1st each year, or more frequently if events and circumstances indicate it is more likely than not that the fair value of a given goodwill reporting unit is less than its carrying value.

Events that could indicate impairment and that would trigger interim impairment testing include but are not limited to:

adverse current or expected economic, market, or industry-specific conditions, including a sustained decline in our market capitalization;

sustained adverse changes or expected changes in business climate or in the operational performance of the business;

adverse changes in legal factors;

and adverse actions or assessments by a regulator.

We monitor for indications of impairment throughout the year and perform qualitative and quantitative impairment tests as necessary based on quarterly assessments of our performance.

Our annual impairment tests may begin with a qualitative assessment, and further quantitative assessments are performed i) if we determine it is more likely than not that the fair value of a reporting unit is less than the carrying amount, ii) at least every five years, or iii) if we otherwise elect to perform quantitative tests, as we did in fiscal year 2025.

The fair value measurements used in testing intangible assets for impairment are typically based on discounted cash flow projection and market multiple models, using Level 3 inputs.

Finite-lived intangibles are assessed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable.

Events or conditions indicating potential impairment include, but are not limited to, adverse changes in business or market conditions, changes in the extent or manner in which the assets are used, internal strategic decisions, loss of significant customers, declines in business performance, adverse regulatory changes, or other events that could materially impact future cash flows.

If impairment indicators are present, we assess recoverability by comparing the carrying value of the asset or asset group to the undiscounted estimated future cash flows expected to be generated from use of the asset or asset group.

If the carrying value is not recoverable, we estimate fair value using discounted cash flow models and other valuation techniques utilizing Level 3 inputs.

We recognize impairment losses for the excess of carrying value over estimated fair value as necessary.

Goodwill is not amortized.

We test goodwill for impairment at least annually as of January 1st, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a goodwill reporting unit is less than its carrying value.

Events that could indicate impairment and that could trigger interim impairment testing include, but are not limited to, adverse current or expected economic, market, or industry-specific conditions;

sustained declines in our market capitalization;

sustained adverse changes or expected changes in business climate or in the operating performance of the business;

adverse legal or regulatory actions;

or other factors that could adversely affect the fair value of a reporting unit.

We monitor for indicators of impairment throughout the year.

Our annual impairment tests may begin with a qualitative assessment, and quantitative testing is performed i) if we determine it is more likely than not that the fair value of a reporting unit is less than the carrying amount, ii) at least every five years, or iii) if we otherwise elect to perform quantitative assessments.

The fair value measurements used in testing goodwill and other intangible assets for impairment are estimated using a combination of income and market approaches, using Level 3 inputs.

See “Fair Value Measurements” for a description of input levels.

Significant assumptions include, among others, discount rates, forecasted results including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, cost inputs, terminal growth rates, cash flows, customer attrition rates (for customer relationships), royalty rates and technology obsolescence rates (for patents and other intellectual property), the identification of comparable public entities, and applied market multiples.

Significant assumptions include, among others, discount rates, forecasted results including EBITDA, revenue growth rates, cost assumptions, terminal growth rates, customer attrition rates (for customer relationships), royalty rates and technology obsolescence rates (for patents, tradenames and other intellectual property), the selection of comparable public entities, and applied market multiples.

In certain cases, management uses other market information when available to estimate fair value.

Impairment losses are recognized through earnings and represent excess carrying value over estimated fair value.

We do not believe our goodwill and other intangible assets were impaired as of March 31, 2025.

We recorded impairment losses of $ 156,892 and $ 117,641 related to goodwill and long-lived intangible assets, respectively, during our prior fiscal year.

Impairment losses, when recognized, represent the excess of the carrying amount over estimated fair value and are recorded in earnings.

Based on qualitative and quantitative testing performed as of January 1, 2026, we do not believe our goodwill or other intangible assets were impaired as of March 31, 2026.

During fiscal year 2024, we recorded impairment losses of $ 156,892 and $ 117,641 related to goodwill and long-lived intangible assets, respectively .

See Footnote 6.

“Goodwill and Intangibles” for further information.

Research & Development Costs

We conduct research and development activities for the purpose of developing new products and enhancing the functionality, effectiveness, reliability, and accuracy of existing products.

We conduct research and development activities for the purpose of enhancing the functionality, effectiveness, reliability and accuracy of existing products and to develop new products.

Research and development costs are expensed as incurred.

Research and development expense is predominantly comprised of labor and third -party consultant costs, as well as materials for projects, but we may from time to time purchase in-process research and development with the intention of developing a saleable product.

Convertible Debt

Our convertible 1.375 % Convertible Senior Notes due 2025 (the "Notes") do not have material embedded derivatives and are recorded as current liabilities in our Consolidated Balance Sheets as of March 31, 2025 as they will mature within one year of March 31, 2025.

We may settle the Notes in shares of common stock or in cash.

We apply the if-converted method to calculate the potentially dilutive impact of the Notes on net (loss) earnings per share.

Debt issuance costs are amortized through interest expense to bring the carrying value of the Notes to face using the effective interest method over the life of the indenture governing the Notes.

Research and development expense is predominantly comprised of labor, third -party consultant costs, and project-related materials.

From time to time, we may acquire in-process research and development with the intention of developing a saleable product.

Stock-based Compensation

We issue shares in the form of full-value awards, and in the past we have issued stock options (collectively, "stock awards"), as part of employee and non-employee director compensation pursuant the Amended and Restated Mesa Laboratories, Inc.

2021 Equity Incentive Plan (the "2021 Equity Plan").

Some shares are fully vested and remain outstanding under our Mesa Laboratories, Inc.

2014 Equity Plan (the "2014 Equity Plan").

The Equity Plans are administered by the Compensation Committee of the Board of Directors, which has the authority to grant equity awards, or to delegate its authority under the plan to make grants (subject to certain legal and regulatory restrictions), including the authority to determine the individuals to whom awards will be granted, the type and timing of awards to be granted, the number of shares to be covered by each award, vesting schedules and all other terms and conditions of the awards.

For purposes of counting the shares remaining under the 2021 Equity Plan, each share underlying a full value award or stock option counts as one share used.

We issue stock‑based awards in the form of full‑value awards and, in prior periods, stock options (collectively, “stock awards”) to employees and non‑employee directors pursuant to the Amended and Restated Mesa Laboratories, Inc.

2021 Equity Incentive Plan (the

“2021 Equity Plan”).

The 2021 Equity Plan is administered by the Compensation Committee of the Board of Directors, which has the authority to grant equity awards, or to delegate its authority under the plan to make grants (subject to certain legal and regulatory restrictions), including the authority to determine award recipients, the type and timing of awards to be granted, the number of shares underlying each award, vesting schedules and all other terms and conditions of the awards.

Under the 2021 Equity Plan, each share underlying a full value time-based award or stock option counts as one share against shares available for issuance.

Performance-based awards count against shares available for issuance based on the maximum number of shares achievable under the award agreement unless or until a lower quantity is finalized.

We issue new shares of common stock upon the vesting of time-based restricted stock units ("RSUs") and performance-based RSUs ("PSUs"), and upon exercise of stock options.

Time-based stock awards and stock options generally vest in equal installments on the first,

third anniversaries of the grant date, and stock options generally expire after

Awards granted to non-employee directors generally vest

one year from the grant date.

We recognize stock-based compensation expense based on the fair value of stock awards at grant date and recognize the expense over the related service period using a straight-line vesting expense schedule.

2021 Equity Plan includes retiree provisions which result in the acceleration of stock-based compensation for expense for retiree-eligible participants.

Compensation expense related to employees eligible to retire at grant date or during the award term is recognized on a straight-line basis between the grant date and the date of retirement eligibility, and the applicable retirees retain full rights to the awards upon retirement as per the plan provisions.

Expense for PSUs is recognized, net of estimated forfeitures, using a straight-line vesting schedule when it is probable that performance goals will be achieved.

Performance goals are determined by the Board of Directors and may include measures such as revenues growth and profitability targets.

A portion of the PSUs include a total shareholder return "TSR" market condition, which compares Mesa's share price to a peer group over a three year period.

The TSR is applied to applicable PSU grants as either a stand alone performance measure or as a modifier that adjusts the quantity of shares earned for company performance up or down by a maximum of 20%.

Compensation expense on stock awards subject to market or performance conditions is recognized over the longer of the performance goal attainment period or time-vesting period.

At each reporting period, we estimate the number of PSUs expected to vest based on our current estimate of probable achievement compared to the target metrics in the award documents, and if necessary, a cumulative-effect adjustment is recorded.

The grant date fair value of the PSUs with market conditions is determined using the Monte Carlo simulation valuation model which uses Level

The fair value of RSUs and performance-based RSUs without a market condition are based on the closing price of Mesa's common stock on the award date, less the present value of expected dividends

RSUs and stock options generally vest in equal installments on the first, second, and third anniversaries of the grant date.

Stock options generally expire after six years.

PSUs vest upon achievement of specified performance conditions and completion of a requisite service period, generally three years.

Awards granted to non‑employee directors generally vest one year from the grant date.

Stock‑based compensation expense is measured based on the grant‑date fair value of the award and is recognized over the longer of any requisite service or performance period using a straight‑line method, net of estimated forfeitures.

We estimate expected forfeitures using a dynamic forfeiture model based on company-specific historical data.

The 2021 Equity Plan includes retiree provisions which result in the acceleration of stock-based compensation expense.

For retirement-eligible participants, compensation expense is recognized on a straight-line basis from the grant date through the date the participant becomes retirement-eligible, at which time the participant retains full rights to the awards in accordance with plan provisions.

We record stock-based compensation expense in cost of revenues, selling, research and development, and general and administrative expense in the Consolidated Statements of Operations.

Certain PSUs include a total shareholder return ("TSR") market condition, which compares Mesa's share price to a peer group, generally over a three -year period.

Achievement under the plan affects the number of awards that will vest.

The TSR condition may function either as a standalone performance metric or as a modifier that adjusts the quantity of shares earned for company performance up or down by a maximum of 20%.

The grant‑date fair value of these awards incorporates the effect of the market condition and is estimated using a Monte Carlo simulation valuation model utilizing Level 3 inputs.

Compensation expense for TSR awards is not subsequently adjusted for changes in estimated performance outcomes, provided requisite service is rendered.

The fair values of RSUs and PSUs other than those that include a TSR condition are based on the closing price of Mesa's common stock on the award date, less the present value of expected dividends

not received during the vesting period.

RSUs we issue are equivalent to nonvested shares under applicable accounting guidance.

The fair value of granted stock options is estimated on the grant date using the Black-Scholes option pricing model.

The assumptions used to calculate the fair value of granted options reflect market conditions and our historical experience.

The expected life of options represents the estimated period of time until exercise and is based on historical experience of similar awards for similar subsets of our employee population, giving consideration to the contractual terms, vesting schedules, and expectations of future employee behavior.

Expected stock price volatility is based on the historical volatility of our own stock price over the period of time commensurate with the expected life of the award.

The risk-free rate is based on the United States Treasury yield curve in effect at the time of grant nearest to the estimated life of the stock option.

The dividend yield assumption is based on our anticipated cash dividend payouts.

To date, we have identified

no instances in which an adjustment to our observable market price would be required compared to the closing price of Mesa's common stock on the award date as an input to our fair value calculations.

RSUs and PSUs we issue are equivalent to nonvested shares under applicable accounting guidance.

Expense for PSUs with non-TSR performance conditions, such as cumulative revenues growth or profitability targets determined by the Board of Directors, is adjusted at each reporting period.

At each reporting date, we estimate the number of non-TSR PSUs expected to vest based on our current estimate of the probable achievement of applicable performance targets specified in the award documents, and if necessary, we record a cumulative-effect adjustment.

Stock options, when granted, are valued using the Black-Scholes option pricing model.

No stock options were awarded in fiscal year

We estimate expected forfeitures using a dynamic forfeiture model based on company specific historical data when determining the amount of stock-based compensation costs to recognize each period.

We allocate stock-based compensation expense to cost of revenues, selling, research and development, and general and administrative expense in the Consolidated Statements of

2026 or fiscal year

“Stock Transactions and Stock-Based Compensation” for further information.

Income tax expense includes U.S., state, local and international income taxes.

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In determining our income tax provision for financial reporting purposes, we establish allowances for uncertain tax income positions unless we determine it is not more likely than not that such positions would be sustained upon examination, based on their technical merits.

That is, for financial reporting purposes, we only recognize tax benefits taken on the tax return that we believe are more likely than not of being sustained.

There is considerable judgment involved in determining whether positions taken on the tax return are more likely than not of being sustained.

That is, for financial reporting purposes, we only recognize tax benefits taken on the tax return that we believe are more likely than not to be sustained.

There is considerable judgment involved in determining whether positions taken on the tax return are more likely than not to be sustained.

We adjust our tax reserve estimates periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations.

The consolidated income tax provision of any given year includes adjustments to prior year income tax accruals that are considered appropriate and any related estimated interest.

The consolidated income tax provision in any given year includes adjustments to prior year income tax accruals that are considered appropriate and any related estimated interest.

Our policy is to recognize, when applicable, interest and penalties on uncertain income tax positions as part of general administrative expense.

(See Note 12.

“Income Taxes”).

Net (Loss) Earnings Per Share

Basic net (loss) earnings per share (“EPS”) is computed by dividing net (loss) income by the weighted-average number of common shares outstanding during the reporting period.

Diluted (loss) earnings per share (“diluted EPS”) is computed similarly to basic EPS, except it includes the effects of potential dilution that could occur if dilutive securities vested, were exercised, or were converted.

Potentially dilutive securities include stock options, RSUs and PSUs, as well as common shares underlying the Notes.

“Income Taxes” for further information.

Net Earnings (Loss) Per Share

Basic net earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period.

Diluted earnings (loss) per share (“diluted EPS”) is computed similarly to basic EPS, except it includes the effects of potential dilution that could occur if dilutive securities vested, were exercised, or were converted.

Potentially dilutive securities in fiscal year 2026 include unvested RSUs and PSUs and outstanding stock options.

In prior fiscal years, common shares underlying the Notes were also potentially dilutive.

Potentially dilutive securities are excluded from the calculation of diluted EPS in the event they are subject to performance conditions that have not yet been achieved as of the reporting date or if they would otherwise be antidilutive.

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in such cases the inclusion of the potential common shares would have an antidilutive effect.

“Net (Loss) Earnings per Share” for EPS calculations for the years ended March 31, 2025, 2024 and 2023 .

Acquisition Related Contingent Liabilit ies

Acquisition related contingent liabilities consist of estimated amounts due under various acquisition agreements and may be based on revenues growth, specified profitability growth metrics, or the attainment of milestones such as patent approvals.

At each reporting period, we evaluate the expected probability and timing of future payments, and we adjust the contingent consideration to fair value through earnings in the Consolidated Statements of Operations.

“Commitments and Contingencies” for information regarding existing contingent consideration liabilities as of March 31, 2025 .

In addition to contingent consideration liabilities, we may hold back a portion of the purchase price related to acquisitions as security against potential indemnification losses.

Such holdbacks relate to circumstances that existed as of the date of acquisition, and as such they are not considered contingencies;

however, amounts ultimately paid may differ from the estimates management makes upon acquisition, depending upon whether pre-acquisition liabilities are identified during the holdback period.

“Net Earnings (Loss) per Share” for EPS calculations for the years ended March 31, 2026, 2025 and 2024 .

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.

Legal Contingencies

We are party to various claims and legal proceedings that arise in the normal course of business.

We record an accrual for legal contingencies when we determine it is probable we have incurred a liability and can reasonably estimate the amount of the loss (See Note 13.

“Commitments and Contingencies”).

We record an accrual for legal contingencies when we determine it is probable we have incurred a liability and can reasonably estimate the amount of the loss.

“Commitments and Contingencies” for further information.

Purchase Accounting for Acquisitions

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The excess of the purchase price over the fair value of identifiable acquired assets less liabilities is recognized as goodwill.

We determine fair value using widely accepted valuation techniques, primarily discounted cash flow and market multiple analyses, which rely heavily on Level 3 inputs.

These types of analyses require us to make and monitor assumptions and estimates regarding industry and economic factors, the profitability of future business strategies, discount rates and cash flows.

For all material acquisitions, we engage external valuation specialists to aid management in preparing our fair value models.

Certain adjustments to the assessed fair values of acquired assets or liabilities made subsequent to the acquisition date, but within the measurement period, are recorded as adjustments to goodwill.

We determine fair value using widely accepted income and market valuation techniques, which rely heavily on Level 3 inputs.

These types of analyses require us to make assumptions and estimates regarding industry and economic factors, the profitability of future business strategies, discount rates and cash flows.

For all material acquisitions, we engage external valuation specialists to aid management in preparing fair value models.

Certain adjustments to the assessed fair values of acquired assets or liabilities made subsequent to the acquisition date, but within a measurement period not to exceed one year, are recorded as adjustments to goodwill.

Any adjustments subsequent to the measurement period are recorded within earnings.

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If actual results are not consistent with our assumptions and estimates, or if our assumptions and estimates change due to new information, we may be exposed to losses.

We did not acquire any businesses in fiscal year 2025.

For the years ended March 31, 2024 and 2023, we acquired businesses for total net purchase prices of $ 87,187 and $ 6,140 , respectively.

We did not acquire any businesses in fiscal year 2026 or 2025 .

In the year ended March 31, 2024, we acquired businesses for total net purchase prices of $ 87,187 .

“Significant Transactions” for further information.

Risks and Uncertainties

The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods.

These estimates represent management's judgment about the outcome of future events.

It is not possible to accurately predict the future impact of such events and circumstances.

However, we have reviewed the estimates used in preparing the financial statements and have identified the following factors that have a reasonable possibility of being materially affected in the near term:

● Estimates regarding future financial performance and other inputs into fair value estimates related to impairment tests for goodwill and intangible assets that could result in additional future impairment losses.

In particular, potential risks posed by escalating trade tensions and tariffs could materially impact our performance and impairment conclusions in future periods.

These estimates are based on management’s judgment regarding future events and circumstances, the outcomes of which are inherently uncertain.

Actual results may differ from those estimates.

We have evaluated the estimates used in preparing the consolidated financial statements and identified the following areas for which there is a reasonable possibility that estimates could be materially affected in the near term:

● Estimates regarding the recoverability of deferred tax assets and estimates regarding cash needs and associated indefinite reinvestment assertions.

Estimates of the net realizable value of inventory.

We do not believe that there are any significant risks that have not already been disclosed in the Consolidated Financial Statements.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform with current year presentation.

Estimates regarding future financial performance and other assumptions used in fair value measurements for goodwill and intangible asset impairment testing, which could result in future impairment losses.

Estimates of the net realizable value of inventory and accounts receivable.

We do not believe that there are any significant risks that have not already been disclosed in the accompanying Consolidated Financial Statements.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2023 - 07, "Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures." ASU No.

2023 - 07 is intended to provide financial statement users with more information about reportable segments, including more disaggregated expense information.

We adopted ASU 2023 - 07 effective for our annual fiscal year 2025 reporting period, on a retrospective basis.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and disclosures and is reflected in Note 14.

“Segment Data.”

For the year ended March 31, 2026, we adopted Accounting Standards Update (“ASU”) 2023‑09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures .

This ASU requires public business entities to provide enhanced disclosures related to the reconciliation of the effective tax rate to the statutory federal, state, and foreign income tax rates, including disaggregation of individual reconciling items when their impact exceeds specified quantitative thresholds.

The ASU also requires disaggregated disclosure of income taxes paid (net of refunds received) by federal, state, and foreign jurisdictions, and further disaggregation for specific jurisdictions when amounts exceed defined thresholds.

In addition, certain reconciling items must be disaggregated based on their nature, determined by reference to the item’s fundamental characteristics, including the underlying transaction or event that gave rise to the reconciling item and the activity with which it is associated.

ASU 2023‑09 eliminates the previous requirement to disclose information about unrecognized tax benefits that have a reasonable possibility of significantly increasing or decreasing within the 12 months following the reporting date.

We adopted ASU 2023 - 09 on a prospective basis, which resulted in the new disclosure requirements presented in Note 12, Income Taxes .

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023 - 09, "Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures." ASU No.

2023 - 09, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.

The guidance is effective for public business entities for annual periods 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 statement.

In November 2024, the FASB issued Accounting Standards Update ("ASU") No.

2024 - 03, "Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses." ASU No.

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.

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 statement disclosures.

We intend to adopt the standard on a prospective basis and are currently assessing the effect the adoption will have on our consolidated financial statement disclosures.

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

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

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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 service contracts.

Services result in revenues recognized over time, for example, when we are obligated to perform labor and replace parts on an as-needed basis over a contractually specified period, or at a point in time, upon completion of a specific, discrete service.

In some cases, our service contracts contain both revenues recognized over time and revenues recognized at a point in time.

We evaluate our revenues internally based on business division and the nature of goods and services provided.

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 from contracts with customers for the years ended March 31, 2026, 2025 and 2024 :

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Sterilization and Disinfection Control (1)

Clinical Genomics

Biopharmaceutical Development

Calibration Solutions

Clinical Genomics

$ 90,521 $ 16,869 $ 2,737 $ 35,815 $ 145,942

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$ 101,567 $ 48,626 $ 53,551 $ 45,386 $ 249,130

( 1 ) Revenues of $ 24,815 from GKE are included in the Sterilization and Disinfection Control division during the year ended March 31, 2025.

Year Ended March 31, 2025

Sterilization and Disinfection Control (1)

Clinical Genomics

Biopharmaceutical Development

Calibration Solutions

Clinical Genomics

$ 82,736 $ 17,287 $ 3,039 $ 35,672 $ 138,734

4 unchanged sentences

$ 93,418 $ 48,730 $ 51,749 $ 47,081 $ 240,978

( 1 ) Revenues of $ 9,289 from GKE are included in the Sterilization and Disinfection Control division during the year ended March 31, 2024 and represent sales made beginning from the acquisition date.

Year Ended March 31, 2024

Sterilization and Disinfection Control (1)

Clinical Genomics

Biopharmaceutical Development

Calibration Solutions

Clinical Genomics

$ 65,459 $ 17,086 $ 2,345 $ 36,086 $ 120,976

4 unchanged sentences

$ 75,124 $ 40,712 $ 47,763 $ 52,588 $ 216,187

( 1 ) Revenues of $ 9,289 from GKE are included in the Sterilization and Disinfection Control division during the year ended March 31, 2024 and represent sales of consumables made beginning from the acquisition date.

Contract Balances

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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.

Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sale s.

No customers accounted for more than 10% of total trade receivables as of March 31, 2026 .

On April 5, 2024, we entered into separate, privately negotiated purchase agreements with a limited number of holders of our 1.375 % convertible senior notes due August 15, 2025 ( the "Notes"), through which we repurchased $ 75,000 in aggregate principal amount of the Notes.

The carrying amounts of our Credit Facility on the Consolidated Balance Sheets approximate fair value due to the variable interest rate pricing on the debt, with the principal balances bearing an interest rate approximating current market rates.

On August 15, 2025, our outstanding 1.375 % convertible notes matured.

No balances remained outstanding related to the Notes as of March 31, 2026.

"Indebtedness" for further information.

As of March 31, 2025 , we had remaining outstanding $ 97,500 aggregate principal amount of the Notes.

We estimate the fair value of the Notes using Level 2 inputs based on the last actively traded price or observable market input preceding the end of the reporting period.

The fair value of the Notes is approximately correlated to our stock price.

March 31, 2025

While outstanding, we estimated the fair value of the Notes using Level 2 inputs based on the last actively traded price or observable market input preceding the end of the reporting period.

The fair value of the Notes was approximately correlated to our stock price.

March 31, 2025

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Fair Value (Level 2)

Carrying Value

Fair Value (Level 2)

$ 97,297 $ 95,063

The carrying amounts of our term loan and revolving line of credit (together, the "Credit Facility") on the Consolidated Balance Sheets approximate fair value due to the variable interest rate pricing on the debt, with the principal balances bearing an interest rate approximating current market rates.

At March 31, 2025 exchange rates, the estimated fair value of consideration held back from the purchase price of the GKE acquisition was approximately $ 9,300 .

The liability is reflected within other accrued expenses in our Consolidated Balance Sheets as of March 31, 2025.

We adjusted the liability to estimated fair value through earnings throughout fiscal year 2025, which required the use of Level 3 inputs, including discount rate estimates.

In April 2025, we paid $ 9,555 to the GKE sellers to settle the liability in full at the euro spot rate as of the payment date.

The Belyntic acquisition in fiscal year 2023 obligated us to pay contingent consideration of up to $ 1,500 cash upon regulatory approval of certain patent applications.

We estimate the fair value of the remaining contingent consideration using Level 3 inputs and a probability-weighted outcome analysis based on our expectations of patent approval leveraging our historical experience and expert input, and we adjust the estimated fair value at each reporting period through earnings.

The fair value of the remaining contingent consideration was $ 731 as of March 31, 2025 , which is recorded in Other Accrued Expenses on the accompanying Consolidated Balance Sheets.

There were no transfers between the levels of the fair value hierarchy during the fiscal years ended March 31, 2025 and 2024 .

There were no nonrecurring fair value adjustments or transfers between the levels of the fair value hierarchy during the fiscal years ended March 31, 2026 and 2025 .

Significant Transactions

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We acquired 100 % of the outstanding shares of GKE GmbH and SAL GmbH effective October 16, 2023, and effective December 31, 2023, we acquired 100 % of the outstanding shares of Beijing GKE Science & Technology Co.

GKE develops, manufactures and sells a portfolio of chemical sterilization indicators, biologics, and process challenge devices to protect patient safety across global healthcare markets.

GKE is included in our Sterilization and Disinfection Control ("SDC") division, and GKE's strengths in chemical indicators are complementary to SDC's strengths in biological indicators as chemical and biological indicators are used in the same sterility validation workflows.

Additionally, GKE’s healthcare-focused commercial capabilities in Europe and Asia greatly expand our reach in the healthcare markets in those geographies.

We are working to obtain regulatory 510 (k) clearance on certain GKE products for sale in the United States, which would further expand organic revenues growth opportunities from the GKE business.

GKE develops, manufactures and sells a portfolio of chemical sterilization indicators, biologics and process challenge devices to support sterility validation and protect patient safety across global healthcare markets.

GKE is included in our Sterilization and Disinfection Control ("SDC") division.

GKE's strengths in chemical indicators complement SDC's portfolio of biological indicators, as chemical and biological indicators may be used in the same sterility validation workflows.

Additionally, GKE’s healthcare-focused commercial capabilities in Europe and APAC expand our reach in those markets.

We finalized our purchase price accounting of GKE during fiscal year 2024 .

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We funded the acquisition through a combination of cash on hand and a total of $ 71,000 borrowed under our line of credit.

During the fiscal years ended March 31, 2025 and 2024, respectively, GKE's operations contributed the following amounts to our consolidated results of operations:

Year ended March 31,

$ 24,815 $ 9,289

Amortization of inventory step-up recorded in cost of revenues

Amortization of acquired intangibles recorded in cost of revenues

Amortization of acquired intangibles recorded in general and administrative expense

GKE net income includes certain intercompany management fees and other items.

During fiscal year 2026, we paid the GKE sellers $ 9,555 to settle an acquisition-related holdback.

GKE's operations contributed $ 9,289 to revenues and $ 1,046 of net income (including $ 2,271 of non-cash amortization expense related to acquired intangible assets and $ 1,229 of non-cash inventory step up expense) to our consolidated results during the twelve months ended March 31, 2024.

Supplemental unaudited pro-forma information

Combined revenues from Mesa and GKE for fiscal years 2024 and 2023 would have been approximately $ 229,260 and $ 241,360 , respectively, had the GKE acquisition occurred on April 1, 2022, at the beginning of our fiscal year 2023.

Combined revenues from Mesa and GKE for fiscal year 2024 would have been approximately $ 229,260 had the GKE acquisition occurred at the beginning of the earliest period presented, on April 1, 2023.

It is impracticable for us to disclose pro-forma net earnings information regarding the combined results of the operations of Mesa and GKE as if the acquisition had occurred at an earlier date.

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Other noncurrent liabilities

13,662 12,380

The components of lease costs, the weighted average remaining lease term and the weighted average discount rate were as follows:

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Sterilization and Disinfection Control

Clinical Genomics

Biopharmaceutical Development

Calibration Solutions

Clinical Genomics

March 31, 2024

2 unchanged sentences

( 22 ) 1,696 2 ( 12 ) 1,664

Impairment losses

- ( 118,741 ) ( 38,151 ) - ( 156,892 )

Goodwill related to GKE acquisition

48,850 - - - 48,850

Measurement period adjustment, Belyntic acquisition

- - 841 - 841

March 31, 2025

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Finite-Lived Intangible Assets

Intangible assets other than goodwill were as follows:

Intangible assets other than goodwill consisted of the following:

March 31, 2026

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$ 248,500 $ ( 165,153 ) $ 83,347 $ 251,261 $ ( 154,386 ) $ 96,875

Amortization expense for finite-lived intangible assets was as follows:

Amortization expense for intangible assets was as follows:

Year Ended March 31,

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$ 18,017 $ 19,145 $ 27,341

Fiscal year 2024 goodwill impairment losses recorded in our Clinical Genomics and Biopharmaceutical Development divisions totaling $ 156,892 and impairments of other intangible assets in our Clinical Genomics division totaling $ 117,641 were primarily the result of higher weighted average cost of capital, which decreases the fair value of businesses, as well as downward revisions of expected future performance in fiscal year 2024.

The range of useful lives and weighted-average remaining useful lives of amortizable intangible assets as of March 31, 2026 were as follows:

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Other Intangibles

The following is estimated amortization expense for the years ending March 31:

Estimated future amortization expense for the fiscal years ending March 31 is presented below, based on foreign currency exchange rates in effect as of March 31, 2026 :

Amortization Expense

During fiscal year 2024, we recorded goodwill impairment losses totaling $ 156,892 , consisting of $ 118,741 in our Clinical Genomics division and $ 38,151 in our Biopharmaceutical Development division.

In addition, we recorded impairments of other intangible assets in our Clinical Genomics division totaling $ 117,641 .

These impairment losses were primarily driven by increases in the weighted average cost of capital, which reduced the estimated fair value of the related businesses, as well as downward revisions to expected future financial performance during fiscal year 2024.

Supplemental Information

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March 31, 2025

GKE acquisition holdback (current)

Accrued business taxes

$ 6,950 $ 5,996

Current operating lease liabilities

Income taxes payable

GKE acquisition holdback

Total other accrued expenses

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Credit Facility

On March 5, 2021, we entered into a senior secured credit agreement that included 1 ) a revolving credit facility in an aggregate principal amount of up to $ 75,000 (the "Revolver"), 2 ) a swingline loan in an aggregate principal amount not exceeding $ 5,000 , and 3 ) letters of credit in an aggregate stated amount not exceeding $ 2,500 at any time.

The agreement also provided for an incremental term loan or an increase in revolving commitments in an aggregate principal amount of at a minimum $ 25,000 and at a maximum $ 75,000 , subject to the satisfaction of certain conditions and lender considerations.

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"),

A term loan with a maximum principal amount of $ 75,000 , which is subject to escalating quarterly principal payments (the "Term Loan"),

A swingline loan with an aggregate principal amount not exceeding $ 5,000 , and,

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 October 5, 2023, we amended the terms of the Credit Facility to increase the maximum principal amount available to us under the Revolver from $ 75,000 to $ 125,000 .

On April 5, 2024, we further amended and restated the terms of the Credit Facility to:

Extend the maturity of the Credit Facility to April 2029;

Allow proceeds from the Credit Facility to be used to redeem some or all of the Company’s Notes;

Include a $75,000 senior secured term loan facility (the “Term Loan”), which is subject to principal amortization payments;

Make certain changes to the financial covenants.

In conjunction with the amendment and restatement of the Credit Facility during the year ended March 31, 2025, we incurred $ 1,987 of customary lender fees and debt issuance costs paid to third parties, of which $ 1,242 relates to the Revolver and $ 745 relates to the Term Loan.

The balance of unamortized fees and debt issuance costs related to the Credit Facility, including fees from the original debt issuance and all subsequent amendments and restatements, was $ 1,203 and $ 321 as of March 31, 2025 and 2024 , respectively.

Unamortized debt issuance costs related to the Term Loan are reflected in the debt’s carrying value as a discount in our Consolidated Balance Sheets.

All such fees are being amortized to interest expense through maturity.

Amounts borrowed under the Credit Facility bear interest at either a base rate or a SOFR rate plus an applicable spread ranging from 1.5 % to 3.5 %, depending on our total net leverage ratio.

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 as of March 31, 2026 was 5.9 %.

The financial covenants in the Credit Facility as amended include a maximum leverage ratio of 4.50 to 1.00 on each of the quarterly testing dates through December 31, 2024;

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 and a maximum senior net leverage ratio of 3.5 to 1.

The financial covenants in the Credit Facility include a maximum leverage ratio of 4.00 to 1.00 on each of the quarterly 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 March 31, 2026, we were in compliance with all required covenants under the terms of the Credit Facility.

We borrowed $ 75,000 under the Term Loan on April 5, 2024, to fund privately negotiated repurchases of a portion of the Notes (see "Convertible Notes" below).

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

During the year ended March 31, 2025, we made required quarterly principal payments on the Term Loan of $ 3,750 .

During the year ended March 31, 2026, we made required principal payments on the Term Loan of $ 3,750 .

For the fiscal years ending March 31, required future principal debt payments on the Term Loan are as follows:

Total outstanding principal

Total principal remaining

Unamortized debt issuance costs related to the Term Loan are reflected as a discount to the debt’s carrying value in our Consolidated Balance Sheets and are being amortized to interest expense through maturity.

The net carrying amount of the Term Loan was as follows:

March 31,2026

Term Loan ( 7.2 % as of March 31, 2025)

discount and debt issuance costs

March 31, 2025

Term Loan ( 5.9 % and 7.2 % as of March 31, 2026 and 2025, respectively)

$ 67,500 $ 71,250

debt issuance costs

( 518 ) ( 598 )

current portion

( 5,625 ) ( 3,750 )

Noncurrent portion

There was no outstanding balance related to the Term Loan as of March 31, 2024.

$ 61,357 $ 66,902

As of March 31, 2026 , the outstanding balance under our Revolver was $ 84,500 , and $ 40,500 was available for borrowing.

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We incurred unused commitment fees of $ 157 and $ 269 for the years ended March 31, 2026 , and March 31, 2025 , respectively.

The balance of unamortized customary lender fees related to the Revolver was $ 1,018 and $ 1,203 as of March 31, 2026 and 2025, respectively.

The lender fees are being amortized to interest expense through maturity.

Convertible Notes

On August 12, 2019, we issued an aggregate principal amount of $ 172,500 of Notes.

The net proceeds from the Notes, after deducting underwriting discounts and commissions and other related offering expenses payable by us, were approximately $ 167,056 .

The Notes mature on August 15, 2025, unless earlier repurchased or converted, and bear interest at a rate of 1.375 % payable semi-annually in arrears on February 15 and August 15 each year beginning on February 15, 2020.

The Notes are initially convertible at a conversion rate of 3.5273 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $ 283.50 per share of common stock.

On April 5, 2024, we entered into separate, privately negotiated transactions with certain holders of the Notes to repurchase $ 75,000 aggregate principal amount of the Notes for an aggregate repurchase price of $ 71,250 in cash, plus accrued and unpaid interest of $ 160 and fees paid to third parties of $ 310 directly related to the extinguishment.

We accounted for the partial repurchase of the Notes as a debt extinguishment, which resulted in the recognition of a gain on extinguishment of $ 2,887 in other income on the Consolidated Statements of Operations during the year ended March 31, 2025 .

As of March 31, 2025, $ 97,500 in aggregate principal amount of the Notes remained outstanding, which we intend to pay using a combination of cash on hand and a draw on our Revolver.

Noteholders may convert their Notes at their option only in the following circumstances:

(i) during any calendar quarter commencing after the calendar quarter ended on December 31, 2019 ( and only during such calendar quarter), if the last reported sale price per share of our common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(ii) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day;

(iii) upon the occurrence of certain corporate events or distributions on our common stock, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the Notes) or a transaction resulting in the Company’s common stock converting into other securities or property or assets;

(iv) at any time from, and including, April 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock.

The circumstances necessary for conversion were not met during fiscal year 2025.

The if-converted value of the Notes did not exceed the principal balance as of March 31, 2025 .

Debt issuance costs related to the Notes remaining after the partial repurchase in fiscal year 2025 are comprised of commissions payable to the initial purchasers of $ 2,925 and third party offering costs of $ 152 .

The debt issuance costs are being amortized to interest expense using the effective interest method over the remaining contractual term of the Notes.

The net carrying amount of the 2025 was as follows:

March 31, 2025

On August 12, 2019, we issued an aggregate principal amount of $ 172,500 of Notes bearing interest at a rate of 1.375 %.

Debt issuance costs related to the Notes, consisting of $ 2,925 of commissions payable to the initial purchasers and $ 152 of third -party offering costs, were recorded as a reduction to the carrying amount of the Notes and amortized to interest expense over the life of the Notes.

During fiscal year 2025, we repurchased $ 75,000 principal amount of the Notes in privately negotiated transactions, which resulted in the recognition of a gain on extinguishment of $ 2,887 recorded in other income for the year ended March 31, 2025.

The Notes matured on August 15, 2025.

Upon maturity, we settled the remaining 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.

The historical net carrying amount of the Notes was as follows:

March 31, 2025

Principal outstanding

$ 97,500 $ 172,500

Unamortized debt issuance costs

( 203 ) ( 1,302 )

Net carrying value

$ 97,297 $ 171,198

We recognized interest expense on the Notes as follows:

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Amortization of debt issuance costs

Total interest on the Notes

$ 706 $ 1,918 $ 3,298

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

As of March 31, 2025 , the Notes, net of unamortized debt issuance costs, are classified as a current liability on our Consolidated Balance Sheets.

Stock Transactions and Stock-Based Compensation

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Stock-Based Compensation

We issue shares in the form of stock options, RSUs and PSUs to employees and non-employee directors pursuant to the 2021 Equity Plan, and we have awards outstanding under the 2014 Equity Plan.

The 2021 Equity Plan, as amended, authorizes the issuance of 660 shares of common stock to eligible participants, and there were 186 shares available for future grants under the plan as of March 31, 2025 .

Under the 2014 Equity Plan, 1,100 shares of common stock were authorized and reserved for eligible participants, all of which have been issued and 43 of which remain outstanding as of March 31, 2025 .

On August 22, 2025, our shareholders approved an amendment to the 2021 Equity Plan that increased the number of shares authorized for issuance from 660 shares to 1,156 shares, an increase of 496 shares.

There were 537 shares available for future grants under the 2021 Equity Plan as of March 31, 2026 .

Stock-based compensation expense recognized in the Consolidated Financial Statements was as follows:

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$ 17,868 $ 13,142 $ 11,936

Amount of income tax (benefit) recognized in earnings

Amount of income tax expense recognized in earnings

2,616 2,068 2,718

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Weighted- Average Grant Date Fair Value per Share

Weighted- Average Remaining Contractual Life (Years)

Aggregate Intrinsic Value

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Awards granted

Awards forfeited

( 11 ) 120.39

Awards forfeited or expired

Awards distributed

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165 $ 93.13 $ 14,558

For the years ended March 31, 2024 and 2023, the weighted average fair values per RSU granted were $ 133.30 and $ 187.21 , respectively.

For the years ended March 31, 2025 and 2024, the weighted average fair values per RSU granted was $ 94.30 and $ 133.30 , respectively.

Unrecognized stock-based compensation expense for RSUs that we have determined are probable of vesting was $ 6,749 as of March 31, 2026 and is expected to be recognized over a weighted average period of 1.9 years.

The total fair value of RSUs vested was $ 6,173 , $ 5,881 , and $ 6,751 during the years ended March 31, 2025, 2024 and 2023 , respectively.

The total intrinsic value of time-based RSUs distributed during the years ended March 31, 2024 and March 31, 2023 was $ 3,658 and $ 5,004 , respectively.

The following table summarizes RSU valuation information:

Year Ended March 31,

Fair value of awards vested

$ 7,575 $ 6,173 $ 5,881

Intrinsic value of awards vested

$ 5,808 $ 3,928 $ 3,658

Weighted average fair value of awards granted, per share

$ 90.91 $ 94.30 $ 133.30

Performance-Based Restricted Stock Units (PSUs)

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Weighted- Average Grant Date Fair Value per Share

Weighted- Average Remaining Contractual Life (Years)

Aggregate Intrinsic Value

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Awards granted

Awards forfeited

Performance adjustment (1)

Awards forfeited or expired

Awards distributed

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101 $ 128.47 $ 8,970

( 1 ) During fiscal year 2026, the performance period for the market-based portion of PSUs granted in fiscal 2024 concluded.

Based on actual performance during the performance period, 13 of these PSUs are expected to vest, net of estimated forfeitures.

For the years ended March 31, 2025 and 2024 , the average fair value per PSU granted was $ 102.57 and $ 132.29 , respectively.

Unrecognized stock-based compensation expense for PSUs that we have determined probable of vesting was $ 2,200 as of March 31, 2026 and is expected to be recognized over a weighted average period of 1.8 years.

Total fair value of PSUs vested was $ 3,492 , $ 0 and $ 1,926 during the years ended March 31, 2025, 2024 and 2023 , respectively.

There were no PSUs vested or distributed during the fiscal year 2024, and the total intrinsic value of PSUs distributed during the year ended March 31, 2023 was $ 1,776 .

The total fair value of PSUs vested was $ 4,289 and $ 3,492 during the years ended March 31, 2026 and 2025, respectively.

There were no PSUs vested or distributed during the fiscal year 2024.

During the year ended March 31, 2026 , the Compensation Committee of the Board of Directors created a plan to award 44 PSUs at target (“the FY26 PSUs”) to eligible employees.

Of the 41 PSUs granted, 23 PSUs have a grant date fair value of $ 89.82 and are subject to service and company financial performance conditions.

The financial performance measurement period is from April 1, 2024 through March 31, 2027.

The remaining 18 PSUs have a grant date fair value of $ 119.54 and are subject to service and market conditions, with the market performance period measured from June 18, 2024 through June 18, 2027.

The service period for all of the FY25 PSUs is from June 18, 2024 through June 18, 2027.

The quantity of shares that will be earned based upon either company financial performance or market performance will range from 0 % to 200 % of the targeted number of shares; if the defined minimum targets are not met, no shares will vest.

As of March 31, 2025, based on actual performance during the partial performance period, a performance adjustment to change the awards expected to vest was not deemed necessary for the FY25 PSUs.

In October 2021, the Compensation Committee of the Board of Directors granted a special long-term equity award consisting of performance stock units subject to both performance and service conditions to our Chief Executive Officer.

Based on actual achievement of the performance metrics as of the performance period ended March 31, 2024, 35 shares are expected to vest and be distributed, of which 12 were distributed in fiscal year 2025.

The remaining 23 shares will vest in equal installments on each of October 27, 2025 and October 27, 2026.

The FY26 PSUs are subject to market-based performance conditions measured relative to a selected peer index 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.

Based on actual achievement of the performance metrics as of the performance period ended March 31, 2024, 23 shares were distributed in fiscal years 2026 and 2025.

The remaining 12 shares will vest on October 27, 2026.

The unamortized expense associated with the remaining awards was recorded in full in fiscal year 2026 in conjunction with our former CEO’s departure.

Stock Options

We used the Black-Scholes option-pricing model to estimate the fair value of stock option awards granted.

There were no options granted during the year ended March 31, 2025.

The weighted average assumptions utilized in the model in prior years were as follows:

Year Ended March 31,

Weighted-average value at grant date

$ 130.07 $ 185.60

Expected life (years)

Expected dividend yield

0.07 % 0.07 %

37.82 % 37.29 %

Risk-free interest rate

4.16 % 3.55 %

Using the assumptions in the tables above, the weighted-average Black-Scholes fair value per share at grant date for the years ended March 31, 2024 and 2023 were $ 42.76 and $ 58.94 , respectively.

The fair values are before the estimated effect of forfeitures, which reduces the amount of expense recorded in our Consolidated Statements of Operations.

Stock option activity under the 2021 Equity Plan and 2014 Equity Plan as of March 31, 2025 , and changes for the years then ended, are presented below (shares and dollars in thousands, except per-share data):

During the years ended March 31, 2026 and 2025 there were no options granted.

We used the Black-Scholes option-pricing model to estimate the fair value of stock option awards granted in the year ended March 31, 2024.

Our weighted‑average assumptions included an expected life of 3.52 years, expected volatility of 37.8 %, a risk‑free interest rate of 4.16 %, and an expected dividend yield of 0.07 %.

The weighted‑average Black-Scholes grant date fair value per option granted in fiscal 2024 was $ 42.76 .

Stock option activity was as follows (shares and dollars in thousands, except per-share data):

Stock Options

9 unchanged sentences

Awards exercised or distributed

( 22 ) 123.17 24

Outstanding as of March 31, 2026

4 unchanged sentences

131 $ 191.35 1.7 $ -

The total intrinsic value of stock options exercised during the years ended March 31, 2024 and March 31, 2023 was $ 24 , and $ 6,902 , respectively.

The total intrinsic value of stock options exercised was $ 24 during each of the years ended March 31, 2025 and 2024.

Unrecognized stock-based compensation expense for stock options expected to vest as of March 31, 2026 was $ 104 and is expected to be recognized over a weighted average period of 0.5 years.

The total fair value of options vested was $ 2,168 , $ 2,749 , and $ 2,763 during the years ended March 31, 2025, 2024 and 2023 , respectively.

The total fair value of options vested was zero , $ 2,168 , and $ 2,749 during the years ended March 31, 2026, 2025 and 2024 , respectively.

Repurchases and Treasury Stock

In November 2005, our Board of Directors approved a program to repurchase up to 300 shares of our outstanding common stock.

5 unchanged sentences

The price paid for repurchased shares is allocated between common stock and retained earnings based on management’s estimate of the original sales price of the underlying shares.

Net (Loss) Earnings Per Share

CEO Transition and Retention Awards

On March 9, 2026, we announced the departure of our former CEO.

As a result, we recognized approximately $ 3,700 of incremental stock‑based compensation expense in March 2026, consisting of accelerated recognition of previously unrecognized expense for awards that were no longer subject to service conditions, partially offset by forfeitures.

In connection with the CEO departure, we granted retention RSUs to certain key executives during fiscal year 2026.

These awards are subject to service conditions and will vest in equal installments on the first, second and third anniversaries of the grant date.

The effects of our former CEO's departure and the retention awards are reflected in the tables above.

Subsequent to our fiscal year end, we awarded our new CEO a sign-on equity award consisting of 35 RSUs.

The total grant-date fair value of the award was approximately $ 3,000 .

The award is subject to service conditions and will vest evenly on the first, second and third anniversaries of the grant date.

Net Earnings (Loss) Per Share

(dollars and shares in thousands, except per share values)

1 unchanged sentence

Year Ended March 31,

Net (loss) earnings available for shareholders

Net earnings (loss) available for shareholders

$ 6,712 $ ( 1,974 ) $ ( 254,246 )

5 unchanged sentences

5,565 5,421 5,386

Basic (loss) earnings per share

Basic earnings (loss) per share

$ 1.22 $ ( 0.36 ) $ ( 47.20 )

Diluted (loss) earnings per share

Diluted earnings (loss) per share

$ 1.21 $ ( 0.36 ) $ ( 47.20 )

The following stock awards were excluded from the calculation of diluted EPS as their inclusion would be anti-dilutive:

( 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 unvested RSUs granted to retirement-eligible employees and certain awards granted to our former CEO that are not subject to continued service or other performance requirements.

The following contingently issuable stock awards were excluded from the calculation of diluted EPS as their inclusion would be anti-dilutive:

Year Ended March 31,

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Total stock awards excluded from diluted EPS

Shares underlying the Notes were excluded from the diluted EPS calculation for the years ended March 31, 2025, 2024 and 2023 as the impact of the assumed conversion of the Notes calculated under the if-converted method was anti-dilutive.

Stock awards are potentially dilutive securities and as such 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 years ended March 31, 2026, 2025 and 2024 as the impact of the assumed conversion of the Notes calculated under the if-converted method was anti-dilutive in each period.

Employee Benefit Plan s

6 unchanged sentences

Provision for Income Taxes

Earnings (loss) before income taxes were as follows:

Earnings (loss) before income taxes was as follows:

Year Ended March 31,

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$ 5,302 $ 7,935 $ ( 21,402 )

A reconciliation of our income tax provision and the amounts computed by applying statutory rates to earnings (loss) before income taxes was as follows (percentages may not perfectly sum due to rounding):

The reconciliation of the U.S.

federal statutory rate of 21 % to the effective income tax rate for the year ended March 31, 2026, following the adoption of ASU 2023 - 09 is as follows:

Year Ended March 31,

Earnings Before Income Taxes

Federal Statutory Tax Rate

State and Local Income Taxes, Net of Federal Income Tax Effect (1)

Foreign Tax Effects:

Federal statutory rate difference

( 492 ) ( 4.1 % )

Surcharge/trade tax charge

Deferred tax rate change

( 304 ) ( 2.5 % )

Changes in valuation allowance

( 171 ) ( 1.4 % )

Other foreign jurisdictions

Effect of Changes in Tax Laws or Rates Enacted in the Current Period

Effect of Cross-Border Tax Laws:

Subpart F Income

Changes in valuation allowance

( 2,259 ) ( 18.8 % )

( 580 ) ( 4.8 % )

Nontaxable or Nondeductible Items:

Compensation adjustments

Changes in Unrecognized Tax Benefits

Other Adjustments:

Deferred charges on intercompany profit

Effective Tax Rate

$ 5,302 44.1 %

( 1 ) State income taxes in Montana, Maryland and Minnesota comprised the majority (greater than 50% ) of the tax effect in this category.

The reconciliation of the U.S.

federal statutory rate of 21 % to the effective income tax rate for the years ended March 31, 2025 and 2024, prior to the adoption of ASU 2023 - 09 is as follows:

Year Ended March 31,

Earnings (loss) before income taxes

25 unchanged sentences

133.12 % 7.76 %

Cash Paid for Income Taxes

We made income tax payments, net of refunds received, during the year ended March 31, 2026 as follows:

Year ended March 31, 2026

States, Other

Income taxes paid, net of amounts refunded

For fiscal year 2026, Montana, Germany, France and China cash taxes paid equaled or exceeded 5% of total income taxes paid.

No other jurisdiction comprised 5% or more of total income taxes paid.

Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Components of our deferred tax assets (liabilities) were as follows:

Significant components of our deferred tax assets (liabilities) were as follows:

Deferred tax assets:

1 unchanged sentence

$ 4,041 $ 8,148

Income tax credits

Allowances and reserves

1 unchanged sentence

Operating lease liabilities

Net operating loss

Deferred tax assets, gross

Net operating loss carryforwards

Other temporary differences

Net deferred tax assets, gross

19,171 21,738

1 unchanged sentence

( 6,408 ) ( 8,999 )

Deferred tax assets, net

Net deferred tax assets, net

12,763 12,739

6 unchanged sentences

( 2,268 ) ( 2,273 )

Other temporary differences

( 1,753 ) ( 579 )

1 unchanged sentence

( 31,347 ) ( 31,549 )

Deferred tax asset/(liabilities)

Net deferred tax assets/(liabilities)

( 18,584 ) ( 18,810 )

8 unchanged sentences

$ 8,999 $ 5,975

Additions charged to income tax expense and other accounts

Deductions from reserves

(Reductions) Additions charged to income tax expense and other accounts

( 2,648 ) 3,657

Deductions from reserves

Cumulative translation adjustment

13 unchanged sentences

As of March 31, 2026 , we had U.S.

and Foreign NOL carryforwards consisting of the following:

March 31, 2024 Expiration Date

Pre-2018 federal NOL carryforwards

Post-2018 federal NOL carryforwards

State NOL carryforwards

8,709 March 31, 2035

Foreign NOL carryforwards

22,595 Indefinite

As of March 31, 2025 , we had U.S.

tax credit carryforwards consisting of the following:

6 unchanged sentences

15 March 31, 2037

As of March 31, 2024, we had U.S.

tax credit carryforwards consisting of the following:

March 31, 2024 Expiration Date

Federal research tax credit carryforwards

State research tax credits carryforwards

3,181 March 31, 2036

Federal foreign tax credit carryforwards

15 March 31, 2037

Undistributed earnings in foreign subsidiaries

For the year ended March 31, 2025 , provisions have not been made for income taxes on $ 59,873 of undistributed earnings that were deemed permanently reinvested in foreign subsidiaries at March 31, 2025 .

For the year ended March 31, 2026 , provisions have not been made for income taxes on undistributed earnings that were deemed permanently reinvested in foreign subsidiaries at March 31, 2026 .

Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, depends on certain circumstances existing if and when remittance occurs.

1 unchanged sentence

Uncertain Tax Positions

Uncertain tax positions, if ever recognized in the financial statements, would be recorded in the consolidated statements of operations as part of the income tax provision.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, exclusive of interest and penalties, included in the deferred tax liability on our accompanying Consolidated Balance Sheets is as follows:

Year Ended March 31,

Beginning balance

(Decrease) increase related to prior period tax positions

Increases related to current period tax positions

Ending balance

As of March 31, 2025 , we have not recorded any gross unrecognized tax benefits.

We recognize interest and penalties accrued on uncertain income tax positions in other expense and general and administrative expense, respectively.

As of March 31, 2026 , we had no gross unrecognized tax benefits.

We recognize any interest and penalties accrued on uncertain income tax positions in other expense and general and administrative expense, respectively.

Interest and penalties included in other long-term liabilities on our accompanying Consolidated Balance Sheets were $0 for each of the years ended March 31, 2026, 2025 and 2024 .

We do not expect a material change in unrecognized tax benefits or interest in the next 12 months.

Income Tax Examinations

We file income tax returns in the U.S.

1 unchanged sentence

In the normal course of business, we are subject to examination by taxing authorities throughout the world.

The tax year ended March 31, 2024 for Mesa Laboratories, Inc.

is under review by the U.S.

Internal Revenue Service.

The following tax years remain subject to examination:

Significant Jurisdictions

States, Other

Commitments and Contingencies

We are party to various legal proceedings arising in the ordinary course of business.

As of March 31, 2025 , we are not party to any legal proceeding that management believes could have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

In April 2025, we paid the GKE sellers $ 9,555 to fully settle the portion of the acquisition price that had been held back against potential indemnification losses.

Segment information is prepared on the same basis that our chief operating decision maker, our CEO, uses to manage our segments, evaluate financial results, and make key operating decisions.

During fiscal 2026, a civil complaint was filed against Mesa in the United States District Court for the Northern District of Ohio alleging, among other things, misappropriation of trade secrets and tortious interference with a contract in connection with the departure of a former executive of a third party and that individual’s subsequent employment with Mesa.

The complaint seeks injunctive relief, monetary damages, attorneys’ fees, and other remedies.

Mesa denies the allegations and intends to vigorously defend itself.

Due to the early stage of the proceedings, we are unable to predict the outcome of this matter or reasonably estimate the amount of any potential loss, if any.

While it is reasonably possible that the resolution of this matter could result in a loss to Mesa, which may be material, we have not recorded an accrual as of March 31, 2026, as any such loss cannot be reasonably estimated at this time.

Other than as described above, as of March 31, 2026 , we are not party to any legal proceeding that management believes could have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

Segment information is prepared on the same basis that our chief operating decision maker, our CEO, uses to assess 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.

The CODM uses segment revenue, organic revenues growth (non-GAAP), and gross profit to allocate resources and to assess the performance of our segments.

Monthly, the CODM reviews forecast-to-actual and prior-to-current period variances in segment revenue and in segment gross profit when making decisions to allocate capital and personnel to the segments.

Our CODM also reviews operating income, adjusted to exclude non-cash items such as depreciation, amortization and stock based compensation, on a consolidated basis to further manage operations.

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 reviews non-GAAP organic revenues growth and non-GAAP adjusted operating income to support strategic planning and resource development.

The accounting policies of our operating segments are the same as those described in Note 1 .

"Description of Business and Summary of Significant Accounting Policies.

Effective April 13, 2026, Dr.

Siddhartha Kadia began his tenure as Mesa’s CEO and CODM.

The presentation of segment information below is consistent with the manner in which our segments were evaluated and operated throughout fiscal year 2026.

The following tables set forth our segment information:

Sterilization and Disinfection Control (d)

Clinical Genomics

Biopharmaceutical Development

Calibration Solutions

Clinical Genomics

Corporate and Other (e)

6 unchanged sentences

526 1,512 - 765 - 2,803

Non-cash GKE inventory step-up amortization

1,232 - - - - 1,232

Other cost of revenues (b)

25 unchanged sentences

Operating expense

Operating (loss)

Operating income

Nonoperating expense, net

(Loss) before income taxes

$ ( 275,648 )

Earnings before income taxes

Year Ended March 31, 2024

4 unchanged sentences

266 1,338 - 4,448 - 6,052

Non-cash GKE inventory step-up amortization

1,229 - - - - 1,229

Other cost of revenues (b)

6 unchanged sentences

Operating expense

Operating income

Operating (loss)

Nonoperating expense, net

(Loss) before income taxes

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

$ ( 275,648 )

Intersegment revenues are eliminated to arrive at consolidated totals.

Revenues as presented are consistent with GAAP measurement principles and our CODM's review of segment information.

4 unchanged sentences

Certain depreciation expense classified reflected in Corporate and Other in fiscal years 2024 and 2023 has been recast to conform to current year presentation.

Changes in the Sterilization and Disinfection Control division are primarily attributable to the GKE acquisition consummated in the third quarter of fiscal year 2024.

The following table sets forth net inventories by reportable segment.

Our chief operating decision maker is not provided with any other segment asset information.

In addition to sales of our products, inventories decreased in fiscal year 2025 primarily due to adjustments to realizable value and amortization of non-cash inventory step-up from the GKE acquisition.

The following table sets forth inventories by reportable segment.

Our CODM is not provided with any other segment asset information.

Sterilization and Disinfection Control

$ 5,943 $ 5,545

Clinical Genomics

Biopharmaceutical Development

Calibration Solutions

Clinical Genomics 8,315 9,776

Total inventories

2 unchanged sentences

Long-lived assets exclude goodwill and intangible assets acquired in a business combination, deferred tax assets and other non-tangible assets.

The increase in long-lived assets in Sweden is primarily due to right of use assets associated with a ten -year operating lease that commenced in fiscal year 2025 related to a facility used by our Biopharmaceutical Development division for manufacturing and administrative purposes.

March 31, March 31,

1 unchanged sentence

$ 29,893 $ 29,200

10,858 11,634

Total long-lived assets

$ 47,919 $ 48,715

Revenues from external customers are attributed to individual countries based upon locations to which the product is shipped or exported, as follows:

Revenues from external customers are attributed to individual countries based upon the location to which the product is shipped or exported, as follows:

Year Ended March 31,

6 unchanged sentences

No customer accounts for 10% or more of our consolidated revenues.

No foreign country other than China exceeds 10% of total revenues.

No foreign country exceeds 10% of total revenues.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data