What changed in this filing

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Item 1. Financial Statements

2025-02-04 compared with 2024-11-07 · 188 added, 135 removed, 550 unchanged (37% of the section changed)

3 unchanged sentences

(in thousands, except share amounts)

September 30,

Current assets:

59 unchanged sentences

(in thousands, except per share data)

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Cost of revenues

4 unchanged sentences

Operating income (loss)

Nonoperating expense:

Non-operating expense:

Interest expense and amortization of debt issuance costs

(Gain) on extinguishment of convertible senior notes

Other (income) expense, net

Total nonoperating (income) expense, net

Earnings (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Earnings (loss) per share:

Other expense (income), net

Total non-operating expense (income), net

(Loss) earnings before income taxes

Income tax (benefit) expense

Net (loss) income

(Loss) earnings per share:

Weighted-average common shares outstanding:

1 unchanged sentence

Mesa Laboratories, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive (Loss) Income

(in thousands)

Three Months Ended September 30, Six Months Ended September 30,

Net income (loss)

$ 3,428 $ ( 1,230 ) $ 6,816 $ ( 1,779 )

Other comprehensive income (loss):

Three Months Ended December 31,

Nine Months Ended December 31,

Net (loss) income

Other comprehensive (loss) income:

Foreign currency translation adjustments

4,632 ( 1,353 ) 5,084 ( 8,014 )

Comprehensive income (loss)

$ 8,060 $ ( 2,583 ) $ 11,900 $ ( 9,793 )

Comprehensive (loss) income

See accompanying notes to Condensed Consolidated Financial Statements.

6 unchanged sentences

5,394,491 $ 343,642 $ ( 183,494 ) $ ( 14,755 ) $ 145,393

Exercise of stock options and vesting of restricted stock units

Vesting of restricted stock units and exercise of stock options

20,858 - - - -

10 unchanged sentences

5,409,155 $ 345,999 $ ( 180,969 ) $ ( 14,303 ) $ 150,727

Exercise of stock options and vesting of restricted stock units

Vesting of restricted stock units and exercise of stock options

13,006 - - - -

10 unchanged sentences

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

Vesting of restricted stock units and exercise of stock options

13,780 23 - - 23

Tax withholding on vesting of restricted stock units

( 32 ) ( 3 ) - - ( 3 )

Dividends paid, $ 0.16 per share

- - ( 869 ) - ( 869 )

Stock-based compensation expense

- 3,239 - - 3,239

Foreign currency translation

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

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

December 31, 2024

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

Number of Shares

1 unchanged sentence

March 31, 2023

Exercise of stock options and vesting of restricted stock units

5,369,466 $ 332,076 $ 74,199 $ ( 12,795 ) $ 393,480

Vesting of restricted stock units and exercise of stock options

20,074 52 - - 52

Tax withholding on vesting of restricted stock units

( 5,260 ) ( 712 ) - - ( 712 )

Dividends paid, $ 0.16 per share

- - ( 859 ) - ( 859 )

Stock-based compensation expense

- 2,968 - - 2,968

Foreign currency translation

- - - ( 6,661 ) ( 6,661 )

- - ( 549 ) - ( 549 )

June 30, 2023

Exercise of stock options and vesting of restricted stock units

5,384,280 $ 334,384 $ 72,791 $ ( 19,456 ) $ 387,719

Vesting of restricted stock units and exercise of stock options

7,464 304 - - 304

Tax withholding on vesting of restricted stock units

( 18 ) ( 2 ) - - ( 2 )

Dividends paid, $ 0.16 per share

- - ( 862 ) - ( 862 )

Stock-based compensation expense

- 3,183 - - 3,183

Foreign currency translation

- - - ( 1,353 ) ( 1,353 )

- - ( 1,230 ) - ( 1,230 )

September 30, 2023

5,391,726 $ 337,869 $ 70,699 $ ( 20,809 ) $ 387,759

Vesting of restricted stock units and exercise of stock options

2,415 2 - - 2

Tax withholding on vesting of restricted stock units

( 98 ) ( 12 ) - - ( 12 )

Dividends paid, $ 0.16 per share

- - ( 862 ) - ( 862 )

Stock-based compensation expense

- 2,993 - - 2,993

Foreign currency translation

- - - 10,965 10,965

- - 2,116 - 2,116

December 31, 2023

5,394,043 $ 340,852 $ 71,953 $ ( 9,844 ) $ 402,961

*Accumulated Other Comprehensive Income (Loss).

3 unchanged sentences

(in thousands)

Six Months Ended September 30,

Nine Months Ended December 31,

Cash flows from operating activities:

Net income (loss)

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

Adjustments to reconcile net income to net cash from operating activities:

Depreciation of property, plant and equipment

3 unchanged sentences

Amortization of step-up in inventory basis

Foreign currency adjustments

Cash from changes in operating assets and liabilities:

6 unchanged sentences

Cash flows from investing activities:

Acquisitions, net of cash acquired

Purchases of property, plant and equipment

6 unchanged sentences

Other financing, net

Net cash (used in) financing activities

Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

13 unchanged sentences

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

As of September 30, 2024 , we managed our operations in four reportable segments, or divisions:

As of December 31, 2024 , we managed our operations in four reportable segments, or divisions:

● Sterilization and Disinfection Control - manufactures and sells biological, chemical and cleaning indicators used to assess the effectiveness of sterilization, decontamination, disinfection, and cleaning processes in the medical device, pharmaceutical, and healthcare industries.

16 unchanged sentences

References in this quarterly report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively.

Prior Period Reclassifications

For the nine months ended December 31, 2024, certain prior period amounts in our unaudited Condensed Consolidated Statements of Operations related to cash interest payments on acquisition holdback liabilities and non-cash debt issuance cost amortization have been reclassified out of "Other expense (income), net" and into "Interest expense and amortization of debt issuance costs." Additionally, prior period third -party costs related to the repurchase of a portion of our convertible senior notes have been reclassified out of "Other expense (income), net" and are reflected within the "(Gain) on extinguishment of convertible senior notes." These reclassifications have not resulted in any change to "Non-operating expense (income), net" nor in any material change to other amounts presented in our unaudited condensed consolidated financial statements for the three and nine months ended December 31, 2024.

Risks and Uncertainties

1 unchanged sentence

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

The global business environment continues to be impacted by cost pressures, the overall effects of economic uncertainty on customers' purchasing patterns, high interest rates, and other factors.

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

The global business environment continues to be impacted by cost pressures, the overall effects of economic uncertainty, and other factors.

Changes in, and the resulting effects of, potential governmental stimulus or fiscal and monetary policies, interest rates, foreign currency values, supply chains, demand for goods and services, a global or regional recession, or other circumstances cannot be reliably predicted.

Actual results could differ from our estimates.

5 unchanged sentences

The ASU is effective for fiscal years beginning after December 15, 2023 ( our fiscal year 2025 for annual periods) and interim periods within fiscal years beginning after December 15, 2024 ( our fiscal year 2026 for interim periods) on a retrospective basis.

We do not expect the adoption of ASU 2023 - 07 to have a material impact on our consolidated financial statements.

Other than presentation changes to our segment footnote, we do not expect the adoption of ASU No.

2023 - 07 to have a material impact on our consolidated financial statements.

In December 2023, the FASB issued ASU No.

2 unchanged sentences

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

The guidance is effective for public business entities for fiscal years beginning after December 15, 2024 ( our fiscal year 2026 ), with early adoption permitted.

The guidance is effective for public business entities for fiscal years beginning after December 15, 2024 ( our fiscal year 2026 ), with early adoption and prospective or retrospective application permitted.

Other than presentation of additional disaggregated data in our income tax footnote disclosures for annual periods, we do not expect the adoption of ASU No.

2023 - 09 to have a material impact on our consolidated financial statement.

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

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

Disaggregation of Income Statement Expenses." ASU No.

2024 - 03 requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

The ASU is effective for fiscal years beginning after December 15, 2026 ( our fiscal year 2028 for annual periods) and interim periods within fiscal years beginning after December 15, 2027 ( our fiscal year 2029 for interim periods), with early adoption and prospective or retrospective application permitted.

We are currently assessing the effect the adoption of this standard will have on our consolidated financial statement disclosures.

4 unchanged sentences

(“GKE China” and together with GKE GmbH and SAL GmbH, “GKE” or the "GKE acquisition").

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 chemical indictors are complementary to SDC's strengths in biologic indicators as chemical and biologic indicators are used in the same sterility validation workflows.

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

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

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

2 unchanged sentences

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

Of the total acquisition price, approximately $ 9,700 (at September 30, 2024 exchange rates) is being held back until April 2025 in accordance with the purchase agreement as security against potential indemnification losses ("GKE holdback").

Of the total acquisition price, approximately $ 9,000 (at December 31, 2024 exchange rates) is being held back until April 2025 in accordance with the purchase agreement as security against potential indemnification losses ("GKE holdback").

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

During the three and six months ended September 30, 2024 , GKE's operations contributed the following amounts to our consolidated results of operations:

During the three and nine months ended December 31, 2024 , GKE's operations contributed the following amounts to our consolidated results of operations:

Three Months Ended

Six Months Ended

September 30, 2024

Nine Months Ended

December 31, 2024

$ 6,854 $ 18,971

5 unchanged sentences

Hardware sales may be offered with accompanying perpetual or annual software licenses, which in some cases are required for the hardware to function.

Consumables are typically used on a one -time basis and require frequent replacement in our customers' operating cycles.

Consumables are single-use products and require 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.

2 unchanged sentences

We also offer maintenance, calibration and testing services.

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

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

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

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

The following tables present disaggregated revenues for the three and six months ended September 30, 2024 and 2023 , respectively:

Three Months Ended September 30, 2024

The following tables present disaggregated revenues for the three and nine months ended December 31, 2024 and 2023 , respectively:

Three Months Ended December 31, 2024

Sterilization and Disinfection Control (1)

8 unchanged sentences

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

( 1 ) Revenues of $ 5,863 from GKE are included in the Sterilization and Disinfection Control division during the three months ended September 30, 2024 .

Three Months Ended September 30, 2023

( 1 ) Revenues of $ 6,854 from GKE are included in the Sterilization and Disinfection Control division during the three months ended December 31, 2024 .

Three Months Ended December 31, 2023

Sterilization and Disinfection Control (1)

8 unchanged sentences

$ 19,338 $ 12,546 $ 9,430 $ 12,159 $ 53,473

Six Months Ended September 30, 2024

( 1 ) Revenues of $ 3,837 from GKE are included in the Sterilization and Disinfection Control division during the three months ended December 31, 2023, following the acquisition of GKE GmbH and SAL GmbH on October 16, 2023.

Nine Months Ended December 31, 2024

Sterilization and Disinfection Control (1)

8 unchanged sentences

$ 68,669 $ 35,570 $ 36,112 $ 38,492 $ 178,843

( 1 ) Revenues of $ 12,117 from GKE are included in the Sterilization and Disinfection Control division during the six months ended September 30, 2024 .

Six Months Ended September 30, 2023

( 1 ) Revenues of $ 18,971 from GKE are included in the Sterilization and Disinfection Control division during the nine months ended December 31, 2024 .

Nine Months Ended December 31, 2023

Sterilization and Disinfection Control (1)

8 unchanged sentences

$ 52,345 $ 41,464 $ 28,526 $ 34,948 $ 157,283

( 1 ) Revenues of $ 3,837 from GKE are included in the Sterilization and Disinfection Control division during the nine months ended December 31, 2023, following the acquisition of GKE GmbH and SAL GmbH on October 16, 2023.

Revenues from external customers are attributed to individual countries based upon the locations to which the products are shipped or exported, or locations where services are performed, as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

United States

4 unchanged sentences

$ 62,840 $ 53,473 $ 178,843 $ 157,283

Other than China, no foreign country exceeded 10% of total revenues for the three and six months ended September 30, 2024 and 2023 .

Other than China, no foreign country exceeded 10% of total revenues for the three and nine months ended December 31, 2024 and 2023 .

Contract Balances

6 unchanged sentences

Contract liabilities as of March 31, 2024

Prior year liabilities recognized in revenues during the six months ended September 30, 2024

Contract liabilities added during the six months ended September 30, 2024, net of revenues recognized

Contract liabilities as of September 30, 2024

Prior year liabilities recognized in revenues during the nine months ended December 31, 2024

Contract liabilities added during the nine months ended December 31, 2024, net of revenues recognized

Contract liabilities as of December 31, 2024

Fair Value Measurements

5 unchanged sentences

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

No customers accounted for more than 10% of total trade receivables as of September 30, 2024 .

No customers accounted for more than 10% of total trade receivables as of December 31, 2024 .

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

"Indebtedness" for further information.

As of September 30, 2024 , we had remaining outstanding $ 97,500 aggregate principal amount of the Notes.

As of December 31, 2024 , we had remaining outstanding $ 97,500 aggregate principal amount of the Notes.

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

1 unchanged sentence

The estimated fair value and carrying value of the Notes were as follows:

September 30, 2024

December 31, 2024

March 31, 2024

4 unchanged sentences

$ 97,163 $ 94,819 $ 171,198 $ 163,013

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

We expect to pay approximately $ 9,700 (at September 30, 2024 exchange rates) for the GKE holdback in April 2025.

We estimate the discounted fair value of consideration held back to be approximately $ 9,400 as of September 30, 2024 based on Level 3 inputs from the acquisition, including discount rate estimates.

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

We expect to pay approximately $ 9,000 (at December 31, 2024 exchange rates) for the GKE holdback in April 2025.

We estimate the discounted fair value of consideration held back to be approximately $ 8,900 as of December 31, 2024 based on Level 3 inputs from the acquisition, including discount rate estimates.

We adjust the estimated fair value at each reporting period through earnings.

During fiscal year 2023, we acquired substantially all of the assets and certain liabilities of Belyntic GmbH’s peptide purification business (“the Belyntic acquisition”).

The Belyntic acquisition obligates us to pay contingent consideration of up to $ 1,500 cash upon regulatory approval of certain patent applications (see Note 11.

"Commitments and Contingencies"), of which $ 750 has not yet been paid.

We are obligated to pay contingent consideration of up to $ 1,500 cash upon regulatory approval of certain patent applications.

We estimate the fair value of the remaining contingent consideration is $ 675 , using Level 3 inputs and a probability-weighted outcome analysis based on our expectations of patent approval, leveraging our historical experience and expert input.

2 unchanged sentences

Fair values of such assets and liabilities require measurement using Level 3 inputs.

We recorded no impairments during the three and six months ended September 30, 2024 or 2023 .

There were no transfers between the levels of the fair value hierarchy during the three months ended three and six months ended September 30, 2024 .

We recorded no impairments during the three and nine months ended December 31, 2024 or 2023 .

There were no transfers between the levels of the fair value hierarchy during the three and nine months ended December 31, 2024 .

Supplemental Information

Inventories consisted of the following:

September 30, 2024

December 31, 2024

March 31, 2024

7 unchanged sentences

Prepaid expenses and other current assets consisted of the following:

September 30, 2024

December 31, 2024

March 31, 2024

6 unchanged sentences

Accrued payroll and benefits consisted of the following:

September 30, 2024

December 31, 2024

March 31, 2024

6 unchanged sentences

$ 13,919 $ 9,935

The increase in bonus payable is primarily due to our financial performance in fiscal year 2025 compared to fiscal year 2024.

Other accrued expenses consisted of the following:

September 30, 2024

December 31, 2024

March 31, 2024

6 unchanged sentences

$ 22,351 $ 12,858

The increase in other accrued expenses is primarily due to the reclassification of the held back GKE acquisition-related consideration from noncurrent liabilities.

The increase in other accrued expenses is primarily due to the reclassification of held back Belyntic and GKE acquisition-related consideration from noncurrent liabilities.

Other noncurrent liabilities consisted of the following:

September 30, 2024

December 31, 2024

March 31, 2024

4 unchanged sentences

$ 12,453 $ 15,613

The increase in operating lease liabilities is primarily attributable to new a new right-of-use leased facility associated with the manufacturing and administrative office facilities used by our Biopharmaceutical Development division in Uppsala, Sweden.

Three Months Ended September 30,

Six Months Ended September 30,

The increase in operating lease liabilities is primarily attributable to the right of use asset associated with an operating lease for a facility used by our Biopharmaceutical Development for manufacturing and administrative purposes.

Three Months Ended December 31,

Nine Months Ended December 31,

Depreciation expense in cost of revenues

4 unchanged sentences

$ 1,106 $ 1,074 $ 4,028 $ 2,899

The increase in depreciation expense for the three and six months ended September 30, 2024 is primarily due to GKE's operations, which included $ 321 and $ 625 of depreciation expense, respectively.

The increase in depreciation expense for the three and nine months ended December 31, 2024 is primarily due to GKE's operations, which included $ 225 and $ 850 of depreciation expense, respectively.

Goodwill and Intangible Assets, Net

Finite-lived intangible assets consisted of the following:

September 30, 2024

December 31, 2024

March 31, 2024

12 unchanged sentences

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

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Amortization in cost of revenues

4 unchanged sentences

$ 4,391 $ 7,975 $ 13,002 $ 22,380

For the following fiscal years ending March 31, amortization expense is estimated as follows, based on foreign currency exchange rates as of September 30, 2024:

The decrease in amortization expense is attributable to impairment losses recorded during the fourth quarter of fiscal year 2024 related to intangible assets within our Clinical Genomics division.

For the following fiscal years ending March 31, future amortization expense is estimated as follows, based on foreign currency exchange rates as of December 31, 2024:

Amortization Expense

9 unchanged sentences

( 1,994 ) ( 71 ) ( 849 ) ( 30 ) ( 2,944 )

September 30, 2024

December 31, 2024

$ 77,436 $ 16,869 $ 45,666 $ 37,181 $ 177,152

9 unchanged sentences

Make certain changes to the financial covenants.

In conjunction with the amendment and restatement of the Credit Facility during the six months ended September 30, 2024, we incurred $ 1,987 of customary lender fees and debt issuance costs paid to third parties, of which $ 1,242 is related to the Revolver and $ 745 is related to the Term Loan.

In conjunction with the amendment and restatement of the Credit Facility during the nine months ended December 31, 2024, we incurred $ 1,987 of customary lender fees and debt issuance costs paid to third parties, of which $ 1,242 is related to the Revolver and $ 745 is related to the Term Loan.

The fees are being amortized to interest expense through maturity.

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

The interest rate on borrowings under our line of credit as of September 30, 2024 was 8.4 %.

The financial covenants in the Credit Facility as amended include a maximum leverage ratio of 4.50 to 1.00 for the first five testing dates on which amounts under the Revolver are outstanding;

4.0 to 1.0 on each of the sixth, seventh, eighth, and ninth testing dates;

and 3.5 to 1.0 on each testing date following the ninth testing date.

The weighted average interest rate on borrowings under the Credit Facility as of December 31, 2024 was 7.5 %.

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

4.0 to 1.0 on each of the testing dates between March 31, 2025 and March 31, 2026;

and 3.5 to 1.0 on each testing date thereafter.

The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to 1.0 and a minimum senior net leverage ratio of 3.5 to 1.

Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes to our business as defined in the contract, engage in certain transactions with affiliates, or conduct asset sales.

As of September 30, 2024 , we were in compliance with all covenants under the Credit Facility.

As of December 31, 2024 , we were in compliance with all covenants under the Credit Facility.

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

During the three and six months ended September 30, 2024 , we made required quarterly principal payments on the Term Loan of $ 937 and $ 1,875 , respectively.

During the three and nine months ended December 31, 2024 , we made required quarterly principal payments on the Term Loan of $ 938 and $ 2,813 , respectively.

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

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

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

Remainder of 2025

1 unchanged sentence

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

September 30, 2024

December 31, 2024

March 31, 2024

Term Loan ( 8.4 % as of September 30, 2024)

Term Loan ( 7.5 % as of December 31, 2024)

discount and debt issuance costs

1 unchanged sentence

Noncurrent portion

The effective interest rate on the Term Loan at the time of borrowing was 8.13 %.

As of September 30, 2024 , the outstanding balance under the Revolver was $ 35,500 and $ 89,500 was available for borrowing.

Subsequent to September 30, 2024 , we repaid an additional $ 4,500 on the Revolver.

As of December 31, 2024 , the outstanding balance under the Revolver was $ 27,000 , and $ 98,000 was available for borrowing.

Subsequent to December 31, 2024 , we repaid an additional $ 4,500 on the Revolver.

We are obligated to pay quarterly unused commitment fees of between 0.20 % and 0.35 % of the Revolver’s aggregate principal amount, based on our leverage ratio.

The balance of unamortized customary lender fees related to the Revolver, including fees from the original debt issuance and all subsequent amendments and restatements, was $ 1,353 and $ 321 as of September 30, 2024 and March 31, 2024, respectively.

The balance of unamortized customary lender fees related to the Revolver, including fees from the original debt issuance and all subsequent amendments and restatements, was $ 1,278 and $ 321 as of December 31, 2024 and March 31, 2024, respectively.

Convert ible Notes

4 unchanged sentences

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

We accounted for the partial repurchase of the Notes as a debt extinguishment, which resulted in the recognition of a gain on extinguishment of $ 3,197 in other income on the Condensed Consolidated Statements of Operations during the six months ended September 30, 2024.

As of September 30, 2024 , $ 97,500 in aggregate principal amount of the Notes remained outstanding, which we intend to pay using a combination of cash on hand and a draw on our Revolver.

We accounted for the partial repurchase of the Notes as a debt extinguishment, which resulted in the recognition of a gain on extinguishment of $ 2,887 in other income on the unaudited Condensed Consolidated Statements of Operations during the nine months ended December 31, 2024.

As of December 31, 2024 , $ 97,500 in aggregate principal amount of the Notes remained outstanding, which we intend to pay using a combination of cash on hand and a draw on our Revolver.

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

The circumstances necessary for conversion were not met during the three or six months ended September 30, 2024 .

The circumstances necessary for conversion were not met during the three or nine months ended December 31, 2024 .

The Notes will become convertible at any time from and including April 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date.

As of September 30, 2024 , the Notes were classified as a current liability on our Condensed Consolidated Balance Sheets.

The if-converted value of the Notes did not exceed the principal balance as of September 30, 2024 .

As of December 31, 2024 , the Notes were classified as a current liability on our unaudited Condensed Consolidated Balance Sheets.

The if-converted value of the Notes did not exceed the principal balance as of December 31, 2024 .

The net carrying amount of the Notes was as follows:

September 30, 2024

December 31, 2024

March 31, 2024

6 unchanged sentences

We recognized interest expense on the Notes as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Coupon interest expense at 1.375%

7 unchanged sentences

Stock-Based Compensation

During the six months ended September 30, 2024 , we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the Mesa Laboratories, Inc.

During the nine months ended December 31, 2024 , we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the Mesa Laboratories, Inc.

Amended and Restated 2021 Equity Incentive Plan, which authorizes the issuance of 660 shares of common stock to eligible participants.

Stock-based compensation expense is included in cost of revenues, selling, general and administrative, and research and development expense in the accompanying unaudited Condensed Consolidated Statements of Operations.

The following is a summary of RSU and PSU award activity for the six months ended September 30, 2024 :

The following is a summary of RSU and PSU award activity for the nine months ended December 31, 2024 :

Time-Based Restricted Stock Units

12 unchanged sentences

( 36 ) 169.40 ( 12 ) 302.06

Outstanding as of September 30, 2024

Outstanding as of December 31, 2024

150 $ 106.44 85 $ 165.75

1 unchanged sentence

Outstanding time-based RSUs vest and settle in shares of our common stock on a one -for- one basis.

The majority of RSUs granted to employees during the six months ended September 30, 2024 vest in equal installments on the first, second, and third anniversaries of the grant date.

RSUs granted to non-employee directors during the six months ended September 30, 2024 vest one year from the grant date.

The majority of RSUs granted to employees during the nine months ended December 31, 2024 vest in equal installments on the first, second, and third anniversaries of the grant date.

RSUs granted to non-employee directors during the nine months ended December 31, 2024 vest one year from the grant date.

We generally recognize the expense relating to RSUs, net of estimated forfeitures, on a straight-line basis over the vesting period.

3 unchanged sentences

We recognize the expense relating to the performance-based RSUs based on the probable outcome of achievement of the performance targets on a straight-line basis over the service period.

During the six months ended September 30, 2024, the Compensation Committee of the Board of Directors created a plan to award 41 PSUs at target (“the FY25 PSUs”) to eligible employees.

During the nine months ended December 31, 2024, the Compensation Committee of the Board of Directors created a plan to award 41 PSUs at target (“the FY25 PSUs”) to eligible employees.

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

3 unchanged sentences

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

The following is a summary of stock option award activity for the six months ended September 30, 2024 :

The following is a summary of stock option award activity for the nine months ended December 31, 2024 :

Stock Options

9 unchanged sentences

Awards exercised

Outstanding as of September 30, 2024

Outstanding as of December 31, 2024

178 $ 184.55 2.6 $ 287

Earnings (Loss) Per Share

The following table presents a reconciliation of the denominators used in the computation of basic and diluted earnings (loss) per share:

Three Months Ended September 30,

Six Months Ended September 30,

Net income (loss) available for shareholders

(Loss) Earnings Per Share

The following table presents a reconciliation of the denominators used in the computation of basic and diluted (loss) earnings per share:

Three Months Ended December 31,

Nine Months Ended December 31,

Net (loss) income available for shareholders

$ ( 1,676 ) $ 2,116 $ 5,140 $ 337

1 unchanged sentence

5,429 5,393 5,413 5,384

Dilutive effect of stock options

Dilutive effect of RSUs

1 unchanged sentence

5,429 5,396 5,464 5,394

Basic earnings (loss) per share

Basic (loss) earnings per share

$ ( 0.31 ) $ 0.39 $ 0.95 $ 0.06

Diluted earnings (loss) per share

Diluted (loss) earnings per share

$ ( 0.31 ) $ 0.39 $ 0.94 $ 0.06

2 unchanged sentences

Diluted EPS does not consider the impact of potentially dilutive securities in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect in such cases.

The following stock awards were excluded from the calculation of diluted EPS:

Three Months Ended September 30,

Six Months Ended September 30,

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

Three Months Ended December 31,

Nine Months Ended December 31,

Assumed conversion of the Notes

4 unchanged sentences

750 885 556 831

Shares underlying the Notes were excluded from the diluted EPS calculation for the three and six months ended September 30, 2024 and 2023 as the impact of the assumed conversion of the Notes calculated under the if-converted method was antidilutive.

The decrease in assumed conversion of the Notes is related to the partial repayment of the Notes that occurred during the six months ended September 30, 2024 (see Note 7.

Shares underlying the Notes were excluded from the diluted EPS calculation for the three and nine months ended December 31, 2024 and 2023 as the impact of the assumed conversion of the Notes calculated under the if-converted method was antidilutive.

The decrease in assumed conversion of the Notes is related to the partial repayment of the Notes that occurred during the nine months ended December 31, 2024 (see Note 7.

"Indebtedness").

We reported an income tax provision as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Income tax expense (benefit)

Three Months Ended December 31,

Nine Months Ended December 31,

Income tax (benefit) expense

$ ( 541 ) $ ( 170 ) $ 360 $ ( 653 )

4 unchanged sentences

There is a potential for volatility in the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which they relate, changes in tax laws and foreign tax holidays, settlement with taxing authorities, and foreign currency fluctuations.

The change in the effective tax rate for both the three and six months ended September 30, 2024 compared to the prior year periods is primary due to the valuation allowance established on the US deferred taxes during fiscal year 2024.

The effective tax rate for both the three and the six months ended September 30, 2024 differed from the statutory federal rate of 21 % primarily due to the valuation allowance established on the US deferred taxes during fiscal year 2024.

The change in the effective tax rate for both the three and nine months ended December 31, 2024 compared to the prior year periods is primarily due to the valuation allowance established on the US deferred taxes during fiscal year 2024.

The effective tax rate for both the three and the nine months ended December 31, 2024 differed from the statutory federal rate of 21 % primarily due to the valuation allowance established on the US deferred taxes during fiscal year 2024.

Commitments and Contingencies

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

As of September 30, 2024 , we are not party to any legal proceeding that management believes could have a material adverse effect on our unaudited consolidated financial position, results of operations, or cash flows.

We expect to pay approximately $ 9,700 (at September 30, 2024 exchange rates) for the GKE holdback in April 2025, pending adjustments for potential indemnification losses that may arise.

The liability is recorded at its discounted fair value of $ 9,400 in other accrued expenses on our unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 .

As of December 31, 2024 , we are not party to any legal proceeding that management believes could have a material adverse effect on our unaudited consolidated financial position, results of operations, or cash flows.

We expect to pay approximately $ 9,000 (at December 31, 2024 exchange rates) for the GKE holdback in April 2025, pending adjustments for potential indemnification losses that may arise.

The liability is recorded at its discounted fair value of $ 8,900 in other accrued expenses in our unaudited Condensed Consolidated Balance Sheets as of December 31, 2024 .

As part of the Belyntic acquisition, we agreed to pay the sellers a contingency based upon approval of contractually specified patents.

The estimated fair value of the probable remaining contingent consideration was $ 650 as of September 30, 2024 .

The estimated fair value of the probable remaining contingent consideration was $ 675 as of December 31, 2024 .

On January 2, 2025, a notice of allowance was issued for one of the two remaining pending patents, and we expect to pay the Belyntic sellers $ 563 for the patent within fiscal year 2025 or early in fiscal year 2026, depending upon the final approval date.

We expect the other remaining pending patent will likely be approved within one year of December 31, 2024.

S egment Information

The following tables set forth our segment information:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Revenues (a):

28 unchanged sentences

5,779 ( 67 ) 14,867 ( 791 )

Nonoperating expense, net

Non-operating expense (income), net

7,996 ( 2,013 ) 9,367 ( 475 )

Earnings (loss) before income taxes

(Loss) earnings before income taxes

$ ( 2,217 ) $ 1,946 $ 5,500 $ ( 316 )

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

Includes post-acquisition GKE results during the three and six months ended September 30, 2024 .

Includes post-acquisition GKE results during the three and nine months ended December 31, 2024 and 2023 beginning on October 16, 2023 for GKE GmbH and SAL GmbH, and beginning on January 1, 2024 for GKE China.

1 unchanged sentence

Our chief operating decision maker is not provided with and does not regularly review any other segment asset information.

September 30,

Sterilization and Disinfection Control

7 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements