MESA LABORATORIES INC /CO/ 10-K

Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Mesa Laboratories, Inc. 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, 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 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 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 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 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 A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Page 37 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 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. 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 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. 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. ● Evaluating the appropriateness of the methodologies used, and evaluating the relative weight assigned to the various methodologies used in the analysis. ● Evaluating the significant assumptions used, including the reasonableness of: ● 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. ● management’s selection of the discount rate and market multiples of comparable companies by comparing the underlying source information to publicly available market data. ● Testing the completeness, accuracy, and reliability of underlying data used in the Company’s analysis. ● Utilizing our valuation professionals with specialized skill and knowledge to assist in evaluating the methodologies used and the reasonableness of certain significant assumptions. /s/ Baker Tilly LLP Los Angeles, California June 2, 2026 We have served as the Company's auditor since 2024. Page 38 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Mesa Laboratories, Inc. Opinion on the Financial Statements 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 These financial statements are the responsibility of the Company’s management. 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 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/ RSM US LLP We served as the Company’s auditor from 2023 to 2024. Los Angeles, California June 28, 2024 Page 39 Table of Contents Mesa Laboratories, Inc. Consolidated Balance Sheets (In thousands, except share amounts) March 31, March 31, 2026 2025 ASSETS Current assets Cash and cash equivalents $ 26,928 $ 27,321 Accounts receivable, less allowances for credit losses of $ 2,569 and $ 1,186 , respectively 44,099 41,970 Inventories 26,373 25,365 Prepaid expenses and other current assets 8,868 8,029 Total current assets 106,268 102,685 Noncurrent assets Property, plant and equipment, net 30,613 32,333 Deferred tax asset 1,501 1,371 Other assets 19,155 18,324 Customer relationships, net 63,211 72,880 Other intangibles, net 20,136 23,995 Goodwill 186,863 181,760 Total assets $ 427,747 $ 433,348 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 4,928 $ 5,747 Accrued payroll and benefits 19,006 17,858 Unearned revenues 14,723 14,710 Other accrued expenses 17,616 24,601 Term loan, current portion 5,625 3,750 Convertible senior notes, current portion, net of debt issuance costs - 97,297 Total current liabilities 61,898 163,963 Noncurrent liabilities Deferred tax liability 20,085 20,181 Other noncurrent liabilities 13,662 12,472 Term loan, noncurrent portion, net of debt issuance costs 61,357 66,902 Revolving line of credit 84,500 10,000 Total liabilities 241,502 273,518 Commitments and Contingencies (Note 13) Stockholders’ equity Common stock, no par value; authorized 25,000,000 shares; issued and outstanding, 5,524,931 and 5,455,421 shares, respectively 375,348 358,541 (Accumulated deficit) ( 185,747 ) ( 188,936 ) Accumulated other comprehensive (loss) ( 3,356 ) ( 9,775 ) Total stockholders’ equity 186,245 159,830 Total liabilities and stockholders’ equity $ 427,747 $ 433,348 See accompanying notes to consolidated financial statements. Page 40 Table of Contents Mesa Laboratories, Inc. Consolidated Statements of Operations (In thousands, except per share data) Year Ended March 31, 2026 2025 2024 Revenues: Products $ 203,392 $ 198,395 $ 176,796 Services 45,738 42,583 39,391 Total revenues 249,130 240,978 216,187 Cost of revenues: Cost of products 64,612 60,441 57,200 Cost of services 26,248 29,667 25,737 Total cost of revenues 90,860 90,108 82,937 Gross profit 158,270 150,870 133,250 Operating expense: Selling 40,793 41,683 38,625 General and administrative, other than impairment of finite-lived intangible assets and goodwill 78,658 73,333 72,867 Research and development 20,308 19,518 19,300 Impairment of finite-lived intangible assets - - 117,641 Impairment of goodwill - - 156,892 Total operating expense 139,759 134,534 405,325 Operating income (loss) 18,511 16,336 ( 272,075 ) Nonoperating expense (income): Interest expense and amortization of debt issuance costs 10,692 11,859 5,697 Gain on extinguishment of convertible senior notes - ( 2,887 ) - Other (income) expense, net ( 4,195 ) 1,403 ( 2,124 ) Total nonoperating expense, net 6,497 10,375 3,573 Earnings (loss) before income taxes 12,014 5,961 ( 275,648 ) Income tax expense (benefit) 5,302 7,935 ( 21,402 ) Net income (loss) $ 6,712 $ ( 1,974 ) $ ( 254,246 ) Net earnings (loss) per share Basic $ 1.22 $ ( 0.36 ) $ ( 47.20 ) Diluted $ 1.21 $ ( 0.36 ) $ ( 47.20 ) Weighted-average common shares outstanding Basic 5,514 5,421 5,386 Diluted 5,565 5,421 5,386 See accompanying notes to consolidated financial statements. Page 41 Table of Contents Mesa Laboratories, Inc. Consolidated Statements of Comprehensive Income (Loss) (In thousands) Year Ended March 31, 2026 2025 2024 Net income (loss) $ 6,712 $ ( 1,974 ) $ ( 254,246 ) Other comprehensive income (loss) Foreign currency translation adjustments 6,419 4,980 ( 1,960 ) Comprehensive income (loss) $ 13,131 $ 3,006 $ ( 256,206 ) See accompanying notes to consolidated financial statements. Page 42 Table of Contents Mesa Laboratories, Inc. Consolidated Statements of Stockholders’ Equity (In thousands, except share amounts) Common Stock Number of Shares Amount (Accumulated Deficit) Retained Earnings AOCI* Total March 31, 2023 5,369,466 $ 332,076 $ 74,199 $ ( 12,795 ) $ 393,480 Vesting of restricted stock units and exercise of stock options 30,418 358 - - 358 Tax withholding on restricted stock units ( 5,393 ) ( 728 ) - - ( 728 ) Dividends paid, $ 0.64 per share - - ( 3,447 ) - ( 3,447 ) Stock-based compensation expense - 11,936 - - 11,936 Foreign currency translation - - - ( 1,960 ) ( 1,960 ) Net (loss) - - ( 254,246 ) - ( 254,246 ) March 31, 2024 5,394,491 $ 343,642 $ ( 183,494 ) $ ( 14,755 ) $ 145,393 Vesting of restricted stock units and exercise of stock options 69,526 2,644 - - 2,644 Tax withholding on restricted stock units ( 8,596 ) ( 887 ) - - ( 887 ) Dividends paid, $ 0.64 per share - - ( 3,468 ) - ( 3,468 ) Stock-based compensation expense - 13,142 - - 13,142 Foreign currency translation - - - 4,980 4,980 Net (loss) - - ( 1,974 ) - ( 1,974 ) March 31, 2025 5,455,421 $ 358,541 $ ( 188,936 ) $ ( 9,775 ) $ 159,830 Vesting of restricted stock units 80,825 - - - - Tax withholding on restricted stock units ( 11,315 ) ( 1,061 ) - - ( 1,061 ) Dividends paid, $ 0.64 per share - - ( 3,523 ) - ( 3,523 ) Stock-based compensation expense - 17,868 - - 17,868 Foreign currency translation - - - 6,419 6,419 Net income - - 6,712 - 6,712 March 31, 2026 5,524,931 $ 375,348 $ ( 185,747 ) $ ( 3,356 ) $ 186,245 *Accumulated Other Comprehensive (Loss) Income. See accompanying notes to consolidated financial statements. Page 43 Table of Contents Mesa Laboratories, Inc. Consolidated Statements of Cash Flows (In thousands) Year Ended March 31, 2026 2025 2024 Cash flows from operating activities: Net income (loss) $ 6,712 $ ( 1,974 ) $ ( 254,246 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation of property, plant and equipment 5,254 5,382 4,233 Amortization of acquisition-related intangibles 18,017 19,145 27,341 Stock-based compensation expense 17,868 13,142 11,936 Non-cash interest expense and debt issuance cost amortization 682 990 926 Gain on extinguishment of convertible senior notes - ( 2,887 ) - Amortization of step-up in inventory basis - 1,232 1,229 Deferred taxes ( 1,292 ) ( 72 ) ( 28,421 ) Impairment loss on goodwill and finite-lived intangible assets - - 274,533 Other 577 4,946 629 Cash from changes in operating assets and liabilities: Accounts receivable ( 3,206 ) ( 2,925 ) 4,940 Inventories ( 4,434 ) 1,153 2,563 Prepaid expenses and other assets 608 498 211 Accounts payable ( 1,197 ) ( 388 ) ( 97 ) Accrued liabilities and taxes payable 3,497 9,504 ( 1,236 ) Unearned revenues ( 255 ) ( 938 ) ( 408 ) Net cash provided by operating activities 42,831 46,808 44,133 Cash flows from investing activities: Purchases of property, plant and equipment ( 3,250 ) ( 4,249 ) ( 2,567 ) Acquisition of customer lists - ( 250 ) - Acquisition of businesses, net of cash acquired and holdback liabilities - - ( 78,739 ) Net cash (used in) investing activities ( 3,250 ) ( 4,499 ) ( 81,306 ) Cash flows from financing activities: Proceeds from debt borrowings 107,500 73,465 71,000 Repurchase of convertible note debt ( 97,500 ) ( 71,560 ) - Other debt principal repayments ( 36,749 ) ( 44,251 ) ( 33,500 ) GKE acquisition holdback payment ( 9,555 ) - - Dividends paid ( 3,523 ) ( 3,468 ) ( 3,447 ) Payment of tax withholding obligation on vesting of restricted stock ( 1,061 ) ( 887 ) ( 728 ) Proceeds from the exercise of stock options - 2,644 358 Other financing, net ( 966 ) ( 452 ) ( 847 ) Net cash (used in) provided by financing activities ( 41,854 ) ( 44,509 ) 32,836 Effect of exchange rate changes on cash and cash equivalents 1,880 1,307 ( 359 ) Net (decrease) in cash and cash equivalents ( 393 ) ( 893 ) ( 4,696 ) Cash and cash equivalents at beginning of period 27,321 28,214 32,910 Cash and cash equivalents at end of period $ 26,928 $ 27,321 $ 28,214 Cash paid for: Income taxes $ 1,870 $ 5,731 $ 4,591 Interest $ 10,017 $ 11,077 $ 4,648 See accompanying notes to consolidated financial statements. Page 44 Table of Contents Mesa Laboratories, Inc. Notes to Consolidated Financial Statements (dollar and share amounts in thousands, unless otherwise specified) Note 1. 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." We are a global leader in the design and manufacture of life sciences tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare and medical device industries. We offer products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world. We have manufacturing operations in the United States and Europe, and our products are marketed by our sales personnel in North America, Europe and 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 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, 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. Principles of Consolidation and Basis of Presentation Our Consolidated Financial Statements are prepared in accordance with the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (“GAAP”), and include our accounts and those of our wholly owned subsidiaries after elimination of all intercompany accounts and transactions. Page 45 Table of Contents Management Estimates The preparation of our Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our Consolidated Financial Statements and accompanying notes. Actual results could differ from our estimates under different assumptions or conditions. Summary of Significant Accounting Policies Foreign Currency 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 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 in an orderly transaction between market participants. We determine fair value based on the following input hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets. Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or that can be corroborated with observable market data. Level 3: Unobservable inputs supported by little or no market activity. 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 applicable, 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 impaired. Such fair value measurements require the use of Level 3 inputs. See Note 3. “Fair Value Measurements” for further information. Revenue Recognition 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 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. Page 46 Table of Contents Services: 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 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 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 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. Discounts are typically allocated to obligations included in the contract based on the standalone values of such obligations. All expected and actual consideration from customers is included in the transaction price. See Note 2. “Revenue” for further information. Shipping and Handling 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 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 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 We typically provide assurance-type limited product warranties on our products and, accordingly, accrue for estimates of related warranty expenses. Accounts Receivable and Allowance for Credit Losses 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. Page 47 Table of Contents 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 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 Inventories are stated at the lower of cost or net realizable value. 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, 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, 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. Estimated useful lives of significant classes of depreciable assets are as follows: Category Useful Lives in Years Buildings and building improvements 40 (or less) Manufacturing equipment 10 (or less) Office, lab and other equipment, furniture and fixtures 7 (or less) Computer equipment 3 (or less) Leasehold improvements Lesser of the economic life or the remaining term in the respective lease 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 applicable asset category. Leases 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. Page 48 Table of Contents 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. 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 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. See Note 5. “Leases” for further information. Intangible Assets, Impairment Testing 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. 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. 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. Page 49 Table of Contents 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 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, 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 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, 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 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. Page 50 Table of Contents 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 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 2026 or fiscal year 2025. See Note 9. “Stock Transactions and Stock-Based Compensation” for further information. Income Taxes Income tax expense includes U.S., state, local and international income taxes. Deferred tax assets and liabilities are recognized and reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of existing assets and liabilities used for income tax purposes. The tax rate used to determine the deferred tax assets and liabilities is based on the enacted tax rate for the year and the manner in which the differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty, such as acquisitions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. We prepare and file tax returns based on interpretation of tax laws and regulations. In the normal course of business, our tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax, interest and penalty assessments by these taxing authorities. 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 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 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. Page 51 Table of Contents See Note 12. “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. Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a net loss; in such cases the inclusion of the potential common shares would have an antidilutive effect. See Note 10. “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” for further information. Purchase Accounting for Acquisitions We account for all business combinations in which we obtain control over another entity using the acquisition method of accounting, which requires most assets (both tangible and intangible) and liabilities to be recorded at fair value at the date of acquisition. 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 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. We expense acquisition-related costs, such as legal and advisory fees, as incurred in general, and administrative expenses in the Consolidated Statements of Operations. Results of operations of acquired companies are included in our Consolidated Financial Statements from the date of the acquisition forward. 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 2026 or 2025 . In the year ended March 31, 2024, we acquired businesses for total net purchase prices of $ 87,187 . See Note 4. “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 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 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. Page 52 Table of Contents Recently Adopted Accounting Pronouncements 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 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 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. Note 2. Revenue We develop, manufacture, market, sell and maintain life sciences tools and quality control instruments and related consumables. Hardware sales include physical products such as instruments used for molecular and genetic analysis, protein synthesizers, medical meters, wireless sensor systems, data loggers, and process challenge devices. Hardware may be offered with accompanying perpetual or annual software licenses, which in some cases are required for the hardware to function. Consumables are single-use products requiring frequent replacement in our customers' operating cycles. Consumables sold by our Clinical Genomics and Biopharmaceutical Development divisions, such as reagents used for molecular and genetic analysis or solutions used for protein synthesis, are critical to the ongoing use of our instruments. Consumables such as biological and chemical indicator test strips sold by our Sterilization and Disinfection Control division are used on a standalone basis. Page 53 Table of Contents We also offer maintenance, calibration and testing service contracts. 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 : Year Ended March 31, 2026 Sterilization and Disinfection Control (1) Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 90,521 $ 16,869 $ 2,737 $ 35,815 $ 145,942 Hardware and Software 505 19,170 32,479 5,296 57,450 Services 10,541 12,587 18,335 4,275 45,738 Total revenues $ 101,567 $ 48,626 $ 53,551 $ 45,386 $ 249,130 Year Ended March 31, 2025 Sterilization and Disinfection Control (1) Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 82,736 $ 17,287 $ 3,039 $ 35,672 $ 138,734 Hardware and Software 496 19,649 31,827 7,689 59,661 Services 10,186 11,794 16,883 3,720 42,583 Total revenues $ 93,418 $ 48,730 $ 51,749 $ 47,081 $ 240,978 Year Ended March 31, 2024 Sterilization and Disinfection Control (1) Biopharmaceutical Development Calibration Solutions Clinical Genomics Total Consumables $ 65,459 $ 17,086 $ 2,345 $ 36,086 $ 120,976 Hardware and Software 549 12,993 30,024 12,254 55,820 Services 9,116 10,633 15,394 4,248 39,391 Total revenues $ 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 Our contracts have varying payment terms and conditions. Some customers prepay for products and services, resulting in either unearned revenues or customer deposits, called contract liabilities. Short-term contract liabilities are included within unearned revenues in the accompanying Consolidated Balance Sheets, and long-term contract liabilities are included within other long-term liabilities in the accompanying Consolidated Balance Sheets. The significant majority of our revenues and related receivables and contract liabilities are generated from contracts with customers with original expected durations of twelve months or less. Contract liabilities will be recognized to revenue as we satisfy our obligations under the terms of the contracts. A summary of contract liabilities is as follows: Contract liabilities as of March 31, 2025 $ 14,803 Prior year liabilities recognized in revenues during the year ended March 31, 2026 ( 10,155 ) Contract liabilities added during the year ended March 31, 2026, net of revenues recognized 10,075 Contract liabilities balance as of March 31, 2026 $ 14,723 Page 54 Table of Contents Note 3. Fair Value Measurements Our financial instruments generally consist of cash and cash equivalents, trade accounts receivable, obligations under trade accounts payable and debt. Due to their short-term nature, the carrying values of cash and cash equivalents, trade accounts receivable and trade accounts payable approximate fair value; they are classified within Level 1 of the fair value hierarchy. The financial instruments that subject us to the highest concentrations of credit risk are cash and accounts receivable. We maintain relationships and cash deposits at multiple banking institutions across the world in an effort to diversify and reduce risk of loss. Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sale s. No customers accounted for more than 10% of total trade receivables as of March 31, 2026 . 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. See Note 8 . "Indebtedness" for further information. 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 Carrying Value Fair Value (Level 2) Notes $ 97,297 $ 95,063 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 . Note 4. Significant Transactions Acquisition of GKE, Fiscal year 2024 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. Ltd. 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 . Total cash consideration for the GKE acquisition was $ 87,187 , net of cash acquired and financial liabilities assumed and inclusive of working capital adjustments. We funded the acquisition through a combination of cash on hand and a total of $ 71,000 borrowed under our line of credit. 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. Page 55 Table of Contents Supplemental unaudited pro-forma information 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. Prior to acquisition, GKE was a privately owned company with financial statements prepared on a statutory, rather than GAAP, basis, using a different fiscal year end than Mesa's. Certain financial information cannot be recreated for accurate financial results. For example, prior to Mesa's ownership, GKE accounted for inventory at an unburdened rate and performed only annual inventory counts, such that we cannot accurately estimate cost of goods sold. Additionally, all transactions occurring between the three GKE entities, which are substantial, were accounted for at arms-length prior to acquisition; we eliminated intercompany transactions from a revenue perspective above, but we do not have sufficient historical detail to eliminate intercompany cost of revenues accurately. As presentation of pro-forma net earnings information would require extensive estimation and could not be sourced from sufficiently factual information reasonably aligned with GAAP, it is impracticable for us to disclose pro-forma net earnings information. Note 5. Leases We have operating leases for buildings and office equipment used in manufacturing and distribution, engineering, research and development, sales and marketing, and administration activities. The following table presents the lease balances within the Consolidated Balance Sheets related to our operating leases: Lease Assets and Liabilities Balance Sheet Location March 31, 2026 March 31, 2025 Operating lease ROU asset Other assets $ 17,500 $ 16,382 Current operating lease liabilities Other accrued expenses 3,687 3,523 Noncurrent operating lease liabilities 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: Year Ended March 31, 2026 2025 2024 Operating lease expense $ 4,990 $ 4,025 $ 3,453 Variable lease expense 1,781 1,316 1,039 Short term lease expense 388 571 423 Total lease expense $ 7,159 $ 5,912 $ 4,915 Weighted average remaining lease term in years 7.6 6.8 4.6 Weighted average discount rate 6.7 % 6.2 % 4.1 % Supplemental cash flow information related to leases was as follows: Year Ended March 31, 2026 2025 2024 Cash paid for amounts included in the measurements of lease liabilities $ 5,041 $ 4,534 $ 3,392 Operating lease assets obtained in exchange for operating lease liabilities 4,151 9,863 4,265 As of March 31, 2026 maturities of lease liabilities are as follows for future years ending March 31: 2027 $ 4,732 2028 1,702 2029 2,385 2030 2,284 2031 2,269 Thereafter 9,125 Future value of lease liabilities 22,497 Less: imputed interest ( 5,148 ) Present value of lease liabilities $ 17,349 Page 56 Table of Contents Note 6. Goodwill and Intangible Assets, Net Goodwill Goodwill arises from the excess purchase price of acquired businesses over the fair value of acquired tangible and intangible assets, less assumed liabilities. Changes in the carrying amount of goodwill were as follows: Sterilization and Disinfection Control Biopharmaceutical Development Calibration Solutions Clinical Genomics Total March 31, 2024 $ 79,430 $ 46,515 $ 37,211 $ 16,940 $ 180,096 Effect of foreign currency translation ( 22 ) 1,696 2 ( 12 ) 1,664 March 31, 2025 $ 79,408 $ 48,211 $ 37,213 $ 16,928 $ 181,760 Effect of foreign currency translation 3,402 1,455 53 193 5,103 March 31, 2026 $ 82,810 $ 49,666 $ 37,266 $ 17,123 $ 186,863 Finite-Lived Intangible Assets Intangible assets other than goodwill consisted of the following: March 31, 2026 March 31, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 188,192 $ ( 124,981 ) $ 63,211 $ 190,069 $ ( 117,189 ) $ 72,880 Other intangibles 60,308 ( 40,172 ) 20,136 61,192 ( 37,197 ) 23,995 Total finite-lived intangible assets $ 248,500 $ ( 165,153 ) $ 83,347 $ 251,261 $ ( 154,386 ) $ 96,875 Amortization expense for intangible assets was as follows: Year Ended March 31, 2026 2025 2024 Amortization in cost of revenues $ 2,803 $ 2,641 $ 6,052 Amortization in general and administrative 15,214 16,504 21,289 Total $ 18,017 $ 19,145 $ 27,341 Page 57 Table of Contents The range of useful lives and weighted-average remaining useful lives of amortizable intangible assets as of March 31, 2026 were as follows: Approx. Est. Useful Weighted Avg. Life Remaining Life Description (Years) (Years) Customer Relationships 5 - 12 6.6 Other Intangibles 7 - 12 5.0 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 : Fiscal Year Amortization Expense 2027 $ 17,182 2028 16,553 2029 15,993 2030 11,316 2031 4,854 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. Note 7. Supplemental Information Inventories consisted of the following: March 31, 2026 March 31, 2025 Raw materials $ 14,873 $ 14,775 Work in process 925 560 Finished goods 10,575 10,030 Total inventories $ 26,373 $ 25,365 Prepaid expenses and other consisted of the following: March 31, 2026 March 31, 2025 Prepaid expenses $ 2,785 $ 2,364 Deposits 1,644 1,752 Prepaid income taxes 819 1,040 Other current assets 3,620 2,873 Total prepaid expenses and other $ 8,868 $ 8,029 Page 58 Table of Contents Property, plant and equipment consisted of the following: March 31, 2026 March 31, 2025 Land $ 889 $ 889 Buildings and building improvements 23,368 23,280 Manufacturing equipment 23,424 22,694 Computer equipment 3,658 3,093 Other 7,922 7,188 Construction in progress 1,467 1,610 Gross total 60,728 58,754 Accumulated depreciation ( 30,115 ) ( 26,421 ) Total property, plant and equipment, net $ 30,613 $ 32,333 Depreciation expense was as follows: Year Ended March 31, 2026 2025 2024 Depreciation expense in cost of revenues $ 3,113 $ 3,160 $ 3,031 Depreciation expense in operating expense 2,141 2,222 1,202 Total depreciation expense $ 5,254 $ 5,382 $ 4,233 Accrued payroll and benefits consisted of the following: March 31, 2026 March 31, 2025 Bonus payable $ 10,509 $ 10,891 Wages and paid-time-off payable 3,333 3,672 Payroll related taxes 2,317 2,475 Severance 2,294 273 Other benefits payable 553 547 Total accrued payroll and benefits $ 19,006 $ 17,858 Other accrued expenses consisted of the following: March 31, 2026 March 31, 2025 Accrued business taxes $ 6,950 $ 5,996 Current operating lease liabilities 3,687 3,523 Income taxes payable 4,745 2,157 GKE acquisition holdback - 9,315 Other 2,234 3,610 Total other accrued expenses $ 17,616 $ 24,601 Page 59 Table of Contents Note 8 . Indebtedness Credit Facility Our secured credit agreement matures in April 2029 and includes: (i) A revolving credit facility with an aggregate principal amount of up to $ 125,000 (the "Revolver"), (ii) A term loan with a maximum principal amount of $ 75,000 , which is subject to escalating quarterly principal payments (the "Term Loan"), (iii) A swingline loan with an aggregate principal amount not exceeding $ 5,000 , and, (iv) Letters of credit with an aggregate stated amount not exceeding $ 2,500 at any time. We refer to the agreement in whole as the “Credit Facility.” 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 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. Term Loan We are required to make quarterly principal payments on the Term Loan. 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: Fiscal Year Amount 2027 $ 5,625 2028 5,625 2029 7,500 2030 48,750 Total principal remaining $ 67,500 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 March 31, 2025 Term Loan ( 5.9 % and 7.2 % as of March 31, 2026 and 2025, respectively) $ 67,500 $ 71,250 Less: debt issuance costs ( 518 ) ( 598 ) Less: current portion ( 5,625 ) ( 3,750 ) Noncurrent portion $ 61,357 $ 66,902 Page 60 Table of Contents Revolver As of March 31, 2026 , the outstanding balance under our Revolver was $ 84,500 , and $ 40,500 was available for borrowing. We are obligated to pay quarterly unused commitment fees of between 0.20 % and 0.35 % of the Revolver’s aggregate principal amount, based on our leverage ratio. 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 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 Unamortized debt issuance costs ( 203 ) Net carrying value $ 97,297 We recognized interest expense on the Notes as follows: Year Ended March 31, 2026 2025 2024 Coupon interest expense at 1.375% $ 503 $ 1,372 $ 2,372 Amortization of debt issuance costs 203 546 926 Total interest on the Notes $ 706 $ 1,918 $ 3,298 Note 9 . Stock Transactions and Stock-Based Compensation (dollars and shares in thousands, except per share values) Stock-Based Compensation 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: Year Ended March 31, 2026 2025 2024 Stock-based compensation expense $ 17,868 $ 13,142 $ 11,936 Amount of income tax expense recognized in earnings 2,616 2,068 2,718 Stock-based compensation expense, net of tax $ 20,484 $ 15,210 $ 14,654 Page 61 Table of Contents Time-Based Restricted Stock Units (RSUs) RSU activity under the 2021 Equity Plan was as follows (shares and dollars in thousands, except per-share data): Time-Based Restricted Stock Units Number of Shares Weighted- Average Grant Date Fair Value per Share Aggregate Intrinsic Value Nonvested at March 31, 2025 145 $ 106.54 $ 17,197 Awards granted 122 90.91 Awards forfeited or expired ( 15 ) 97.38 Awards distributed ( 65 ) 117.13 5,808 Nonvested as of March 31, 2026 187 $ 93.39 $ 16,503 Expected to vest 165 $ 93.13 $ 14,558 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 following table summarizes RSU valuation information: Year Ended March 31, 2026 2025 2024 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) We grant performance-based RSUs to certain key employees. Vesting of the awards is contingent upon meeting certain service conditions, as well as meeting certain performance and/or market conditions. PSU activity under the 2021 Equity Plan was as follows (shares and dollars in thousands, except per-share data): Performance-Based Restricted Stock Units Number of Shares Weighted- Average Grant Date Fair Value per Share Aggregate Intrinsic Value Nonvested at March 31, 2025 85 $ 166.31 $ 10,101 Awards granted 44 99.56 Performance adjustment (1) ( 3 ) 132.29 Awards forfeited or expired - - Awards distributed ( 16 ) 265.32 1,336 Nonvested as of March 31, 2026 110 $ 126.18 $ 9,966 Expected to vest 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. 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. Page 62 Table of Contents 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. 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. 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 former CEO. 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 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 Shares Subject to Options Weighted- Average Exercise Price per Share Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding as of March 31, 2025 155 $ 192.92 2.7 $ 52 Awards granted - - - Awards forfeited or expired ( 23 ) 202.30 - Awards exercised or distributed - - - Outstanding as of March 31, 2026 132 $ 191.22 1.7 $ - Exercisable awards as of March, 31, 2026 117 $ 199.04 1.5 $ - Exercisable awards and awards expected to vest, March 31, 2026 131 $ 191.35 1.7 $ - 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 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. Under the program, shares of common stock may be purchased from time to time in the open market at prevailing prices or in negotiated transactions off the market. Shares of common stock repurchased will be cancelled and repurchases of shares of common stock will be funded through existing cash reserves. There were no repurchases of our shares of common stock under this plan during the years ended March 31, 2026 , 2025 or 2024 . As of March 31, 2026 , we have repurchased 162 shares under this plan. Page 63 Table of Contents Under applicable law, Colorado corporations are not permitted to retain treasury stock. 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. 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. Table of Contents Note 10. Net Earnings (Loss) Per Share (dollars and shares in thousands, except per share values) The following table presents a reconciliation of the denominators used in the computation of basic and diluted net (loss) earnings per share: Year Ended March 31, 2026 2025 2024 Net earnings (loss) available for shareholders $ 6,712 $ ( 1,974 ) $ ( 254,246 ) Weighted average outstanding shares of common stock (1) 5,514 5,421 5,386 Dilutive effect of stock options - - - Dilutive effect of unvested stock awards 51 - - Fully diluted shares 5,565 5,421 5,386 Basic earnings (loss) per share $ 1.22 $ ( 0.36 ) $ ( 47.20 ) Diluted earnings (loss) per share $ 1.21 $ ( 0.36 ) $ ( 47.20 )  ( 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. Page 64 Table of Contents 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, 2026 2025 2024 Assumed conversion of convertible debt 128 351 608 Stock awards that were anti-dilutive 206 386 268 Total stock awards excluded from diluted EPS 334 737 876 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. Note 11 . Employee Benefit Plan s We adopted the Mesa Laboratories, Inc. 401 (k) Retirement Plan effective January 1, 2000. Under this plan, we match 100 % of the first 4 % of eligible pay contributed by each eligible employee, and contributions vest immediately. Participation is voluntary, and employees are eligible on the first day of the month following their start date. Our contributions to the Mesa Laboratories, Inc. 401 (k) retirement plan were $ 1,711 , $ 1,645 and $ 2,078 during the years ended March 31, 2026, 2025 and 2024 , respectively. Note 12 . Income Taxes Provision for Income Taxes Earnings (loss) before income taxes was as follows: Year Ended March 31, 2026 2025 2024 Domestic $ 6,856 $ 12,615 $ ( 233,853 ) Foreign 5,158 ( 6,654 ) ( 41,795 ) Total earnings (loss) before income taxes $ 12,014 $ 5,961 $ ( 275,648 ) The components of our provision for income taxes were as follows: Year Ended March 31, 2026 2025 2024 Current tax provision: U.S. Federal $ 753 $ 3,994 $ 3,002 U.S. State 502 1,212 1,678 Foreign 5,328 2,790 2,330 Total current tax expense 6,583 7,996 7,010 Deferred tax provision: U.S. Federal 1,450 63 ( 20,387 ) U.S. State 443 13 ( 1,853 ) Foreign ( 3,174 ) ( 137 ) ( 6,172 ) Total deferred tax (benefit) ( 1,281 ) ( 61 ) ( 28,412 ) Total income tax expense (benefit) $ 5,302 $ 7,935 $ ( 21,402 ) Page 65 Table of Contents 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, 2026 Amount % Earnings Before Income Taxes $ 12,014 U.S. Federal Statutory Tax Rate 2,523 21.0 % State and Local Income Taxes, Net of Federal Income Tax Effect (1) 746 6.2 % Foreign Tax Effects: Germany: Federal statutory rate difference ( 492 ) ( 4.1 % ) Surcharge/trade tax charge 2,022 16.8 % Deferred tax rate change ( 304 ) ( 2.5 % ) Changes in valuation allowance ( 171 ) ( 1.4 % ) Other 65 0.5 % Other foreign jurisdictions 10 0.1 % Effect of Changes in Tax Laws or Rates Enacted in the Current Period - - % Effect of Cross-Border Tax Laws: GILTI 375 3.1 % Subpart F Income 259 2.2 % Other 48 0.4 % Changes in valuation allowance ( 2,259 ) ( 18.8 % ) Tax Credits ( 580 ) ( 4.8 % ) Nontaxable or Nondeductible Items: Compensation adjustments 2,808 23.4 % Changes in Unrecognized Tax Benefits - - % Other Adjustments: Deferred charges on intercompany profit 139 1.2 % Other 113 0.9 % 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. Page 66 Table of Contents 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, 2025 2024 Amount % Amount % Earnings (loss) before income taxes $ 5,961 $ ( 275,648 ) Federal income taxes at statutory rates 1,251 21.0 % ( 57,886 ) 21.0 % State income taxes, net of federal benefit 317 5.3 % ( 2,508 ) 0.9 % Compensation adjustments 2,283 38.3 % 2,738 ( 1.0 % ) Research and development credit ( 1,054 ) ( 17.7 % ) ( 1,093 ) 0.4 % Return to provision adjustment 516 8.7 % ( 182 ) 0.1 % Subpart F, GILTI, & FDII ( 484 ) ( 8.1 % ) ( 412 ) 0.1 % Foreign rate differential 2,047 34.3 % ( 566 ) 0.2 % Permanent difference 47 0.8 % 479 ( 0.2 % ) Goodwill impairment - - % 32,594 ( 11.8 % ) Valuation allowance 3,019 50.6 % 5,398 ( 2.0 % ) Other ( 7 ) ( 0.1 % ) 36 - % Total income tax expense (benefit) $ 7,935 133.1 % $ ( 21,402 ) 7.8 % Effective income tax rate 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 Federal $ - State: Montana 97 U.S. States, Other 633 Foreign: Germany 430 France 477 China 233 Income taxes paid, net of amounts refunded $ 1,870 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. Page 67 Table of Contents 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. Significant components of our deferred tax assets (liabilities) were as follows: 2026 2025 Deferred tax assets: Capitalized research expenditures $ 4,041 $ 8,148 Income tax credits 2,618 2,774 Allowances and reserves 3,317 2,687 Stock compensation deductible differences 1,890 1,632 Operating lease liabilities 1,972 1,860 Inventories 1,058 1,153 Net operating loss carryforwards 3,660 3,219 Other temporary differences 615 265 Net deferred tax assets, gross 19,171 21,738 Valuation allowance ( 6,408 ) ( 8,999 ) Net deferred tax assets, net 12,763 12,739 Deferred tax liabilities: Operating lease right-of-use assets ( 2,051 ) ( 1,843 ) Goodwill and intangible assets ( 25,275 ) ( 26,854 ) Property, plant and equipment ( 2,268 ) ( 2,273 ) Other temporary differences ( 1,753 ) ( 579 ) Total deferred tax liabilities ( 31,347 ) ( 31,549 ) Net deferred tax assets/(liabilities) ( 18,584 ) ( 18,810 ) Valuation Allowance In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. In evaluating the need for a valuation allowance, management takes into account various factors, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. Based on this evaluation, we have concluded that a valuation allowance is necessary on our U.S. and certain German operations and we do not expect to fully realize our deferred tax assets as of March 31, 2026 . The following table summarizes the changes in our valuation allowance for deferred tax assets: Year Ended March 31, 2026 2025 Beginning balance $ 8,999 $ 5,975 (Reductions) Additions charged to income tax expense and other accounts ( 2,648 ) 3,657 Deductions from reserves - ( 637 ) Cumulative translation adjustment 57 4 Ending balance $ 6,408 $ 8,999 Page 68 Table of Contents Net Operating Loss Credit and Carryforwards As of March 31, 2026 , we had U.S. and Foreign net operating loss (“NOL”) carryforwards consisting of the following: March 31, 2026 Expiration Date Pre-2018 federal NOL carryforwards $ - N/A Post-2018 federal NOL carryforwards - Indefinite State NOL carryforwards 9,690 March 31, 2035 Foreign NOL carryforwards 13,846 Indefinite As of March 31, 2026 , we had U.S. tax credit carryforwards consisting of the following: March 31, 2026 Expiration Date Federal research tax credit carryforwards $ - N/A State research tax credits carryforwards 3,295 March 31, 2039 Federal foreign tax credit carryforwards 15 March 31, 2037 Undistributed earnings in foreign subsidiaries 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. A deferred tax liability will be recognized if and when we no longer plan to permanently reinvest these undistributed earnings. Uncertain Tax Positions 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. Page 69 Table of Contents Income Tax Examinations We file income tax returns in the U.S. various states and foreign jurisdictions. 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 Open Years U.S. Federal 2022 - 2024 Montana 2022 - 2024 U.S. States, Other 2021 - 2024 Foreign 2019 - 2024 Note 13. Commitments and Contingencies We are party to various legal proceedings arising in the ordinary course of business. 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. Note 14. Segment Data 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. 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. Page 70 Table of Contents The following tables set forth our segment information: Sterilization and Disinfection Control (d) Biopharmaceutical Development Calibration Solutions Clinical Genomics Corporate and Other (e) Total Company Year Ended March 31, 2026 Revenues (a) $ 101,567 $ 48,626 $ 53,551 $ 45,386 $ - $ 249,130 Less: Depreciation in cost of revenues 1,779 308 448 578 - 3,113 Amortization in cost of revenues 526 1,512 - 765 - 2,803 Other cost of revenues (b) 27,555 18,253 21,121 18,015 - 84,944 Total segment cost of revenues 29,860 20,073 21,569 19,358 - 90,860 Gross Profit (c) $ 71,707 $ 28,553 $ 31,982 $ 26,028 $ - $ 158,270 Reconciling items: Operating expense $ 139,759 Operating income 18,511 Nonoperating expense, net 6,497 Earnings before income taxes $ 12,014 Year Ended March 31, 2025 Revenues (a) $ 93,418 $ 48,730 $ 51,749 $ 47,081 $ - $ 240,978 Less: Depreciation in cost of revenues 1,419 224 837 680 - 3,160 Amortization in cost of revenues 503 1,373 - 765 - 2,641 Non-cash GKE inventory step-up amortization 1,232 - - - - 1,232 Other cost of revenues (b) 25,604 17,220 20,275 19,966 10 83,075 Total segment cost of revenues 28,758 18,817 21,112 21,411 10 90,108 Gross Profit (c) $ 64,660 $ 29,913 $ 30,637 $ 25,670 $ ( 10 ) $ 150,870 Reconciling items: Operating expense $ 134,534 Operating income 16,336 Nonoperating expense, net 10,375 Earnings before income taxes $ 5,961 Year Ended March 31, 2024 Revenues (a) $ 75,124 $ 40,712 $ 47,763 $ 52,588 $ - $ 216,187 Less: Depreciation in cost of revenues 1,204 224 666 937 - 3,031 Amortization in cost of revenues 266 1,338 - 4,448 - 6,052 Non-cash GKE inventory step-up amortization 1,229 - - - - 1,229 Other cost of revenues (b) 19,123 13,750 19,550 20,125 77 72,625 Total segment cost of revenues 21,822 15,312 20,216 25,510 77 82,937 Gross Profit (c) $ 53,302 $ 25,400 $ 27,547 $ 27,078 $ ( 77 ) $ 133,250 Reconciling items: Operating expense $ 405,325 Operating (loss) ( 272,075 ) Nonoperating expense, net 3,573 (Loss) before income taxes $ ( 275,648 ) (a) 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. (b) Other segment cost of revenues for each reportable segment includes product costs, personnel costs (including stock-based compensation), and other manufacturing and overhead costs necessary to produce and sell our products and services, excluding depreciation, amortization, and non-cash inventory step-up amortization expenses. (c) Gross profit as presented is consistent with GAAP measurement principles and our CODM's review of segment information. (d) Includes GKE results beginning upon acquisition in fiscal year 2024. (e) Unallocated corporate expenses and other business activities are reported within Corporate and Other. Certain depreciation expense classified reflected in Corporate and Other in fiscal years 2024 and 2023 has been recast to conform to current year presentation. Page 71 Table of Contents The following table sets forth inventories by reportable segment. Our CODM is not provided with any other segment asset information. March 31, March 31, 2026 2025 Sterilization and Disinfection Control $ 5,943 $ 5,545 Biopharmaceutical Development 6,512 4,934 Calibration Solutions 5,603 5,110 Clinical Genomics 8,315 9,776 Total inventories $ 26,373 $ 25,365 The following table sets forth a summary of long-lived assets by geographic area. Long-lived assets exclude goodwill and intangible assets acquired in a business combination, deferred tax assets and other non-tangible assets. March 31, March 31, 2026 2025 United States $ 29,893 $ 29,200 Sweden 10,858 11,634 Germany 5,955 6,712 Other 1,213 1,169 Total long-lived assets $ 47,919 $ 48,715 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, 2026 2025 2024 United States $ 116,895 $ 116,615 $ 106,395 China 20,449 25,312 24,933 Other 111,786 99,051 84,859 Total revenues $ 249,130 $ 240,978 $ 216,187 No customer accounts for 10% or more of our consolidated revenues. No foreign country exceeds 10% of total revenues. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.