What changed in this filing

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Item 1. Business

2024-06-28 compared with 2023-05-30 · 185 added, 183 removed, 129 unchanged (74% of the section changed)

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." Mesa was organized in 1982 as a Colorado corporation.

We are a multinational manufacturer, developer, and seller of life sciences tools and critical quality control solutions, many of which are sold into niche markets driven by regulatory requirements.

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

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

We are headquartered in Lakewood, Colorado and our common stock is listed for trading on the Nasdaq Global Market (“Nasdaq”) under the symbol MLAB.

Our fiscal year ends on March 31. References in this Annual Report on Form 10-K (“annual report”) to a particular “fiscal year,” “year”

or “year-end” mean our fiscal year. 

We strive to create shareholder value and further our purpose of Protecting the Vulnerable® by growing our business both organically and through further strategic acquisitions, by improving our operating efficiency, and by continuing to hire, develop and retain top talent.

As a business, we commit to our purpose of Protecting the Vulnerable® every day by taking a customer-focused approach to developing, building and delivering our products and services in order to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world.

We serve a broad set of industries, particularly the pharmaceutical, healthcare and medical device verticals.

Our revenues come from product sales, which include consumables and hardware; as well as services, which include discrete and ongoing maintenance, calibration, and testing services. We grow our revenues organically by expanding our customer base, increasing sales volumes, and implementing price increases, and inorganically through acquisitions.

Our acquisition strategy is focused on businesses that complement our existing portfolio and those that expand our presence further into life sciences tools and critical quality control solutions markets for regulated applications.

We focus on improving our operating efficiency through the Mesa Way , which is our customer-centric, lean based system for continuously improving and operating a set of high-margin, niche businesses. As part of our ongoing commitment to empowerment, improvement, and learning, we launched an enhanced version of the Mesa Way during fiscal year 2023.

This iteration was developed by a cross-functional committee composed of employees from all job levels and divisions to help our employees engage deeply with Mesa’s vision and purpose.

The Mesa Way  is based on four pillars:

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." Mesa was organized in 1982 as a Colorado corporation.

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.

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

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

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

We are headquartered in Lakewood, Colorado and our common stock is listed for trading on the Nasdaq Global Market (“Nasdaq”) under the symbol MLAB.

Our fiscal year ends on March 31.

References in this Annual Report on Form 10-K (“annual report”) to a particular “fiscal year,” “year” or “year-end” mean our fiscal year.

We strive to create stakeholder value and further our purpose of Protecting the Vulnerable® by growing our business both organically and through acquisitions, by improving our operating efficiency, and by continuing to hire, develop and retain top talent.

As a business, we commit to our purpose of Protecting the Vulnerable® every day by taking a customer-focused approach to developing, building and delivering our products and services.

By delivering the highest quality products and services possible, we are committed to protecting the communities we serve.

Our revenues come from product sales, which include consumables and hardware;

as well as services, which include discrete and ongoing maintenance, calibration, and testing services.

We grow our revenues organically by expanding our customer base and our product offerings, increasing sales volumes, and implementing price increases, as well as inorganically through acquisitions.

Our acquisition strategy is focused on businesses that complement our existing portfolio and those that expand our global presence further into life sciences tools and critical quality control solutions markets for regulated applications.

We focus on improving our operating efficiency through the Mesa Way , which is our customer-centric, lean based system for sustainably improving and operating the manufacturing and administrative aspects of our high-margin, niche businesses.

The Mesa Way is based on four pillars:

M easure what matters:

We use “True North,”

our customers’

perspectives, to measure what matters most and to set high standards for performance.

We manage to leading indicators whenever possible, which drives us to proactively avoid problems before they are apparent to our customers.

We use our customers’ perspectives to measure what matters most and to set high standards for performance.

We manage to leading indicators whenever possible, which drives us to proactively avoid problems before they are apparent to our customers.

E mpower Teams:

We move decision making as close to the customer as possible and provide real-time communication forums to align the whole organization towards surpassing customer expectations.

We move decision making as close to the customer as possible and provide real-time communication forums to align the whole organization toward surpassing customer expectations.

S ustainably Improve:

We leverage a common and proven set of lean-based tools to identify sources of opportunities, prioritize our biggest opportunities, and enable change to be embraced and implemented quickly.

A lways Learn: We ensure that improvements are sustained, enabling us to raise performance expectations and repeat the cycle of improvement.

We leverage a common and proven set of lean-based tools to identify and prioritize opportunities and to enable change to be embraced and implemented.

A lways Learn:

We ensure that improvements are maintained, enabling us to raise performance expectations and repeat the cycle of improvement.

Equally, this cycle strengthens the Mesa team by providing endless learning opportunities for our employees, and helps us become an employer of choice in our communities.

We hire, develop, and retain top talent capable of taking on new challenges using a team approach to continuously improve our products, our services, and ourselves, resulting in long-term value creation for our stakeholders.

We hire, develop, and retain top talent capable of taking on new challenges using a team approach to continuously improve our products, our services, and ourselves, resulting in long-term value creation for our stakeholders.

We report our financial performance in four segments, or divisions:

(1) Clinical Genomics, (2) Sterilization and Disinfection Control, (3) Biopharmaceutical Development, and (4) Calibration Solutions.

(1) Sterilization and Disinfection Control, (2) Clinical Genomics, (3) Biopharmaceutical Development, and (4) Calibration Solutions.

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

Clinical Genomics

Our Clinical Genomics division develops, manufactures and sells highly sensitive, low cost, high-throughput genetic analysis tools and related consumables and services that enable genetic analysis for a broad range of diagnostic and research applications in several therapeutic areas.

Using Clinical Genomics’

MassARRAY®

system and our proprietary consumables, including chips, panels, and chemical reagent solutions, our customers can analyze DNA samples for inherited genetic disease testing, pharmacogenetics, oncology testing, infectious disease testing, and other highly differentiated applications.

The MassARRAY®

system couples mass spectrometry with end-point polymerase chain reaction ("PCR") methods, enabling highly multiplexed reactions under universal cycling conditions to provide accurate, sensitive, rapid genetic analysis.

The MassARRAY®

system is differentiated in the market by its ability to target up to 50 specific DNA variants in a single PCR reaction and run up to 384 samples on one SpectroCHIP®

array, up to eight times in a full workday, with the flexibility to process additional samples overnight.

The system allows for the testing of hundreds of mutations, including SNPs, insertions, deletions, translocations, copy number variation, and methylation makers, all in a single, efficient workflow.

Using time-of-flight mass spectrometry, genetic variants are distinguished by analysis of their individual mass, eliminating the need for fluorescence.

The system's integrated software provides a user-friendly interface to generate reports that identify targets and review spectra.

In addition to the MassARRAY®

system and related consumable products, Clinical Genomics also sells services, including equipment maintenance contracts and custom laboratory services through which our scientists help customers develop specified assay designs.

About 70% of our Clinical Genomics revenues are from consumables used on a routine basis;

sales of these products are less sensitive to general economic conditions.

Approximately 20% of our Clinical Genomics revenues are from more discretionary hardware products that are more sensitive to general economic conditions.

The remainder of Clinical Genomics revenues relate to services and support agreements.

Clinical Genomics sells its products and services predominantly to clinical labs, including large specialty, reference, and pathology labs, as well as to a variety of academic, hospital, and government facilities.

The majority of revenues are derived from customers in the United States and China.

Our Clinical Genomics products are manufactured in San Diego, California, primarily by assembling purchased subcomponents designed to our specifications into finished goods, and by processing and mixing reagents.

Our Clinical Genomics products generate revenues through direct sales, and also through independent distributors in certain regions.

Sterilization and Disinfection Control

Our Sterilization and Disinfection Control division manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization processes, including steam, gas, hydrogen peroxide, ethylene oxide, radiation, and other processes in the pharmaceutical, medical device, hospital, and dental industries.

The Sterilization and Disinfection Control division also provides related testing services, mainly to the dental industry. 

Our Sterilization and Disinfection Control division manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization, decontamination, disinfection and cleaning processes, including steam, hydrogen peroxide, ethylene oxide, radiation, and other processes in the pharmaceutical, medical device, and healthcare industries.

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

Biological indicators contain spores of certain microorganisms that provide defined resistance to specified sterilization processes.

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We grow the microbiological spores used in our biological indicator products from raw materials and apply them to convenient carriers such as small pieces of filter paper or stainless steel discs for sale.

To ensure our biological indicators accurately assess the effectiveness of sterilization, we undertake extensive quality control steps during manufacture to ensure the spores are well-characterized in terms of purity, the population of spores, and the spores’

resistance to sterilization following placement on or in the target carrier.

We offer a variety of product formats which allow our biological indicators to be used in many types of processes and environments.

We offer a variety of product formats which allow our biological indicators to be used in many types of processes and environments.

Our biological indicator products include inoculated carriers such as spore strips or discs which require post-processing transfer to a growth media;

self-contained indicators, which have the growth media already pre-packaged in crushable ampoules;

process challenge devices (“PCDs”), which increase the resistance of the biological indicators;

and growth media.

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We also offer testing services in which customers return used dental sterilization spore strips to our microbiological laboratory for testing.

Chemical indicators use a chemical reaction, generally evaluated by a color change, to assess sterilization conditions.

Type 1 process indicators measure whether direct exposure to a sterilization process has occurred.

Type 2 specific-use indicators test under a specific procedure, such as testing for air removal in a pre-vacuum steam sterilization cycle.

Type 3 single-variable indicators test a single critical variable in a sterilization process, for example, whether a given temperature has been attained.

Type 4 multivariable indicators measure two or more critical variables in a sterilization process and change color only, for example, when exposed to a given temperature for a specified period of time in a steam sterilization process.

Type 5 integrating indicators respond to all critical process parameters.

Type 6 emulating indicators respond to all critical process parameters for a specified sterilization cycle.

Biological indicators and chemical indicators are often used together to monitor processes.

Chemical indicators use a chemical change (generally determined by color) to assess the exposure to sterilization conditions.

Cleaning indicators are used to assess the effectiveness of cleaning processes, including washer-disinfectors and ultrasonic cleaners in healthcare settings.

Cleaning indicators are used to assess the effectiveness of cleaning processes, including in washer-disinfectors and ultrasonic cleaners in healthcare settings.

Cleaning is the critical first step performed prior to disinfection and sterilization.

Debris left on an instrument may interfere with microbial inactivation and can compromise disinfection or sterilization processes.

Our cleaning indicator products are manufactured by inoculating a test soil onto a stainless-steel coupon.

The test soil is designed to mimic the challenge of removing blood and tissue from surgical instruments and evaluates the effectiveness of our customers' cleaning processes. 

Our Bozeman, Montana and Munich, Germany locations manufacture our Sterilization and Disinfection Control division products, which include, among others, our EZTest®, Apex®, and Simicon biological indicators and PCDs.

Our cleaning indicator products are manufactured either by inoculating a test soil onto a stainless-steel coupon or printing an ink, imitating a test soil, onto a plastic substrate.

Test soils and inks are designed to mimic the challenge of removing blood and tissue from surgical instruments and evaluates the effectiveness of our customers' cleaning processes.

Our Bozeman, Montana and Waldems and Munich, Germany locations manufacture our Sterilization and Disinfection Control division products, which include, among others, our EZTest®, Apex®, GKE Clean-Record® Indicators, Simicon cleaning and disinfecting indicators, PCDs and other products.

Our Bozeman, Montana facility provides sterility assurance testing services to dental offices in the United States and Canada.

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We generate sales to end users through our direct sales personnel and independent distributors.

Customers include industrial users involved in pharmaceutical and medical device manufacturing, hospitals, dental offices, and contract sterilization providers. Our sterilization and disinfection control products are used in highly regulated industries and compete on the basis of quality, flexibility, cost effectiveness, and suitability for intended use.

Customers include industrial users involved in pharmaceutical and medical device manufacturing, hospitals, dental offices, and contract sterilization providers.

Our sterilization and disinfection control products are used in highly regulated industries and compete on the basis of quality, flexibility, cost effectiveness and suitability for intended use.

Clinical Genomics

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

Using Clinical Genomics’ MassARRAY® system and our proprietary consumables, including chips, panels, and chemical reagent solutions, our customers can analyze DNA samples for inherited genetic disease testing, pharmacogenetics, oncology testing, infectious disease testing, doping and toxicology testing, and other highly differentiated applications for use in research.

The MassARRAY® system couples mass spectrometry with end-point polymerase chain reaction ("PCR") methods, enabling highly multiplexed reactions under universal cycling conditions to provide accurate, sensitive, rapid genetic analysis.

The MassARRAY® system is differentiated in the market by its ability to target up to 50 specific DNA variants in a single PCR reaction and run up to 384 samples on one SpectroCHIP® array, up to eight times in a full workday, with the flexibility to process additional samples overnight.

The system allows for the testing of hundreds of mutations, including SNPs, insertions, deletions, translocations, copy number variation, and methylation makers, all in a single, efficient workflow.

Using time-of-flight mass spectrometry, genetic variants are distinguished by analysis of their individual mass, eliminating the need for fluorescence.

The system's integrated software provides a user-friendly interface to generate reports that identify targets and review spectra.

In addition to the MassARRAY® system and related consumable products, Clinical Genomics also sells services, including equipment maintenance contracts and custom laboratory services.

About 70% of our Clinical Genomics revenues are from consumables used on a routine basis;

sales of these products are less sensitive to general economic conditions.

Approximately 20% of our Clinical Genomics revenues are from more discretionary hardware products that are more sensitive to general economic conditions.

The remainder of Clinical Genomics revenues relate to services and support agreements.

Clinical Genomics sells its products and services predominantly to clinical research labs and contract research organizations, including large specialty, reference, and pathology labs, as well as to a variety of academic, hospital, and government facilities.

The majority of revenues are derived from customers in the United States and China.

Our Clinical Genomics products generate revenues through direct sales, and also through independent distributors in certain regions.

Biopharmaceutical Development

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both are primarily used in biopharmaceutical research, discovery and development, and bioprocessing applications.

Our Biopharmaceutical Development division develops and manufactures Gyrolab®

xPand and Gyrolab xPlore™

hardware and software, as well as Gyrolab Bioaffy®

consumable microfluidic disks (“CDs”), and Gyrolab kits and Rexxip®

buffers for protein analysis in Uppsala, Sweden, while PurePep®

Chorus, Sonata+ and Symphony®

hardware and software for peptide synthesis are developed and manufactured in Tucson, Arizona.

The recent addition of the PurePep®

EasyClean products, a green chemistry solution to purify peptides, adds a peptide consumables stream to our peptide synthesis business.

The division also sells service agreements to maintain instruments sold by the division.

Our Biopharmaceutical Development division develops and manufactures Gyrolab® xPand and Gyrolab xPlore™ hardware and software, as well as Gyrolab Bioaffy® consumable microfluidic disks (“CDs”), and Gyrolab kits and Rexxip® buffers for protein analysis in Uppsala, Sweden, while PurePep® Chorus and Symphony® instruments for peptide synthesis are developed and manufactured in Tucson, Arizona.

Our PurePep® EasyClean products, a green chemistry solution to purify peptides, is a consumables product line within our peptide synthesis business.

Most of the products manufactured in Sweden are typically invoiced in U.S.

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operations and foreign currency exchange, refer to Item 1A.

Risk Factors , “Foreign currency exchange rates may adversely affect our financial statements.”

About one-third of our Biopharmaceutical Development revenues are from consumables used on a routine basis;

Risk Factors , “Foreign currency exchange rates may adversely affect our financial statements.”

In our fiscal year 2024, about 42% of our Biopharmaceutical Development revenues were from consumables used on a routine basis;

sales of these products are less sensitive to general economic conditions.

Approximately 45% of revenues are from more discretionary hardware purchases that are more sensitive to general economic conditions.

The remainder of sales are related to service and support agreements.

Approximately 32% of revenues were from more discretionary hardware purchases that are more sensitive to general economic conditions.

The remainder of the division's sales relate to service and support agreements.

Historically, hardware has comprised a greater portion of the division's revenues;

softening demand for capital equipment across the biopharmaceutical industry resulted in a mix weighted more heavily toward our consumables during fiscal year 2024.

We generate sales to end users through direct sales as well as through independent foreign distributors.

Marketing activities include industry conferences, user meetings, educational webinars, and all forms of digital marketing, in addition to market sensing and capturing user requirements for new product roadmaps.

The Biopharmaceutical Development division’s market success is primarily dependent upon creating innovative, high quality products that customers choose based on available features, cost-effectiveness, and performance.

We believe we are one of the leading world-wide suppliers of protein analysis and peptide synthesis equipment to the biologics discovery and development markets.

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Our protein analysis products accelerate the development and processing of assays to obtain accurate results for pre-clinical and clinical studies as well as for upstream and downstream bioprocessing of biological therapies, thus meeting critical data and time requirements.

Our analytical protein technologies provide superior data consistency and accuracy while reducing labor and the attendant variability of more manual analysis methods.

Our analytical protein technologies provide superior data consistency and accuracy while reducing labor and the attendant variability of more manual analysis methods.

Peptide Synthesis

Our peptide synthesis solutions enable customers to automate the chemical synthesis of peptides used in the creation of peptide therapies, biomaterials, cosmetics, and general research.

Our peptide synthesizers and related consumables, including our new peptide purification consumables line, facilitate the ability to efficiently produce more complex and longer peptides with higher purity.

Our peptide synthesizers and related consumables, including our peptide purification consumables line, facilitate the ability to efficiently produce more complex and longer peptides with higher purity.

Our synthesizers are designed to support regulatory compliance for end users.

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Calibration Solutions

Our Calibration Solutions division develops, manufactures, sells, and services quality control products using principles of advanced metrology to calibrate or measure critical chemical or physical parameters such as temperature, pressure, pH, and humidity for health and safety purposes, primarily in hospital, medical device manufacturing, pharmaceutical manufacturing, and various laboratory environments.

Our Calibration Solutions division 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 environmental and process monitoring, dialysis, gas flow, air quality, and torque testing, primarily in medical device manufacturing, pharmaceutical manufacturing, laboratory, and hospital environments.

Generally, our Calibration Solutions products are used for quality control, safety validation, and regulatory compliance.

As of March 31, 2023, our Lakewood, Colorado and Hanover, Germany facilities manufacture our Calibration Solutions products, which include dialysate meters and consumables, continuous monitoring systems, data loggers, gas flow calibration and air sampling equipment, and torque testing systems represented largely by the DialyGuard®, ViewPoint®, DryCal®, DataTrace®, BGI, IBP Medical, Torquo®, and SureTorque®

The majority of our Calibration Solutions products have relatively long lifespans and their purchase by customers is discretionary, so sales are more sensitive to general economic conditions.

Service demand is driven by customers’

quality control and regulatory environments, which require products to be recalibrated or recertified periodically.

Our Lakewood, Colorado and Hanover, Germany facilities manufacture our Calibration Solutions products, which include continuous monitoring systems, dialysate meters and consumables, data loggers, gas flow calibration and air sampling equipment, and torque testing systems represented largely by the DialyGuard®, ViewPoint®, DataTrace®, DryCal®, and BGI brands.

Our Calibration Solutions products are manufactured by assembling the products from purchased components and calibrating the final products.

Our Calibration Solutions division's commercial efforts focus on offering metrology products to our customers that are required to meet regulatory requirements and quality control standards.

Service demand is driven by customers’ quality control and regulatory environments, which require products to be recalibrated or recertified periodically.

We generate sales through our direct sales personnel and independent distributors.

Continuous Monitoring

Our continuous monitoring products are used to monitor various environmental parameters such as temperature, humidity, and differential pressure to ensure that critical storage and processing conditions are maintained.

Continuous monitoring systems are used in controlled environments such as refrigerators, freezers, warehouses, laboratory incubators, clean rooms, and a number of other settings.

Continuous monitoring systems consist of wireless sensors that are placed in controlled environments which communicate with cloud and local servers to transmit and store data continuously.

A critical function of our systems is the ability to provide local alarms and notifications via e-mail, text, or telephone if established environmental conditions are exceeded.

Among the important competitive differentiators of our continuous monitoring systems are (1) their high degree of reliability and up-time;

(2) a large variety of sensor types to meet the needs of most applications;

(3) a skilled, distributed installation and service team;

and (4) a full-featured and 21 CFR Part 11 (Electronic records;

Electronic signatures) validated software program, providing extensive reporting and alarm capability.

We also offer support agreements and provide annual sensor recalibrations.

We have a strong competitive position in North America but do not yet have meaningful presence in international markets.

Key markets for our continuous monitoring systems are hospitals, pharmaceutical and medical device manufacturers, blood banks, pharmacies, and laboratory environments.

Dialysate Meters and Consumables

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The meters provide a digital readout verifying whether a dialysis machine is working within prescribed limits and delivering properly prepared dialysate.

We manufacture two styles of medical meters; those designed for use by dialysis machine manufacturers and biomedical technicians, and those used primarily by dialysis clinicians.

We manufacture two styles of medical meters;

those designed for use by dialysis machine manufacturers and biomedical technicians, and those used primarily by dialysis clinicians.

The meters for technicians are characterized by exceptional accuracy, stability and flexibility, and are used by the industry as the primary standard for the calibration of dialysis machines.

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Customers that utilize our dialysate products include dialysis facilities, medical device manufacturers, and biomedical service companies.

With technological advancements in dialysis machines that include built-in calibrators, we anticipate a reduction in sales of meters designed for clinicians.

With technological advancements in dialysis machines that include built-in calibrators, our meters designed for clinicians are subject to considerable competition in the market.

Refer to Item 1A.

Risk Factors, “Changes to dialysis methods and equipment capabilities may decrease demand for our dialysis products and negatively impact our financial statements.”

Continuous Monitoring

Continuous monitoring systems are used in controlled environments such as refrigerators, freezers, warehouses, laboratory incubators, clean rooms, and a number of other settings.

Continuous monitoring systems consist of wireless sensors that are placed in controlled environments which communicate with cloud and local servers to transmit and store data continuously.

A critical function of our systems is the ability to provide local alarms and notifications via e-mail, text, or telephone if established environmental conditions are exceeded.

Among the important competitive differentiators of our continuous monitoring systems are (1) their high degree of reliability and up-time;

(2) a large variety of sensor types to meet the needs of most applications;

(3) a skilled, distributed installation and service team;

and (4) a full-featured and 21 CFR Part 11 (Electronic records;

Electronic signatures) validated software program, providing extensive reporting and alarm capability.

We also offer support agreements and provide annual sensor recalibrations.

We have a strong, competitive position in North America but are not currently focused on international expansion.

Key markets for our continuous monitoring systems are hospitals, pharmaceutical and medical device manufacturers, blood banks, pharmacies, and laboratory environments, all located in North America.

Risk Factors, “Changes to dialysis methods and equipment capabilities may decrease demand for our dialysis products and negatively impact our financial statements.”

Our data loggers are self-contained, wireless, high precision instruments used in critical manufacturing and quality control processes in the pharmaceutical, medical device, food, and tool industries.

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In addition, data loggers can be used to validate the proper operation of laboratory or manufacturing equipment, either during installation or for annual re-certifications.

The products consist of individual data loggers, a personal computer (“PC”) interface, software, and various accessories.

Customers typically purchase a large number of data loggers along with a single PC interface and software package.

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There is competition in gas flow calibration;

however, our products are distinguished by their unique dry piston technology and industry-leading accuracy and certifications.

however, our products are distinguished by their unique dry piston technology, accuracy and industry certifications.

In the air sampling area, our technology is used primarily for the determination of particulate concentrations in air as a measure of urban or industrial air pollution, and for industrial hygiene assessments.

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While both the public and private sector continue to focus on air quality and its impact on the environment and the health of populations, technological advances in real-time monitoring have made the traditional air sampling market more limited.

In the environmental area, our particle samplers were some of the first on the market and they were recognized early-on as “reference samplers”

In the environmental area, our particle samplers were some of the first on the market and they were recognized early-on as “reference samplers” by the U.S.

Environmental Protection Agency.

This product has a competitive advantage in the market because our particle separation cyclones utilize the “federal reference method”

for the measurement of PM2.5 in ambient air and are sold to most manufacturers of ambient particulate measurement instrumentation.

This product has a competitive advantage in the market because our particle separation cyclones utilize the “federal reference method” for the measurement of PM2.5 in ambient air and are sold to many manufacturers of ambient particulate measurement instrumentation.

Torque Testing Systems

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however, the growth of this line is limited by the growth of new manufacturing facilities and packaging regulations in pharmaceutical manufacturing.

Torque products are used by many of the same customers that purchase our data loggers, offering channel synergy opportunities. 

Corporate and Other

Corporate and other consists of unallocated corporate expenses and other business activities. 

Corporate and other consists of unallocated corporate expenses and other business activities.

Other Matters Relating to our Business as a Whole

Year ended March 31, 2024 Acquisition

On November 17, 2022, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“Belyntic”

or the “Belyntic acquisition”).

We paid $4.95 million on the date of acquisition, and we expect to pay an additional $1.5 million based on the probable approval of pending patent applications expected within 36 months of the acquisition date.

The business complements our existing peptide synthesis business, part of the Biopharmaceutical Development segment, by adding a new peptide purification consumables line.

We have prepared a preliminary analysis of the valuation of net assets acquired in the Belyntic acquisition, which is subject to revision as more detailed analyses are completed.

Year Ended March 31, 2022  

We acquired 100% of the outstanding shares of GKE GmbH and SAL GmbH on October 16, 2023, and upon approval by applicable Chinese regulators, we acquired 100% of the outstanding shares of Beijing GKE Science & Technology Co.

(“GKE China,” and, together with GKE GmbH and SAL GmbH, “GKE”), effective December 31, 2023 ( the "GKE acquisition").

Total consideration for the acquisition was $87,187, net of cash and financial liabilities but inclusive of working capital adjustments.

Of the total acquisition price, approximately $9,300, at March 31, 2024 exchange rates, will be held back for a period of 18 months from the acquisition closing date as security against potential indemnification losses.

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

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

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

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

"Significant Transactions" in Item 8.

Financial Statements and Supplementary Data for further information.

Year ended March 31, 2023 Acquisition

On November 17, 2022, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“Belyntic” or the “Belyntic acquisition”) for a total cash price of $6,450, of which $4,950 was paid on the date of acquisition.

The remaining $1,500 is due to the Belyntic sellers as patent applications are approved (see Note 13.

"Commitments and Contingencies" in Item 8.

Financial Statements and Supplementary Data ).

The business complements our existing peptide synthesis business, part of the Biopharmaceutical Development segment, by adding a consumables line that can be used with the instruments we sell.

These PurePep® EasyClean products are an environmentally conscious chemistry solution to purify peptides.

Year Ended March 31, 2022 Acquisition

On October 20, 2021, we completed the acquisition of 100% of the outstanding shares of Agena Bioscience, Inc.

(“Agena”

or “the Agena Acquisition”) for adjusted cash consideration of $300.8 million.

Agena is a leading clinical genomics tools company that develops, manufactures, markets and supports proprietary instruments and related consumables that enable genetic analysis for a broad range of diagnostic and research applications. The acquisition of Agena moved our business toward the life sciences tools sector and expanded our market opportunities, particularly in Asia. Agena’s operations comprise our Clinical Genomics segment.

We finalized our valuation of the net assets acquired in the Agena Acquisition during fiscal year 2023.

Manufacturing and Materials

Most of the components, raw materials, and other supplies used in our product lines are available from a number of different suppliers.

We generally maintain multiple sources of supply, but we are dependent on sole or limited sources for certain items.

We continue to emphasize reviewing our supply base and designs for limited source suppliers that might affect our ability to supply critical products to our customers.

(“Agena” or “the Agena acquisition”) for adjusted cash consideration of $300,793.

The acquisition of Agena moved our business toward the life sciences tools sector and expanded our market opportunities, particularly in Asia.

Agena’s operations comprise our Clinical Genomics segment.

Manufacturing and Materials

Most of the components, raw materials, and other supplies used in our product lines are available from a number of different suppliers.

We generally maintain multiple sources of supply, but we are dependent on sole or limited sources for certain items, particularly in our Biopharmaceutical Division.

We continue to emphasize reviewing our supply base and designs for limited source suppliers that might affect our ability to supply critical products to our customers.

We also continue to work with our suppliers to understand existing and potential future supply chain conditions.

Our actions to mitigate the impact of supply chain disruptions, including pre-ordering components in higher than usual quantities and sourcing new vendors have been somewhat successful;

however, raw materials shortages impacted our Calibrations Solutions division through most of fiscal year 2023.

See further discussion within Item 1A.

Risk Factors, “We face numerous manufacturing and supply chain risks.

In addition, our reliance upon sole or limited sources of supply for certain materials, components and services could cause production interruptions, delays and inefficiencies .

Major Customers

Typically, no individual customer represents more than 10% of our consolidated accounts receivable or revenues. Due to large orders placed and shipped late in fiscal year 2023, one of our distributors represented approximately 18% of our trade receivables as of March 31, 2023, but we have since collected, and expect to fully collect, payments on the remaining outstanding balance.

Otherwise, no customer has represented more than 10% of our accounts receivable or revenues in the past three fiscal years. 

During fiscal year 2023, we were notified by Sema4 Holdings Corp.

("Sema4"), a customer of our Clinical Genomics division, that they are exiting the reproductive health screening business and as a result, they intend to significantly reduce the quantity of orders they place with us in the future.

Revenues from sales to Sema4 were approximately $8.2 million during the first twelve months of our ownership of Agena. Following the notice, we evaluated our business operations and enacted several cost-cutting measures in the Clinical Genomics division, including a reduction-in-force, to preserve our financial model.

These actions are expected to generate more than $4.0 million in future annualized savings.

No customer represented more than 10% of our accounts receivable or revenues for fiscal year 2024.

Typically, no individual customer represents more than 10% of our consolidated accounts receivable or revenues.

We define backlog as firm orders from customers for products and services where the order will be fulfilled within the next 12 months.

Backlog as of March 31, 2023 and 2022 was approximately $38.1 million and $56.0 million, respectively. Approximately $9 million of the fiscal year end 2022 backlog related to Sema4. Incremental temporary and permanent manufacturing employees and reduced supply chain constraints in fiscal year 2023 enabled us to maintain a lower backlog as of March 31, 2023.

Backlog as of March 31, 2024 and 2023 was approximately $25.5 million and $38.1 million, respectively.

The decrease in backlog is primarily due to decreases in the Clinical Genomics division attributable to lower customer orders in the fourth quarter of fiscal year 2024 compared to the fourth quarter of fiscal year 2023 and, to a lesser extent, abated supply chain issues in our Calibration Solutions division during fiscal year 2024 which allowed us to fulfill previously outstanding orders, partially offset by the acquisition of GKE.

Changes in our backlog are somewhat dependent upon the timing of large, recurring customer orders, which may be recognized to revenue over a period of up to twelve months, typically.

Research and Development

Research and development ("R&D") activities are primarily directed towards innovating new products and improving the quality and performance of our existing products or altering our current products to accommodate use of raw materials that are more readily available for purchase in our supply chain.

Other R&D efforts seek to develop or improve software that will be sold, leased, or marketed in the future, and to improve manufacturing efficiencies. 

Research and development ("R&D") activities are primarily directed towards innovating new products and improving the quality and performance of our existing products or altering our current products to accommodate use of raw materials that are more readily available for purchase in our supply chain.

Other R&D efforts seek to improve manufacturing efficiencies.

Intellectual Property

We own numerous patents, trademarks, and other proprietary rights, each of which is important to the various facets of our business.

Where appropriate, we seek patent protection for inventions and developments made by our personnel that are incorporated into our products or otherwise fall within our fields of interest. There can be no assurance, however, that any patent will provide adequate protection for the technology, system, product, service or process it covers.

In addition, the process of obtaining and protecting patents can be long and expensive.

We also rely upon trade secrets, technical know-how and continuing technological innovation to develop and maintain our proprietary position.

We own numerous patents, trademarks, and other proprietary rights, many of which are important to the various facets of our business.

Where appropriate, we seek patent or other intellectual property protection for inventions and developments made by our personnel that are incorporated into our products or otherwise fall within our fields of interest.

There can be no assurance, however, that any patent or other intellectual property will provide adequate protection for the technology, system, product, brand, service or process it covers.

In addition, the process of preparing, applying for, obtaining and protecting patents and other intellectual property can be long and expensive, with no assurance that a patent or other intellectual property will ultimately issue.

We rely upon trade secrets, technical know-how and continuing technological innovation to develop and maintain our proprietary position.

Our products and services are sold under various trade names, trademarks and brand names.

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Regulatory Matters

Mesa's operations are global and are affected by complex state, federal and international laws relating to healthcare, environmental protection, antitrust, anti-corruption, marketing, fraud and abuse, import and export control, product safety and efficacy, employment, privacy, government contracts acquisition regulations, and other areas.

We are required to comply with certain International Standard Organization (“ISO”) standards, United States Pharmacopeia standards and Food and Drug Administration (“FDA”) requirements in order to sell some of our products.

Our biological indicators are developed and manufactured according to ISO 11138 (Sterilization of health care products –

Biological indicators) under a quality system that complies with ISO 13485:2016 (Medical devices –

Quality management systems –

Requirements for regulatory purposes and 21 CFR 820 (Quality system regulation).

Our operations are global and are affected by complex state, federal and international laws relating to healthcare, environmental protection, antitrust, anti-corruption, marketing, fraud and abuse, import and export control, product safety and efficacy, employment, privacy, government contracts acquisition regulations, and other areas.

Our biological indicators are developed and manufactured according to ISO 11138 (Sterilization of health care products – Biological indicators) and our chemical indicators are developed and manufactured according to ISO 11140 (Sterilization of health care products – Chemical indicators), under a quality system that complies with ISO 13485:2016 (Medical devices – Quality management systems – Requirements for regulatory purposes and, as applicable, 21 CFR 820 (Quality system regulation).

Specific Calibration Solutions products are compliant under ISO 13485:2016, ISO 17025:2017, and certain 21 CFR 820 regulations.

Our Biopharmaceutical Division’s Uppsala, Sweden and Tucson, Arizona facilities are ISO 9001:2015 certified.

Clinical Genomics operates a quality management system which complies with the requirements of ISO 13485:2016.

Our Biopharmaceutical Division’s Uppsala, Sweden and Tucson, Arizona facilities are ISO 9001:2015 certified.

Clinical Genomics and GKE GmbH operate quality management systems which comply with the requirements of ISO 13485:2016.

SAL GmbH operates a testing lab and quality management system in accordance with ISO 17025:2017 in Waldems, Germany.

Several products in the Sterilization and Disinfection Control, Calibration Solutions, and Clinical Genomics divisions are classified by the FDA as medical devices subject to the provisions of the Federal Food, Drug and Cosmetic Act, which requires any company proposing to market a medical device to notify the FDA of its intention at least 90 days before doing so.

We have received permission from the FDA to market all of our products requiring such permission.

Some of our facilities are subject to FDA regulations and inspections, which may be time-consuming and costly.

This includes ongoing compliance with the FDA’s current Good Manufacturing Practices regulations that require, among other things, the systematic control of design, manufacture, packaging, storage and transportation of products.

Failure to comply with these practices renders the product adulterated and could subject us to an interruption of manufacturing and sales of these products, and possible regulatory action by the FDA.

On April 29, 2024 the FDA announced amendments to their regulations and announced a policy to phase out, over the course of four years, its general enforcement discretion approach for lab developed tests (“LDTs”).

We are still assessing the impact the regulatory changes will have on our results of operations, which may impact certain future U.S.

revenues in our Clinical Genomics division.

The manufacture and sale of medical devices is also regulated by some states.

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Foreign countries also have laws regulating medical devices sold in those countries, which require additional resources for compliance.

The time required to obtain approval from countries’

regulating bodies can be lengthy and resource consuming, particularly as each country’s requirements may differ.

The time required to obtain approval from countries’ regulating bodies can be lengthy and resource consuming, particularly as each country’s requirements may differ.

We are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal or sensitive data in the course of our business, including the EU General Data Protection Regulation which imposes strict requirements on how we collect, transmit, process and retain personal data.

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We are committed to minimizing the environmental impacts of our business operations, and we actively evaluate ways to promote rigorous sustainability standards in our operations and products, including efforts to conserve water and energy and to reduce waste.

More information about our environmental, social, and governance (“ESG”) efforts is included in our ESG brochure, which is available on our website at www.mesalabs.com/esg.

The contents of our ESG brochure are not incorporated by reference into this annual report on Form 10-K.

Human Capital Management

As a company, our vision is to Protect the Vulnerable® and we believe that our vision is achieved in large part through the strength of our workforce.

Every day, our talented employees strive to implement lean based tools to find ways to continuously improve our products and services so that we may better serve our customers.

Our people are our greatest asset, and we are proud to outline the material aspects of our human capital program.

As a company, our vision is to Protect the Vulnerable® and we believe that our vision is achieved in large part through the strength of our workforce.

Every day, our talented employees strive to implement lean based tools to find ways to continuously improve our products and services so that we may better serve our customers and create value for all our stakeholders.

We recruit top talent from all backgrounds using a combination of industry expert recruiters and recruiting tools to reach a diverse pool of candidates across race, gender, disability, and veteran statuses.

We support employees with compensation, benefits and development programs aimed at ensuring employees are productive and engaged. 

As of March 31, 2023, we had 698 employees, of whom 272 are employed for manufacturing and quality assurance, 141 for research and development and engineering, 184 for sales and marketing, and 101 for administration.

Our voluntary employee turnover decreased slightly during fiscal year 2023 compared to fiscal year 2022.

We support employees with compensation, benefits and development programs aimed at ensuring employees are productive and engaged.

As of March 31, 2024, we had 736 employees (approximately 500 in the U.S.), of whom 345 are employed for manufacturing and quality assurance, 103 for research and development and engineering, 196 for sales and marketing, and 92 for administration.

As our overall headcount has grown, we have continued to attract and retain high-performing, diverse employees at all levels of the organization.

We will continue efforts to increase employee satisfaction and retention in the future.

Our voluntary employee turnover decreased approximately 6.8 percentage points during fiscal year 2024 compared to fiscal year 2023, signaling improved employee satisfaction and engagement.

We seek to attract, develop and retain the best talent throughout Mesa.

In recent years, we have invested heavily in our talent acquisition and development processes.

We’ve implemented standardized assessment processes for candidate selection, created frameworks for formalized development and career paths, and developed mentoring systems.

We’ve also strengthened our succession planning processes with annual talent reviews and actions.

Diversity and Inclusion

We are committed to diversity and inclusion (“D&I”), and we are always working to improve in this area.

We continue to evolve our talent acquisition process to focus on diversity for both external hires and succession planning.

We make efforts to work with vendors and to consider candidates for employment from underrepresented categories.

Our global cloud-based human capital management platform enables us to more accurately track employee representation and identify how we can better enhance our diversity around the world.

We train managers annually on anti-discrimination and anti-harassment practices.

Our executive officers have committed to help drive further D&I progress during our year ending March 31, 2024 and beyond.

As of March 31, 2023, 57% of our directors are from under-represented categories.

Compensation and Benefits

We are committed to diversity and inclusion (“D&I”), and we are always working to improve in this area.

We continue to evolve our talent acquisition process to focus on diversity.

We make efforts to work with vendors and to consider candidates for employment from underrepresented categories.

Our global cloud-based human capital management platform enables us to more accurately track employee representation and identify how we can better enhance our diversity around the world.

Employee Engagement

We have established an engagement process where we leverage external expertise to develop a meaningful survey to assess what matters most to our employees.

We develop plans and communication strategies to address our key findings through a collaborative process with our employee teams.

Our goal is to drive consistent year over year improvement in engagement, which we believe will drive long-term career progression and company results.

In addition to our engagement surveys, we utilize a variety of channels to facilitate open and direct communication with our employees, including:

(i) quarterly town hall meetings with our executive team;

(ii) internally maintained websites;

and (iii) an anonymous whistleblower hotline that is advertised to our employees.

Total Rewards

We are intentional in providing fair and equitable compensation to all of our employees.

Our compensation and benefits are competitive to market and create incentives to attract and retain employees.

In determining merit increases, we evaluate individual performance—including measuring an individual's contribution to company goals and performing semi-annual performance reviews—to align financial incentives with individual contributions.

In determining merit increases, we evaluate individual performance—including measuring an individual's contribution to company goals and performing semi-annual performance reviews—to align financial incentives with individual contributions.

Our compensation package includes market-competitive pay, cash bonuses, stock-based compensation to certain levels of employees, health care and retirement benefits, paid time off, paid caregiver leave, and 401(K) matching, among other benefits.

Communication and Engagement

We believe that our success depends in part on our employees understanding how their work contributes to our company purpose and strategy.

To this end, we utilize a variety of channels to facilitate open and direct communication, including:

(i) quarterly town hall meetings with our executive team;

(ii) internally maintained websites;

(iii) an anonymous whistleblower hotline that is advertised to our employees;

and (iv) employee engagement surveys.

We also measure employee net promoter scores, which is an employee ranking of how likely they are to recommend working at Mesa to a family member or friend.

Our employee net promoter scores in fiscal year 2023 improved slightly compared to the prior year.

We have undertaken several initiatives to improve employee engagement, including implementing salary increases and leadership development programs.

Additionally, we recently launched an enhanced version of the Mesa Way , an initiative developed by a cross-functional committee of employees from all levels, divisions, and geographies in our company to connect our employees and the work we do with our purpose and values.

We will continue tracking and making efforts to improve our net promoter scores and employee engagement in the future. 

Our total rewards program:

Enables effective business operations and performance by offering comprehensive total rewards that attract, retain, and motivate our employees and promote their overall wellbeing;

Positions total direct compensation in a competitive range of the applicable market median in each jurisdiction, differentiated based on tenure, skills, and performance, and designed to attract and retain the best talent.

Health, Safety and Wellness

The health, safety and wellness of all employees is a top priority at Mesa:

We deeply embed our environmental, health and safety functions within our operations and business teams to ensure top priority and focus.

We sponsor a variety of health and wellness programs designed to enhance the physical and mental well-being of our employees around the world;

Our Employee Assistance Program provides employees and their families access to mental health, stress management and other support resources essential to navigating life changes and challenges.

Available Information

We are subject to the reporting and other information requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

We make available, free of charge, on or through our website at www.mesalabs.com under the link “Financials”

in the Investor Relations section, our annual report on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, and other information.

We are subject to the reporting and other information requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

We make available, free of charge, on or through our website at www.mesalabs.com under the link “Financials” in the Investor Relations section, our annual report on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, and other information.

Information on our website is not incorporated into this annual report on Form 10-K and is not a part of this report.

The Securities and Exchange Commission (“SEC”) also maintains a website at www.sec.gov containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Our code of ethics and Board of Directors committee charters and policies are also posted on the Investor Relations section of our website.

Our code of ethics and Board of Directors committee charters and policies are also posted on the Investor Relations section of our website.

The information on our website is not part of this or any other report Mesa files with, or furnishes to, the SEC.

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

What changed 10-K

Item 1. Business