MLAB

Image source: The Motley Fool. Monday, Aug. 10, 2026 at 4:30 p.m. ET President and Chief Executive Officer - Siddhartha Kadia Vice President and Chief Financial Officer - John Sakys Investor Relations - Doug Farrell Operator: Good afternoon and thank you for joining us to discuss Mesa Laboratories First Quarter 2027 Earnings Call. [Operator Instructions] A replay of this webcast will also be made available on our website after the call. [Operator Instructions] As a reminder, this conference is being recorded. Our speakers today are Siddhartha Kadia, President and Chief Executive Officer, John Sakys, Vice President and Chief Financial Officer, and Doug Farrell, Investor Relations. It is now my pleasure to introduce Doug Farrell. Thank you. Mr. Farrell, you may begin. Thank you, Jen. Doug Farrell: Please be advised that our remarks today, including answers to your questions, include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward looking statements include those relating to future financial and operational results, future taxes, future strategic and operational initiatives, new products, and our future net leverage ratio. Words such as seek, expect, plan, intend, anticipate, believe, could, should, estimate, may, project, and target, and similar expressions may also identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Those include risks relating to market acceptance of and demand for our products. Our ability to execute on strategic, commercial, and operational initiatives and achieve the anticipated benefits from those initiatives. Potential issues relating to our manufacturing, fulfillment, supply chain performance, possible changes in customer purchasing patterns, the development and success of new products and product launches, regulatory matters, the effect on our business of capital allocation decisions and debt reduction initiatives, expected tax rates, national and global economic conditions, and other factors described in our filings with the Securities and Exchange Commission, which are incorporated by reference. We disclaim any obligation to update these forward-looking statements. In addition, we will provide certain non-GAAP financial information in this call, including adjusted operating income on a trailing 12-month basis. The relevant definitions and GAAP reconciliations may be found in our earnings release and the supplemental reconciliation posted on the investor relations section of our website at mesalabs.com. With that, let me turn the call over to Mesa's CEO Siddhartha Kadia. Siddhartha Kadia: And good afternoon everyone. This is my first earnings call as Mesa's CEO and I want to use it the way I intend to use every call going forward. To be direct with you about what's working, what's not yet working, and what I have decided to do about it. I've learned a lot in my first 100 days, and I'm excited about what I've found. Excited enough that I wanted to talk with you earlier than we had originally planned. We had committed to a first call alongside our second quarter results this fall. I didn't want to wait that long. So, because it is early, think of today as the appetizer, not the dinner. Dinner comes in the fall at our next earnings call when I put full year guidance in front of you alongside first half results. Because this is our first call together, let me tell you up front how I would like you to hear it. My take on this company in one sentence, Mesa is a set of durable, regulation embedded franchises with real and growing earnings power that had fixable execution problems. I intend to run this company and this call with the level of directness you can set your calendar by. Here's the shape of what you'll hear today. Three areas I'll update you on. A direct look at where we fell short this quarter and why. Where we are investing for growth, and the shape of our margin and balance sheet. I am going to keep this at an altitude, a CEO should. The themes, the diagnosis, and the direction, and let John Sakys, my CFO, take you into the bridge building. So the handful of things I most want you to remember, don't get lost in numbers. I did not spend my first 100 days writing a vision statement. I spent them inside the company. I have personally visited every Mesa site with more than 25 employees. And I have now met with more than half of our employees worldwide. I attended our global sales meeting with 150 members of our commercial team and I spent time with dozens of our key customers across the United States, Europe, and Asia. My engagement is not a listening tour. It is how I'm installing what I want this company to run on, a growth mindset and an obsession with winning more loyal customers. Loyal customers are the most valuable asset a business like ours can build. They buy again, they buy more, and they tell others. I did not come in with a thesis I needed the data to confirm. I came in to find out what's actually true about this company. You'll see one area, sterilization and disinfection controls, SDC, where reported revenue was soft and where I want to share a more precise diagnosis than the one you've heard before. I'm going to walk you to exactly what I found because owning what I find is the job. My review didn't only surface problems in SDC, it also revealed opportunities. We weren't moving on fast enough. The clearest one, accelerating the next generation Gyrolab platform at the heart of our BPD franchise. I'll come back to that. These are not vague intentions, they are decisions I have made. If you take 3 things away from this call, let it be this. One, the core operating model is working And fiscal years and trailing 12 months, not the quarters, are the truth. Biopharmaceutical Development, the business that declined almost 30% a quarter ago, grew 5% year over year. Calibration Solutions grew 7.6% year over year, continuing a steady contribution to Mesa's overall business. These are recurring regulation-driven businesses, and quarter-to-quarter revenues will fluctuate. SDC reported revenue was down this quarter. A delivery reliability issue, not a demand issue. And I'll walk you through it in a moment. Measure the way this franchise should be measured by fiscal year, and trailing 12 months, SDC grew from $93 million in fiscal 2025 to over $101 million in fiscal 2026 and stands at roughly $101 million on a trailing basis today, up about 5% from a year ago. Quarterly results can fluctuate based on fulfillment timing, But the underlying health of the franchise is best reflected in our trailing 12-month revenue and adjusted operating income, and both continue to move in the right direction. The second thing to take away from this call, the portfolio is being actively managed. Every business in this portfolio has to earn its place on returns, on margin profile, and on strategic fit. Our core franchises, SDC, BPD, and Calibration Solutions are strong, high-margin businesses we will invest behind. Clinical Genomics is being managed deliberately, and this quarter reflects that discipline, essentially flat in line with what we expected. And finally, the third thing, from here, the work is execution and focus, not acquisition. We made real progress on the balance sheet. We paid down nearly $9 million of debt this quarter. And our net leverage ratio as defined under the terms of our credit facility stands at 1.85x. And we intend to keep strengthening it from here into the range of 1.5 to 1.75 turns as we move through this fiscal year. But I want to be clear about where my focus is, because it is not on acquisition. The near-term value in this company's self-help, executing the businesses we already own, and deliberately reallocating capital, effort, and management mindshare towards the part of the portfolio that offer the most profitable growth. At our next earnings call in November, alongside first half results, I'll give you a full year guidance. That's a commitment, and I expect to be held to it. Our broader portfolio and capital allocation work continues and I'll bring you into it when it's ready. I'll now discuss the results of each of our franchises. Let me start with BPD. BPD grew 5% organically this quarter versus a decline of almost 30% in the same business just a quarter ago. That's an encouraging swing, but I want to be precise about what it is and what it isn't because you should not take one quarter as a victory lap. Is this a comp or is this a fix? The honest answer is that a meaningful part of this quarter reflects easier comparisons and some catch-up in orders that have been deferred by export control processing last year. Now that's real revenue, but I won't oversell. It is not proof the turnaround is complete. It isn't yet. Here is what we are actually doing to build a durable business. We have brought in a new general manager for BPD, and we're in the middle of rebuilding the commercial engine, the sales processes, pipeline discipline, and coverage this business needs. That work is underway, not finished, and I expect it to take the better part of a year to fully take hold. And we are setting BPD up for its next phase of growth. This is a franchise built around Gyrolab, an automated immunoassay platform. And as I mentioned at the start of my remarks, Gyrolab has not had a new platform launch since 2018. We have a next-generation platform in development, and when I looked at the timeline for release of the new platform, I saw a clear opportunity to move with more urgency. We reprioritized our R&D portfolio to concentrate investment on this launch, and we now expect the new Gyrolab platform to launch in fiscal 2028. I want to be clear about what that is and isn't. It's a decision we made and a pace we reset, not a product you can order today, and I'm not going to put revenue on it this afternoon. But it's exactly the kind of self-help opportunity we are now moving on, reigniting the innovation engine and bringing this franchise's next platform. And it's also the clearest signal I can give you of the operating tempo I intend to run this company at. Even with the commercial work still in progress, and while we continue managing through export control processing on certain in-hand orders, I expect BPD to grow for the full year. And I say that with real conviction, not just hope, because of what I'm seeing in the numbers. Next, let me speak plainly about SDC. Reported organic revenue was down 3.6% year over year for the quarter. And I am not going to dress that up, though I'll show you in a moment why the same franchise is up about 5% on a trailing 12-month basis and why both numbers are true at once. I have looked at the order book and the diagnosis matters. This is a delivery reliability problem. it is not a demand problem. Let me explain both aspects of that. And I'll take the demand first, because it's the shorter story. Demand for this franchise is healthy and intact. The recurring single-use consumable base tied to processes our customers are required to run is exactly what it has always been. And the order book remains substantial. What I will not tell you that demand is surging beyond our capacity because that is not what our data says. Over recent quarters, we've been steadily serving demand, not falling further behind it. So the problem this quarter was not that the orders overrun the factory. The problem is that we miss delivery dates on orders we already hold. That is a reliability problem, a promise-keeping problem, and it tells you the fix is standard work and process discipline inside our own 4 walls, not a capacity raise against the market. Now, the reliability side. The history, briefly. In fiscal 2025, orders ran ahead of what our factory could ship. And past due backlog, orders we held but did not deliver when we promised, built through the year. We disclosed that to you beginning with our third quarter fiscal 2025 report. In fiscal 2026, our teams attacked the backlog. And I want to be more precise than we cleared it. The progress came in bursts. We made headway early. The problem came back by mid-year. By December, past due backlog was nearly back to its highest level. And then, a genuinely impressive production push in the fourth quarter took it down by more than two-thirds in a single quarter to the more normalized levels we described to you in our year-end earnings release. But a burst is not a fix. A central finding of my 100-day review is that the improvements were episodic rather than locked into the process. When the surge resources came off, throughput slipped back and past due backlog rose again this quarter, up about $1 million dollars from its year-end low. I want to size that honestly in both directions. It is well below the peaks of last year, and it is, in fact, lower than it was a year ago but the direction is wrong. And I'm telling you plainly, we are shipping late on promises we made to customers. Finding a durable fix, a delivery reliability our customers can count on, is the single biggest priority for this business. This is also why quarterly SDC revenue looks inconsistent. When delivery timing is the variable, the reported number moves around even when the underlying franchise is steady. It's how a quarter can bring down 3.6% inside a trailing 12 months that is up about 5%. The right lens is fiscal years and trailing 12 months. And on that lens, the story is simple and it's good. SDC revenue was $93.4 million in fiscal 2025, and it was $101.6 million in fiscal 2026. I'll be precise about the composition because precision is what I'm asking you to trust me on. Only about $1 million of that year's growth came from drawing down the backlog. The substantial majority was genuine in-year demand, shipped. And on a trailing 12-month basis, SDC stands at just over $100 million today, up about 5% from a year ago, even with this quarter's missed deliveries inside it. And I want to tell you plainly why. Because I'd rather you understand the real cause than accept a vague apology. It comes down to a standard we hold ourselves to. We do not release a lot until it meets our internal specifications, full stop. And because this business works with biological materials, there is real natural variability in how long it takes any given lot to clear that bar. That standard is exactly why our customers trust these products inside their own regulated processes. And I'm not going to loosen our quality standards to hit a shipping date. What we are working on is reducing the variability in the process itself, tightening cycle times without ever touching the release standard. That work is underway, and I've asked my SVP of operations to make it his singular focus until it's done. Finally, I want to acknowledge who is on the other end of this promises because this is why the fix matters. Our SDC products are not discretionary purchases. They sit inside our customers' quality control processes in pharmaceutical and medical device manufacturing that itself is tightly regulated. When we slip late, we can create real disruption and extra work for people whose operations count on us. I sat with a number of these customers over my first 100 days and I heard their frustration directly, as I should. I told them what I'll tell you. They have every right to expect better from us. In aggregate, our customers have continued to order from us through this period. When the product has been available, it has moved. And that reflects the strength of the science and the depth of these relationships. But I want to be careful not to overstate that. Extended delays invite customers to evaluate alternatives. And I'm not going to promise that has cost us nothing anywhere. That is one more reason I refuse to treat loyalty as a cushion. Our teams have proven twice that they can move this backlog. The task now is converting the surge work into standard work. What I will commit to is a clear win on the durable fix and its trajectory when we give full year guidance at our next earnings call in November And I'll say this much today. I like the direction of what I'm seeing so far this quarter operationally. Switching gears now to our remaining 2 franchises, Calibration Solutions grew 7.6% organically year over year, doing exactly what this business is built to do, compounding steadily on a recurring service-driven revenue base. It doesn't generate headlines and that's precisely its value. It's the balance in the portfolio and it performed on plan. Turning to Clinical Genomics, it was essentially flat this quarter at negative one-tenth of a percent. Inside that number, China declined 7%, a significantly slower rate of decline than last year, which is what we told you in May to expect, while the business outside China grew 0.6%. But one quarter is a data point, not a trend. And I'm not going to extrapolate it in either direction. Our posture on that business is unchanged. We are managing it deliberately. with full attention to its cost structure and returns, and we'll have more to share as that work progresses. Let me step up from the individual franchise of the company as a whole. Before John takes you through all the numbers, I want to give you the one I look at first. Adjusted operating income, excluding unusual items, which is how I'll refer to it throughout, was approximately $66 million on a trailing 12-month basis, up about $2.5 million from where we ended fiscal 2026. In the quarter, adjusted operating income grew nearly 20%, and our margin expanded meaningfully year over year. The earning power of this company is growing in both rate and dollars. Now, let me be equally direct about how to read that, because I don't want to leave you with the wrong number. Our first quarter is structurally our lightest volume quarter. And this was a strong margin print I would caution you against simply annualizing it. We see an opportunity this year to reinvest a portion of the operating leverage this business generates to reallocate cost deliberately towards our faster growing, higher return businesses so we can accelerate them. That's a choice to compound growth, not a choice to maximize a single year's margin uptick. How we deploy that leverage is part of the strategy I'll share with you in November. Expense discipline continued across the business and I expect us to maintain that discipline even as we redeploy some of the capacity into growth investments as the year progresses. And to be clear, the SDC softness sits on the revenue line. So as we make our fulfillment reliable, there is high margin volume we expect to recover over time. The backlog we ship is margin we recognize. On the balance sheet, we paid down $8.7 million of debt this quarter bringing net leverage to 1.85x. Strengthening our balance sheet was a deliberate priority. And we are not stopping there. My intention is to keep bringing our leverage ratio down into the range of 1.5 to 1.75 turns as we exit this fiscal year. I want to be direct about what that signals. The near-term priority for this company's capital, and frankly my own attention, is not making acquisitions. It is executing on the businesses that we own and concentrating our resources behind the highest return parts of this portfolio. Because that is where the most reliable value creation sits right now. This may change in the later part of the second half of the year with small distributor buyouts or tuck-in acquisitions. But our true north is disciplined capital allocation, and I'll come back to it in November. A word on guidance. As I committed last quarter, we'll provide full year fiscal 2027 guidance at our next earnings call in November alongside first half results. I know some of you would prefer a full year number today. I'd rather give you what I can stand behind, informed by a full half year of data under the operating changes we made, than anchor you to a figure 100 days into my tenure. What I can tell you today is directional, and I say it with confidence. First quarter trends are consistent with our internal plan. In May, we told you we expected this business to return to organic growth in the first quarter, and it did. Our balance sheet keeps getting stronger. We intend to keep deleveraging toward the range of 1.5 to 1.75 turns this year, and our focus is squarely on execution and concentrating resources where the returns are best. Let me close where I began. I'm genuinely excited about what I have found here. Mesa is a set of durable, regulation-embedded franchises with real and growing earnings power. And the problems we have are execution problems, which are fixable and are being fixed. And at our next earnings call in November, you'll get the guidance. With that, let me hand it to John. John Sakys: Thank you, Siddhartha, and good afternoon, everyone. Siddhartha has taken you through the operating story of each franchise, so I'll stay in the numbers, including the consolidated income statement, balance sheet, and cash flows. Unless I note otherwise, all comparisons are to the first quarter of fiscal year '26. A reconciliation of the non-GAAP measures I'm referring to is included on our Investor Relations website. Total revenues for the first quarter were $60.1 million, an increase of 1% compared to the prior year. On a non-GAAP basis, organic revenues growth was also 1% as we had no acquisitions over the past 12 months. Core organic revenues growth, which excludes a 60 basis point tailwind from currency translation, was 0.4%. Just as we communicated in May, this returned Mesa to positive core organic growth for the quarter. Gross profit was $39 million or 64.9% of revenues, up roughly 290 basis points from 62% in the prior year, reflecting lower spend on third party contracted labor and consultants, supply chain efficiency improvements, and a favorable product mix partially offset by lower volumes in SDC. Operating expenses declined 5.6% to $32 million, reflecting lower stock-based compensation and continued cost discipline, even as we increased investment in SDC, particularly sales and marketing roles, to support future organic growth. As a result, GAAP operating income increased 129% to $7 million. On a non-GAAP basis, adjusted operating income increased 16.5% to $15 million, or $2.61 per diluted share. AOI in the quarter was negatively impacted by a legal settlement of $382,000. Excluding that item, AOI increased 19.5% to $15.4 million or 25.6% of revenues as compared to 21.7% in the prior year period or roughly 390 basis points of expansion. Let me provide a little more context on a trailing 12-month AOI excluding unusual items number that Siddhartha discussed. On that basis, AOI excluding unusual items was approximately $66 million or up about $2.5 million from where we ended fiscal year '26, which was effectively the improvement we delivered in this quarter since a trailing 12 month swaps last year's first quarter for this one. That improvement was driven primarily by gross profit expansion, which contributed approximately $2 million, along with approximately $0.5 million of benefit from lower cash operating expenses. While sustaining these efficiencies will require continued discipline, this performance reflects progress in improving the earnings profile of the business. Q1 is structurally our lightest volume quarter, and this was a strong margin print. So as Siddhartha said, I would caution you against annualizing the 25.6%. Indeed, we do see an opportunity this year to reinvest a portion of the operating leverage the business is generating into our faster growing, higher return businesses, and how we deploy that leverage will be part of what we lay out in November alongside full-year guidance. I'll now walk you through the gross profit expansion division by division. First, SDC, our largest business, which represents 41% of revenues this quarter, delivered revenues of $24.5 million, an organic decline of 3.6%, reflecting the delivery timing dynamics Siddhartha walked you through. Gross profit percentage decreased 150 basis points, primarily from lower revenues on a partially fixed cost base and product mix, primarily a volume effect. Second, BPD delivered revenues of $12.1 million, up 5% organically, on higher immunoassay hardware and consumables volumes, and, to a lesser extent, price. Gross profit percentage increased 800 basis points. A higher mix of immunoassay consumables benefits our gross profit percentage in this business, and we had supply chain efficiencies and operating leverage resulting from the revenues increase. Third, Calibration Solutions delivered revenues of $13.3 million, up 7.6% organically. Gross profit percentage increased 350 basis points, primarily from higher revenues on a partially fixed cost base. And lastly, Clinical Genomics delivered revenues of $10.3 million, essentially flat. Gross profit percentage increased 790 basis points primarily from price and manufacturing and supply chain efficiency improvements. To summarize, 3 of our 4 divisions expanded gross profit percentage meaningfully, which together with continued expense discipline more than offset the volume-driven decline in SDC, our highest margin business. We recorded non-operating expense of $2.7 million in the quarter compared to non-operating income of $3.9 million in the prior year. The swing is primarily attributable to changes in foreign currency rates, particularly unrealized currency gains and losses on an intercompany loan. This non-cash item will continue to create quarter to quarter volatility and non-operating expense while the loan remains outstanding. Income tax expense was $1.5 million, or 35% on pre-tax earnings of $4.4 million. As we disclose in our Form 10-Q, we currently expect a reasonable possibility of a favorable impact on our effective tax rate within the next 12 months from a potential partial release of the U.S. valuation allowance, although the timing and amount remain subject to our ongoing assessment and other factors affecting the tax rate including the jurisdictional mix of pre-tax income and discrete items. GAAP net income was $2.8 million or $0.49 per diluted share, a decrease of 40.3% driven by the non-operating swing I just described, not by operations. Turning to the balance sheet, we ended the quarter with $30.7 million of cash and cash equivalents up from $26.9 million at March 31, 2026. During the quarter, we repaid $8.7 million of debt, reducing our total net leverage ratio to 1.85x. As Siddhartha described, we intend to keep strengthening the balance sheet from here, moving toward roughly 1.5 to 1.75 turns of net leverage as we exit fiscal year '27. From a cash flows perspective, our operating cash flows were a meaningful highlight in Q1 and an important contributor to the strengthening of our balance sheet. Cash flows from operating activities provided $14.7 million in Q1, a $12.8 million year-over-year increase. The improvement was driven primarily by stronger customer collections across several businesses, as well as improved operating performance, including a $4 million increase in operating income. We continue to take deliberate steps to strengthen our financial position and improve cash generation, and we remain focused on disciplined capital allocation and on preserving the financial flexibility necessary to support Mesa's strategic priorities. As Siddhartha noted, we will provide full-year fiscal '27 guidance at our next earnings call in November alongside first half results. With that, operator, we're ready to open the line for questions. Operator: [Operator Instructions] And our first question we'll hear from Paul Knight with KeyBanc Capital Markets. Paul Knight: Congratulations on the new role. The question I think a lot of people would have is, you know, this has historically been a company focused on some merger and acquisition activity. What do you think are some of the key portions of the business that are easiest to build upon? Siddhartha Kadia: Yes, Paul, that's a great question. And look, I think as I said, 3 of our 4 businesses are actually growing nicely and have really good margin and growth profile. One of them, as you know, has been challenged. We are continuing to evaluate our portfolios. I'm not going to comment on specifically where we're going to put more focus, but I can tell you in terms of reallocating capital and mindshare, we certainly dedicated more capital and mindshare to SDC, BPD, and to an extent possible to Calibration Genomics as well. Paul Knight: And John, where are you with liquidity at this juncture in terms of bank line, interest rate? John Sakys: Yes, we're currently at 1.85x, Paul, with an effective interest rate of 5.6%. And our goal over the remainder of the fiscal year is to drive that down somewhere between 1.75x and 1.5x. Paul Knight: And then my last question is around China. Have conditions eased in the China market? Siddhartha Kadia: Good question, Paul. Listen, I think China market has structural issues. As you know, our revenue from China at this point is substantially lower than $3.5 million. It's a pretty small part of our company's overall revenue. And while the market itself has headwinds that are not easy, our exposure to the market has declined over the last 2 years significantly. Operator: [Operator Instructions] And next we'll hear from Tycho Peterson with Jefferies. Unknown Analyst: This is Matt on for Tycho. Maybe just to go back to some of the updates on the 100-day overview. On execution, you talked about issues to fix and then some of that's already started. We just kind of love more color on where you're focused on the execution fixes, any costs associated with remedying those, and then some that have already started, you know, where is that, and kind of what are you looking to address? And then also, just as you think about guidance philosophy, for the print in November, we'd just love a little bit more color on where you think market growth for this business is as we think about the context of go-forward guidance. Siddhartha Kadia: Yes, let me start. Thank you, Matt. And let me start with the second question first. I think for guidance, I think as I mentioned in the script, we are not going to provide any color on the guidance itself right now. Neither are we going to provide commentary on the market itself. That work is ongoing, and we will be having a full disclosure in November Q2 release along with the first half results. So I would wait for that. I will give you a bit of color on the execution. I think, you know, execution falls into 2 or 3 places. First of all, I found the management team to be solid. There are some fantastic people in this company. We have strong technical talent. We also have really strong general managers in place in 4 of our business segments. Wherever we needed to make a change, we have, as for example, BPD, where we have had execution challenges in the past. We have a new general manager starting. We've also reallocated the focus by our senior most operations executive on fixing the operations issues. So part of it is actually just talent and significant resource commitment and actually, frankly, mindshare commitment has been towards areas that we know we can fix completely under our own control. And finally what I'll tell you, I'm also, part of the change actually is also about in our culture. And while the culture of this company is strong quality culture with technical resources, I have brought with me a sense of urgency around a culture that doesn't really need a teardown, but it does need a discrimination on allocation of capital resources. And that really starts with me. So what I'm adding is sort of a growth mindset, an obsession with winning loyal customers, and a rhythm where the decisions get made quickly and efficiently with that capital reallocation in mind. Unknown Analyst: Okay, great. Thanks. And then maybe one for you, John, just to close the loop on the SDC timing. So, any finer point on what the headwind was in the quarter? I think the business was down 4% core. You talked about kind of trailing 12 months up 5%, up mid-single. So, is the delta between those two kind of the magnitude of the impact in the quarter? And then in terms of recouping that, just to be clear, do you think that comes back this quarter? Is that the rest of this year? Just any finer point on the magnitude of the headwind from some of the fulfillment delays in the quarter and then the cadence of recouping that from here? Thank you. John Sakys: Sure, Matt. So I think what we talked about is primarily delivery execution issues. We talked about an increase in backlog of about $1 million. But the way we like to look at this is on a 12-month basis, right? And the business has grown over the last trailing 12 months. And as we continue to work on our processes, we would expect to continue to clear that backlog. I'm not going to give you a timeframe, but we'll continue to work it and bring it down as quickly as we can. Operator: And this will conclude the question and answer session. I would like to turn the floor back to Doug Farrell for closing remarks. Doug Farrell: Thanks very much for joining us today. I'd like to remind everyone that both Siddhartha and John will be attending the Wells Fargo Conference in Boston on September 9th so that will provide the next opportunity to have a chance to meet with management. Thanks very much for joining us today. Operator: Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time. 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Interested in Mesa Laboratories, Inc.? Here are five stocks we like better. First-quarter revenue rose 1% to $60.1 million, while gross and adjusted operating margins improved significantly through cost controls, supply-chain efficiencies and favorable product mix. Operating cash flow increased to $14.7 million, and Mesa repaid $8.7 million of debt, lowering net leverage to 1.85 times. The Sterilization and Disinfection Control segment declined 3.6% organically because of fulfillment and delivery-reliability problems, not weaker demand. CEO Siddhartha Kadia is prioritizing more consistent execution and backlog reduction while maintaining quality standards. Biopharmaceutical Development grew 5% organically and Calibration Solutions increased 7.6%, but management cautioned that BPD’s recovery is still developing. Mesa expects to provide fiscal 2027 guidance with second-quarter results in November and plans to launch its next-generation Gyrolab platform in fiscal 2028. Mesa Laboratories (NASDAQ:MLAB) reported first-quarter fiscal 2027 revenue growth of 1%, improved operating margins and continued debt reduction, while newly appointed President and CEO Siddhartha Kadia outlined plans to address fulfillment issues in its Sterilization and Disinfection Control business and accelerate product development in Biopharmaceutical Development. Total first-quarter revenue was $60.1 million, up 1% from the prior-year period. Organic revenue also increased 1%, while core organic growth, excluding a 60-basis-point currency benefit, was 0.4%, according to Chief Financial Officer John Sakys. → MarketBeat Week in Review – 08/03 - 08/07 “Mesa is a set of durable, regulation-embedded franchises with real and growing earnings power that had fixable execution problems,” Kadia said on his first earnings call as CEO. He said the company’s near-term emphasis will be on execution, capital reallocation and debt reduction rather than acquisitions. Gross profit rose to $39 million, or 64.9% of revenue, from 62% a year earlier. Sakys attributed the roughly 290-basis-point improvement to lower spending on third-party contracted labor and consultants, supply-chain efficiencies and favorable product mix, partly offset by lower volume in Sterilization and Disinfection Control, or SDC. → Quantum Earnings Week: Winners and Losers Are Finally Emerging Operating expenses declined 5.6% to $32 million, reflecting lower stock-based compensation and cost controls. GAAP operating income increased 129% to $7 million. Adjusted operating income increased 16.5% to $15 million, or $2.61 per diluted share. Excluding a $382,000 legal settlement, adjusted operating income was $15.4 million, representing 25.6% of revenue, compared with 21.7% in the prior-year quarter. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War GAAP net income was $2.8 million, or $0.49 per diluted share, down 40.3% from a year ago. Sakys said the decline was driven by a non-operating swing related primarily to unrealized foreign-currency gains and losses on an intercompany loan, rather than operating performance. Cash flow from operating activities totaled $14.7 million, an increase of $12.8 million year over year. The company ended the quarter with $30.7 million in cash and cash equivalents and repaid $8.7 million of debt, reducing net leverage to 1.85 times. Mesa is targeting net leverage of roughly 1.5 to 1.75 times by the end of fiscal 2027. SDC, Mesa’s largest business and 41% of quarterly revenue, generated $24.5 million in sales, down 3.6% organically. Kadia said the shortfall reflected delivery reliability and fulfillment timing rather than weakened demand. The company’s past-due backlog increased by about $1 million from its fiscal year-end level. Kadia said Mesa had reduced backlog substantially through a production push in the fourth quarter of fiscal 2026, but said the improvements had been episodic rather than embedded in standard operating processes. “The problem is that we missed delivery dates on orders we already hold,” Kadia said. “That is a reliability problem, a promise-keeping problem.” He said the company will maintain its internal quality release standards for products involving biological materials while working to reduce process variability and shorten cycle times. Mesa’s senior vice president of operations has been assigned to focus on the issue, Kadia said. Despite the quarterly decline, SDC revenue increased from $93.4 million in fiscal 2025 to $101.6 million in fiscal 2026. On a trailing 12-month basis, SDC revenue stood at just over $100 million, up about 5% from a year earlier. Biopharmaceutical Development, or BPD, posted 5% organic revenue growth to $12.1 million, following an almost 30% decline in the preceding quarter. Kadia said the result benefited in part from easier comparisons and catch-up orders that had been deferred because of export-control processing, cautioning that the quarter did not represent a completed turnaround. Mesa has appointed a new general manager for BPD and is rebuilding the segment’s sales processes, pipeline discipline and commercial coverage. Kadia said the work is expected to take the better part of a year to become fully established. The company also reprioritized its research and development portfolio to accelerate the next-generation Gyrolab automated immunoassay platform. Mesa now expects to launch the platform in fiscal 2028. Kadia said the company is not providing revenue expectations for the product at this stage, but expects BPD to grow for the full fiscal year. Calibration Solutions revenue rose 7.6% organically to $13.3 million, supported by its recurring service-driven revenue base. Clinical Genomics revenue was essentially flat at $10.3 million. Revenue in China declined 7%, while the business outside China grew 0.6%. Kadia said China continues to face structural market issues, though Mesa’s revenue exposure there has declined significantly over the past two years and is now below $3.5 million. Mesa did not provide fiscal 2027 guidance on the call. Kadia said the company plans to issue full-year guidance with its second-quarter results in November, alongside first-half results. He said first-quarter trends were consistent with Mesa’s internal plan and that management intends to reinvest some operating leverage in faster-growing, higher-return businesses. While the company may consider small distributor buyouts or tuck-in acquisitions later in the fiscal year, Kadia said the immediate priority is improving the performance of existing businesses and allocating resources toward SDC, BPD and Calibration Solutions. Mesa Laboratories, Inc (NASDAQ: MLAB) is a global provider of instrumentation products designed for critical process monitoring, testing and calibration. Headquartered in Lakewood, Colorado, the company serves a diverse set of end markets including healthcare, pharmaceutical, food and beverage, energy and industrial sectors. With a focus on precision measurement and validation, Mesa Laboratories helps customers ensure regulatory compliance, product safety and operational efficiency across complex manufacturing and sterilization processes. The company's product portfolio encompasses biological and chemical indicators for sterilization process validation, digital data loggers and sensors for environmental monitoring, and optical gas analyzers with sample-conditioning solutions for oil, gas and petrochemical applications. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Mesa Laboratories Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterizes Mesa as a collection of durable, regulation-embedded franchises where recent underperformance was driven by fixable execution issues rather than structural demand shifts. The Sterilization and Disinfection Controls (SDC) segment's revenue decline is attributed to delivery reliability and process variability rather than a lack of market demand or capacity constraints. A strategic shift is underway to prioritize 'self-help' and organic execution over the company's historical reliance on aggressive M&A activity. The Biopharmaceutical Development (BPD) segment is undergoing a commercial engine rebuild, including new leadership and a reprioritized R&D portfolio to accelerate the next-generation Gyrolab platform. Management is implementing a 'growth mindset' culture focused on customer loyalty and faster decision-making to convert episodic production bursts into sustainable standard work. Capital allocation is being deliberately steered toward high-margin, high-return core franchises while Clinical Genomics is being managed for cost discipline and returns. Full-year fiscal 2027 guidance is deferred until November to allow for a half-year of data under new operating changes and leadership. The company intends to further strengthen the balance sheet, targeting a net leverage ratio reduction to between 1.5x and 1.75x by the end of the fiscal year. The next-generation Gyrolab platform launch is now accelerated and expected to occur in fiscal 2028 following a reprioritization of R&D resources. Management expects BPD to achieve full-year growth despite ongoing export control processing challenges and the multi-quarter timeline required for commercial restructuring. Future margin expansion may be partially offset by deliberate reinvestment of operating leverage into faster-growing, higher-return business segments. SDC past-due backlog increased by approximately $1 million this quarter, signaling that previous production improvements were episodic rather than systemic. Management acknowledged that extended delivery delays in SDC risk damaging long-term customer loyalty and may invite clients to evaluate alternative suppliers. A potential partial release of the U.S. tax valuation allowance is expected within the next 12 months, which could favorably impact the effective tax rate. Exposure to the China market has significantly declined to less than $3.5 million, mitigating the impact of structural headwinds in that region. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. CEO Kadia emphasized that while Mesa has historically been M&A-focused, the current priority is reallocating mindshare and capital to the three core growing franchises (SDC, BPD, and Calibration). Acquisitions are currently deprioritized in favor of internal execution, though small tuck-ins or distributor buyouts remain possible in late fiscal 2027. Management is addressing execution gaps by installing new leadership in BPD and tasking the SVP of Operations with a singular focus on SDC process variability. The new CEO is introducing a sense of urgency and 'discrimination' in resource allocation to ensure capital follows the highest returns. CFO Sakys noted the $1 million backlog increase but stressed that the franchise remains healthy on a trailing 12-month basis (up 5%). Management declined to provide a specific timeframe for clearing the backlog, focusing instead on tightening cycle times without compromising quality standards.

This article first appeared on GuruFocus. Total Revenue: $60.1 million, an increase of 1% compared to the prior year. Organic Revenue Growth: 1% on a non-GAAP basis; core organic growth was 0.4% excluding a 60-basis-point currency tailwind. Gross Profit: $39 million, or 64.9% of revenues, up roughly 290 basis points from 62% in the prior year. Operating Expenses: Declined 5.6% to $32 million. GAAP Operating Income: Increased 100% to $7 million. Adjusted Operating Income (AOI): Increased 16.5% to $15 million, or $2.61 per diluted share; excluding a $382,000 legal settlement, AOI increased 19.5% to $15.4 million, or 25.6% of revenues. Trailing 12-Month AOI (Excluding Unusual Items): Approximately $66 million, up about $2.5 million from the end of fiscal 2026. GAAP Net Income: $2.8 million, or $0.49 per diluted share, a decrease of 40.3% driven by non-operating currency swings. Operating Cash Flow: $14.7 million in Q1, a $12.8 million year-over-year increase. Debt Repayment: Repaid $8.7 million of debt during the quarter. Net Leverage Ratio: 1.85 times, with a target of 1.5x to 1.75x by fiscal year-end. SDC Revenue: $24.5 million, an organic decline of 3.6%; gross profit percentage decreased 150 basis points. BPD Revenue: $12.1 million, up 5% organically; gross profit percentage increased 800 basis points. Calibration Solutions Revenue: $13.3 million, up 7.6% organically; gross profit percentage increased 350 basis points. Clinical Genomics Revenue: $10.3 million, essentially flat; gross profit percentage increased 790 basis points. Warning! GuruFocus has detected 8 Warning Sign with MLAB. Is MLAB fairly valued? Test your thesis with our free DCF calculator. Release Date: August 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Mesa Laboratories Inc (NASDAQ:MLAB) returned to positive core organic revenue growth in Q1, with BPD growing 5% and Calibration Solutions growing 7.6% year-over-year. Adjusted operating income (excluding unusual items) increased nearly 20% in the quarter, with margin expansion of roughly 390 basis points year-over-year. The company made significant progress on its balance sheet, paying down $8.7 million of debt and reducing net leverage to 1.85x, with a target of 1.5x-1.75x by fiscal year-end. SDC's underlying demand remains healthy, with trailing 12-month revenue up about 5% year-over-year, and the company is actively addressing delivery reliability issues. Management is prioritizing self-help and execution, including accelerating the next-generation Gyrolab platform launch to fiscal 2028, signaling a focus on organic growth. SDC reported organic revenue declined 3.6% year-over-year due to delivery reliability issues, with past due backlog rising by about $1 million from its year-end low. The company acknowledged that improvements in SDC's backlog were episodic rather than durable, and it is still working to convert surge work into standard work. BPD's 5% growth was partly attributed to easier comparisons and catch-up orders, and the turnaround is not yet complete, with commercial rebuilding expected to take most of a year. Clinical Genomics remained flat, with China declining 7%, and the company is managing this business deliberately but not expecting a quick recovery. GAAP net income decreased 40.3% due to non-operating currency swings, and the company cautioned against annualizing Q1's strong margin performance. Q: What are the key portions of the business that are easiest to build upon, given the company's historical focus on M&A?A: Siddhartha Kadia (President and CEO) stated that three of the four businesses are growing nicely with good margin and growth profiles. While he did not specify where focus will be placed, he confirmed that the company is dedicating more capital and mindshare to SDC, BPD, and, to an extent, Clinical Genomics and Calibration Solutions. Q: Can you provide more color on the execution fixes, any costs associated with remedying them, and the guidance philosophy for the November print?A: Siddhartha Kadia (President and CEO) declined to provide guidance or market commentary, deferring full disclosure to November. On execution, he noted the management team is solid with strong technical talent. Key changes include a new general manager for BPD and reallocating the full focus of the SVP of Operations to fix operational issues. He also emphasized a cultural shift toward a growth mindset, an obsession with winning loyal customers, and a rhythm of quick, efficient decision-making regarding capital allocation. Q: Can you provide a finer point on the SDC delivery timing headwind in the quarter, the magnitude of the impact, and the cadence of recouping it?A: John Sakys (CFO) explained that the issue was primarily delivery execution, with past-due backlog increasing by about $1 million from its year-end low. He emphasized looking at the business on a trailing 12-month basis, where it has grown. While he did not give a specific timeframe, he stated the company will continue to work on clearing the backlog as quickly as possible. Q: Where are you with liquidity in terms of bank line and interest rate?A: John Sakys (CFO) reported that the company is currently at 1.85 times net leverage with an effective interest rate of 5.6%. The goal for the remainder of the fiscal year is to drive leverage down to between 1.5x and 1.75x. Q: Have conditions eased in the China market?A: Siddhartha Kadia (President and CEO) stated that the China market has structural issues. However, Mesa's exposure to the market has declined significantly over the last two years, and revenue from China is now substantially lower than $3.5 million, making it a small part of the company's overall revenue. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

LAKEWOOD, Colo., Aug. 10, 2026 (GLOBE NEWSWIRE) -- Mesa Laboratories, Inc. (NASDAQ:MLAB) (“Mesa” or the “Company”), a global leader in the design and manufacture of life science tools and critical quality control solutions, today announced results for its first fiscal quarter (“1Q27”) ended June 30, 2026 (amounts in thousands). 1Q27 Financial Summary – (comparisons are versus the same prior year period) Revenues increased 1.0% Non-GAAP organic and core organic revenues1 growth was 1.0% and 0.4%, respectively Operating income increased 129% to $7,031 Non-GAAP adjusted operating income (“AOI”) excluding unusual items2 increased 19.5% and was 25.6% as a percentage of revenues Repaid $8,656 of debt and reduced Total Net Leverage Ratio3 to 1.85 We operate our business in four divisions: Sterilization and Disinfection Control (“SDC”), Biopharmaceutical Development (“BPD”), Calibration Solutions (“CS”), and Clinical Genomics (“CG”). Executive Commentary (amounts in thousands) “I joined Mesa about one hundred days ago. I did not spend my time writing a vision statement, I spent it inside the company, with our people and our customers. What I found is a set of durable, regulation-embedded franchises with real and growing earnings power, and fixable execution problems we have already begun to fix. My focus is disciplined execution and consistent, profitable growth across our four divisions. In November, alongside first-half results, I will give full-year guidance,” said Siddhartha Kadia, President and CEO of Mesa. “First quarter revenues of $60,138 represented 1.0% organic (0.4% core organic) growth, returning the Company to positive core organic growth in 1Q27 as we stated last quarter. Growth was driven by CS and BPD, partially offset by SDC, while revenues in CG were essentially flat versus the prior year. AOI excluding unusual items was 25.6% of revenues versus 21.7% in 1Q26, above expectations even as we increased investment in SDC to support future organic growth. In the first quarter, we repaid $8,656 of debt and reduced our Total Net Leverage Ratio to 1.85, well below our previously stated target of 2.0,” said John Sakys, Chief Financial Officer of Mesa. “We remain focused on disciplined capital allocation and preserving the financial flexibility necessary to support Mesa’s strategic priorities.” Financial Results (unaudited, amounts in thousands, except per share data) Total revenues were $60,138, an increase of 1.0% compared to 1Q26. Operating income increased 129% to $7,031. Net income was $2,830, a decrease of 40.3%, or $0.49 per diluted share of common stock. The decrease was driven by nonoperating expense of $2,678 in 1Q27 compared to nonoperating income of $3,948 in 1Q26. The prior year period included unrealized foreign currency gains of approximately $6,150 related to an intercompany loan, offsetting the increase in operating income. On a non-GAAP basis, core organic revenues growth was 0.4% and AOI increased 16.5% to $15,035 or $2.61 per diluted share of common stock, compared to 1Q26. As detailed in the Unusual Items table below, AOI for 1Q27 was negatively impacted by unusual items totaling $382. Excluding the unusual items for 1Q27, AOI increased 19.5% to $15,417. A reconciliation of non-GAAP measures is provided in the tables below. Total Net Leverage Ratio was 1.85 as of June 30, 2026. Division Performance Sterilization and Disinfection Control (41% of revenues in 1Q27) revenues were $24,505 for the quarter, which resulted in an organic revenues decline of 3.6%. This decline was primarily attributable to fulfillment and delivery execution challenges that negatively impacted the timing of customer shipments. Gross profit percentage for the quarter decreased by 150 bps versus the same quarter in the prior year primarily from lower revenues on a partially fixed cost base and product mix. Biopharmaceutical Development (20% of revenues in 1Q27) revenues were $12,059 for the quarter, which delivered organic revenues growth of 5.0%. The increase resulted primarily from higher immunoassays hardware and consumables sales volumes and, to a lesser extent, price increases. Sales volumes in the prior year period were negatively impacted by order delays as customers deferred purchasing decisions amid rapidly evolving tariff conditions and macroeconomic uncertainty. Gross profit percentage for the quarter increased 800 bps, primarily from favorable product mix, efficiencies in our supply chain management, and higher revenues on a partially fixed cost base. Calibration Solutions (22% of revenues in 1Q27) revenues were $13,285 for the quarter, which delivered organic revenues growth of 7.6%. Revenues growth was driven primarily by strong commercial execution and, to a lesser extent, price increases. Gross profit percentage for the quarter increased by 350 bps, primarily from higher revenues on a partially fixed cost base. Clinical Genomics (17% of revenues in 1Q27) revenues were $10,289 for the quarter, which resulted in an organic revenues decline of 0.1%. Revenues were essentially flat, as modest growth outside of China offset continued weakness in that market. While revenue in China continued to decrease, the year-over-year reduction was significantly smaller than in the prior year period following substantial revenue declines in recent fiscal years. Gross profit percentage for the quarter increased by 790 bps, primarily attributable to price increases and manufacturing and supply chain efficiency improvements. Conference Call, Webcast, and Webcast Replay Information Details for the conference call can be found below: Please call the conference telephone number or log on to the web access link five minutes prior to the start time. A replay of the call will remain available for 45 days via the investors section of the Mesa Labs website at https://investors.mesalabs.com/. Use of Non-GAAP Financial Measures Adjusted operating income, adjusted operating income excluding unusual items, organic revenues growth and core organic revenues growth are non-GAAP measures that exclude or adjust for certain items, as detailed within the tables in “Supplemental Information Regarding Non-GAAP Financial Measures.” 1 Organic revenues growth is defined as reported revenues growth excluding the impact of acquisitions and core organic revenues growth is defined as organic revenues growth excluding currency translation. A reconciliation of each of these non-GAAP measures to its GAAP counterpart is set forth below. 2 Adjusted operating income and adjusted operating income per share are defined to exclude the non-cash impact of amortization of intangible assets acquired in a business combination, stock-based compensation, and depreciation and impairment of goodwill and long-lived assets. These measures are also presented excluding unusual items. A reconciliation of these non-GAAP measures to their GAAP counterparts is set forth below, along with additional information regarding their use. 3 Total Net Leverage Ratio under our Credit Facility is defined as the ratio of total debt minus unrestricted cash in excess of $10 million as compared to 12 months trailing EBITDA. EBITDA, a non-GAAP metric, for purposes of this calculation, is defined as net income plus the sum of interest expense, income tax expense, depreciation, amortization, unusual or non-recurring non-cash charges and stock compensation expense. About Mesa Laboratories, Inc. Mesa is a global leader in the design and manufacture of life science 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. For more information about Mesa, please visit its website at www.mesalabs.com. Forward Looking Statements This press release contains forward-looking statements regarding our future business expectations. Any statements contained herein that are not statements of historical fact may be forward-looking statements, including statements relating to future financial results, business conditions and strategic initiatives. Words such as “seek,” “expect,” “plan” “intend,” “anticipate,” “believe,” “could,” “should,” “estimate,” “may,” “target,” “project,” and similar expressions may also identify forward-looking statements. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. The forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to risks and uncertainties relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control. Risks and uncertainties that could cause actual results to differ materially from our historical experience and present expectations or projections include those relating to: our ability to successfully grow our business; market acceptance of our products; the potential for reduced demand for our products ; conditions in the global economy and the particular markets we serve; significant developments or uncertainties stemming from actions of the U.S. government, including changes in U.S. trade policies and medical device regulations; the timely development and commercialization, and customer acceptance, of enhanced and new products and services; the inherent uncertainty of projections of revenues, growth, operating results, profit margins, expenses, earnings, margins, tax rates, tax provisions, cash flows, liquidity, demand, and competition; the effects of additional actions taken to become more efficient or reduce costs; restructuring activities; laws regulating fraud and abuse in the health care industry and the privacy and security of health and personal information; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; and general economic, industry, and capital markets conditions. These risks and uncertainties also include, but are not limited to, those described in our filings with the Securities and Exchange Commission including our Annual Report on Form 10-K for the year ended March 31, 2026, and our Quarterly Reports on Form 10-Q. We assume no obligation to update the information in this press release. Mesa Laboratories Contacts: John Sakys; [email protected] 1 Legal Settlement related to lawsuit stemming from actions prior to presented reporting periods. Supplemental Information Regarding Non-GAAP Financial Measures In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we provide non-GAAP adjusted operating income, non-GAAP adjusted operating income per share amounts, non-GAAP adjusted operating income excluding unusual items, non-GAAP adjusted operating income excluding unusual items per share amounts, non-GAAP organic revenues growth, and non-GAAP core organic revenues growth, in order to provide meaningful supplemental information regarding our operational performance. We believe that the use of these non-GAAP financial measures, in addition to GAAP financial measures, helps investors to gain a better understanding of our operating results, consistent with how management measures and forecasts our operating performance, especially when comparing such results to previous periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes. This information facilitates management's internal comparisons to our historical operating results as well as to the operating results of our competitors. Since management finds these measures to be useful, we believe that our investors can benefit by evaluating both GAAP and non-GAAP results. The non-GAAP measures of adjusted operating income and adjusted operating income per share presented in the reconciliation above are defined to exclude the non-cash impact of amortization of intangible assets acquired in a business combination, stock-based compensation, depreciation and impairment of goodwill and long-lived assets. To calculate adjusted operating income, we exclude, as applicable: Impairments of long-lived assets, as such charges are outside of our normal operations and in most cases are difficult to accurately forecast. Stock-based compensation expense, as it is a non-cash charge and costs calculated for this expense vary in accordance with the stock price on the date of grant. Depreciation expense, as it is a non-cash charge. The expense associated with the amortization of acquisition-related intangible assets, as a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of up to 20 years. Exclusion of amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies. The non-GAAP measures of adjusted operating income excluding unusual items and adjusted operating income excluding unusual items per share presented in the reconciliation above are defined as adjusted operating income less unusual items that are not ongoing and are related to a specific transaction. We exclude these unusual items as they are outside of normal operations and are not ongoing. Our management recognizes that items such as amortization of intangible assets, stock-based compensation expense, depreciation expense and impairment losses on goodwill and long-lived assets can have a material impact on our operating and net income. To gain a complete picture of all effects on our profit and loss from any and all events, management relies (and investors should rely) on the GAAP consolidated statements of operations. The non-GAAP numbers focus instead on our core operating business. Readers are reminded that non-GAAP measures are merely a supplement to, and not a replacement for, or superior to, financial measures prepared according to GAAP. They should be evaluated in conjunction with the GAAP financial measures. Our non-GAAP information may be different from the non-GAAP information provided by other companies.

Lakewood, Colo., July 06, 2026 (GLOBE NEWSWIRE) -- Mesa Laboratories, Inc. (NASDAQ:MLAB) (we, us, our, “Mesa” or the “Company”) today announced that its Board of Directors has declared a regular quarterly dividend of $0.16 per share of common stock. The dividend will be payable on September 15, 2026, to shareholders of record at the close of business on August 31, 2026. About Mesa Laboratories, Inc. Mesa is a global leader in the design and manufacture of life science 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. Forward Looking Statements This press release may contain information that constitutes forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our historical experience and present expectations or projections.  Forward-looking statements include statements relating to revenues and growth, operating results, profit margin pressure, industry conditions, economic conditions, demand, competition, the effects of additional actions taken to become more efficient or lower costs, risks related to the integration of acquired businesses, changes in legal and regulatory matters, the ability to generate additional cash flow, and any events or developments that we expect or anticipate will occur in the future. Generally, the words “expect,” “anticipate,” “seek,” “intend,” “plan,” “believe,” “could,” “estimate,” “may,” “target,” “project,” and similar expressions identify forward-looking statements. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. These statements are based upon current information and expectations. Actual results may differ materially from those estimated or anticipated as a result of these risks and unknowns or other risks and uncertainties. For additional information concerning these and other risks and uncertainties that could affect these statements, and our business, see our Annual Report on Form 10-K for the year ended March 31, 2026, as well as other risks and uncertainties detailed from time to time in our reports on Forms 10-Q and 8-K subsequently filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof, to provide any updates, or to reflect the occurrence of future events. CONTACT: CONTACT: Siddhartha Kadia; President and CEO, or John Sakys; CFO, both of Mesa Laboratories, Inc., +1-303-987-8000 For more information about the Company, please visit its website at www.mesalabs.com

LAKEWOOD, Colo., May 27, 2026 (GLOBE NEWSWIRE) -- Mesa Laboratories, Inc. (NASDAQ:MLAB) (“Mesa” or “the Company”), a global leader in the design and manufacture of life science tools and critical quality control solutions, today announced results for its fourth fiscal quarter (“4Q26”) and fiscal year (“FY26”) ended March 31, 2026 (amounts in thousands). 4Q26 Financial Summary – (comparisons are versus the same prior year period) Revenues increased 2.6% Non-GAAP organic and core organic revenues1 growth was 2.6% and (0.6)%, respectively Operating income increased 87% to $2,748 Non-GAAP adjusted operating income (“AOI”) excluding unusual items2 increased 49.2% and was 28.7% as a percentage of revenues Repaid $14,700 of debt and reduced Total Net Leverage Ratio3 to 2.11 Full FY26 Financial Summary – (comparisons are versus the prior fiscal year) Revenues increased 3.4% Non-GAAP organic and core organic revenues growth was 3.4% and 1.2%, respectively Operating income increased 13.3% to $18,511 Non-GAAP adjusted operating income excluding unusual items increased 11.9% and was 25.5% as a percentage of revenues We operate a diversified business across four divisions: Sterilization and Disinfection Control (“SDC”), Biopharmaceutical Development (“BPD”), Calibration Solutions (“CS”), and Clinical Genomics (“CG”). Executive Commentary (amounts in thousands) “As announced in March, I am in the middle of my onboarding journey as I am conducting my first 100 days review of the businesses since joining Mesa on April 13. I want to share that I am even more excited today than the day I joined. The Mesa diversified platform has tremendous potential to create shareholder value while delivering on our promise to Protect the Vulnerable. Upon completion of my 100-day review of our business, I am looking forward to begin meeting with our shareholders and discussing my vision for the Company moving forward. I also expect to be in position to provide rest of the year guidance along with the release of H1 results,” said Siddhartha Kadia, President and CEO of Mesa. “We delivered 2.6% organic (-0.6% core organic) revenues growth in 4Q26 resulting from significant growth in SDC, which was aided by a reduction in backlog to more normalized levels, a less volatile quarter in CG and a positive impact from FX. This strong growth was mostly offset by a significant decline in BPD revenues, due to challenges associated with commercial execution during the quarter as well as shipping delays associated with export controls that prevented the shipment of several Peptide systems during the quarter. While we have experienced some loosening of export controls for Peptide systems over the past 30 days, we know that there is still work to be done to enable BPD to return to more consistent and acceptable growth rates. Despite the challenges we face in BPD, we expect our overall revenues to return to positive core organic growth in 1Q27,” said John Sakys, Chief Financial Officer of Mesa. “Profitability for the quarter, as measured by AOI excluding unusual items as a percentage of revenues, was strong at 28.7% versus 19.7% for 4Q25, driven largely by SDC backlog clearance, improving volumes, and favorable product mix and benefits from cost realignment actions taken at the end of 2Q26, which more than overcame headwinds of 70 bps from FX and a negligible impact from tariffs. Moving forward we expect this percentage to moderate closer to the mid 20’s as our product mix normalizes and we continue to increase investments in SDC during the first half of FY27 aimed at driving future organic growth,” added Mr. Sakys. “For the year, revenues were $249,130 which resulted in 3.4% organic (1.2% core organic) revenues growth. Profitability as measured by AOI excluding unusual items increased 11.9% to $63,487, or 25.5% as a percentage of revenues, an increase of 200 bps versus FY25, despite facing FX headwinds of 80 bps. For the year, we generated $39,581 of free cash flow4 which was used primarily to pay down debt, including $14,700 during the fourth quarter, which reduced our total Net Leverage Ratio to 2.11,” concluded Mr. Sakys. Financial Results (unaudited, amounts in thousands, except per share data) Fourth Quarter Fiscal Year 2025Total revenues were $63,724, an increase of 2.6% compared to 4Q26. Operating income increased 87% to $2,748 (which included $6,720 of CEO transition costs of which $3,731 was comprised of accelerated stock compensation expense). Net loss was $4,136, a decrease of 41.9% or $(0.75) per diluted share of common stock. On a non-GAAP basis, core organic revenues growth was (0.6)% and AOI increased 26.3% to $15,291, or $2.76 per diluted share of common stock, compared to 4Q25. As detailed in the Unusual Items table below, AOI for 4Q26 and 4Q25 was negatively impacted by unusual items totaling $2,989 and $152, respectively. Excluding the unusual items for 4Q25, AOI increased 49.2% to $18,280. A reconciliation of non-GAAP measures is provided in the tables below. Total Net Leverage Ratio was 2.11 as of March 31, 2026. Full Fiscal Year 2026 Total revenues were $249,130, an increase of 3.4% compared to FY25. Operating income increased 13.3% to $18,511. Net income was $6,712, an increase of 440.0% or $1.21 per diluted share of common stock. On a non-GAAP basis, core organic revenues growth was 1.2% and AOI increased 10.5% to $59,650, or $10.72 per diluted share of common stock compared to FY25. As detailed in the Unusual Items table below, AOI for FY26 and FY25 was negatively impacted by unusual items totaling $3,837 and $2,732, respectively. Excluding the unusual items for FY26 and FY25, AOI increased 11.9% to $63,487. A reconciliation of non-GAAP measures is provided in the tables below. Division Performance Sterilization and Disinfection Control (46% of revenues in 4Q26) revenues were $29,136 for the quarter, which resulted in organic revenues growth of 17.7% for the quarter and 8.7% for the year. During 4Q26, we were able to continue the acceleration of our production capabilities we first saw in 3Q26 and we were able to reduce our backlog by approximately $2.0M to more normalized levels, which, along with modest price increases and the impact of FX, resulted in strong organic growth for both the quarter and the full year. Without the backlog clearance, the growth for 4Q26 would have been approximately 9.3%. While we have made significant progress in improving our manufacturing processes during FY26, which has allowed for more consistent production during the second half of FY26, there is still more work to be done until we can be confident that all of the issues we have historically experienced are fully resolved. Gross profit percentage increased 270 bps for the quarter and 10 bps for the year (normalizing for $1,232 of non-cash inventory step up purchase accounting charges in FY25) primarily due to increases in revenues, partially offset by the impact of FX. Excluding the impact of FX, gross profit percentage would have been 74.3% for the quarter and 71.3% for the year. Calibration Solutions (21% of revenues in 4Q26) revenues were $13,559 for the quarter, which resulted in organic revenues growth of 2.3% for the quarter and 3.5% for the year. The increases were primarily driven by commercial momentum and price increases. Gross profit percentage increased 520 bps for the quarter and 50 bps for the year. The increase for 4Q26 was primarily due to increased revenues and favorable product mix. The increase for FY26 was primarily due to increased revenues and product mix, partially offset by 20 bps of tariffs. Biopharmaceutical Development (14% of revenues in 4Q26) revenues were $8,847 for the quarter, which resulted in organic revenues decline of 29.9% for the quarter and 0.2% for the year. The decrease for the quarter was driven by significantly lower sales for both IAS and Peptide systems, primarily due to commercial execution and shipping delays associated with export controls that prevented the shipment of several Peptide systems during the quarter, partially offset by the impact of FX. The decrease for the year was driven by lower IAS sales and shipping delays associated with export controls, partially offset by growth in peptides and the impact of FX. Gross profit percentage increased 130 bps for the quarter and decreased 270 bps for the year. The increase for the quarter resulted from positive product mix, partially offset by 320 bps of negative impact from FX and tariffs. The decrease for the year was primarily due to unfavorable product mix and 260 bps of negative impact from FX and tariffs. Clinical Genomics (19% of revenues in 4Q26) revenues were $12,182 for the quarter, which resulted in organic revenues growth of 5.8% for the quarter and an organic revenues decline of 3.6% for the year. The increase for the quarter was driven by growth outside of China of 11.4% and the impact of FX, partially offset by a contraction in revenues from China of approximately $500, or 34%. The decrease for the year was driven by a contraction of China revenues of approximately $5.2 million, or 57.4%, partially offset by 9.1% growth outside of China and the impact of FX. We expect to see flat or a significantly slower decline in revenues from China moving forward and expect to continue our modestly positive momentum in FY27 in the rest of the world. Gross profit percentage increased 570 bps for the quarter and 280 bps for the year primarily due to manufacturing and supply chain efficiency improvements, lower personnel-related costs attributable to our cost mitigation efforts in 2Q26, and favorable geographic product mix, as sales outside of China typically generate higher margins. Use of Non-GAAP Financial Measures Adjusted operating income, adjusted operating income excluding unusual items, organic revenues growth and core organic revenues growth are non-GAAP measures that exclude or adjust for certain items, as detailed within the tables in “Supplemental Information Regarding Non-GAAP Financial Measures.” 1 Organic revenues growth is defined as reported revenues growth excluding the impact of acquisitions and core organic revenues growth is defined as organic revenues growth excluding currency translation. A reconciliation of these non-GAAP measures to their GAAP counterpart is set forth below. 2 Adjusted operating income and adjusted operating income per share are defined to exclude the non-cash impact of amortization of intangible assets acquired in a business combination, stock-based compensation, and depreciation and impairment of goodwill and long-lived assets. These measures are also presented excluding unusual items. A reconciliation of these non-GAAP measures to their GAAP counterparts is set forth below, along with additional information regarding their use. 3 Total Net Leverage Ratio under our Credit Facility is defined as the ratio of total debt minus unrestricted cash in excess of $10 million as compared to 12 months trailing EBITDA. EBITDA, a non-GAAP metric, for purposes of this calculation, is defined as net income plus the sum of interest expense, income tax expense, depreciation, amortization, unusual or non-recurring non-cash charges and stock compensation expense. 4 Free cash flow is derived from the Consolidated Statements of Cash Flows and is defined as net cash provided by operating activities less purchases of property, plant and equipment. A reconciliation of this non-GAAP measure is set forth below. About Mesa Laboratories, Inc. Mesa is a global leader in the design and manufacture of life science 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. For more information about Mesa, please visit its website at www.mesalabs.com. Forward Looking Statements This press release contains forward-looking statements regarding our future business expectations. Any statements contained herein that are not statements of historical fact may be forward-looking statements, including statements relating to future financial results, business conditions and strategic initiatives. Words such as “seek,” “expect,” “plan” “intend,” “anticipate,” “believe,” “could,” “should,” “estimate,” “may,” “target,” “project,” and similar expressions may also identify forward-looking statements. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. The forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to risks and uncertainties relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control. Risks and uncertainties that could cause actual results to differ materially from our historical experience and present expectations or projections include those relating to: our ability to successfully grow our business, including as a result of acquisitions; the results on operations of acquisitions; our ability to consummate acquisitions at our historical rate and at appropriate prices; our ability to effectively integrate acquired businesses and achieve desired results; the market acceptance of our products; reduced demand for our products that adversely impacts our future revenues, cash flows, results of operations and financial condition; conditions in the global economy and the particular markets we serve; significant developments or uncertainties stemming from actions of the U.S. government, including changes in U.S. trade policies and medical device regulations; the timely development and commercialization, and customer acceptance, of enhanced and new products and services; the inherent uncertainty of projections of revenues, growth, operating results, profit margins, expenses, earnings, margins, tax rates, tax provisions, cash flows, liquidity, demand, and competition; the effects of additional actions taken to become more efficient or reduce costs; restructuring activities; laws regulating fraud and abuse in the health care industry and the privacy and security of health and personal information; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; and general economic, industry, and capital markets conditions. These risks and uncertainties also include, but are not limited to, those described in our filings with the Securities and Exchange Commission including our Annual Report on Form 10-K for the year ended March 31, 2025, and our Quarterly Reports on Form 10-Q. We assume no obligation to update the information in this press release. Mesa Laboratories Contacts: Siddhartha Kadia; President and CEO, John Sakys; [email protected] Financial Summary (Unaudited except for the information as of and for the year ended March 31, 2025) Organic and Core Organic Revenues Growth (Unaudited) Free Cash Flow (Unaudited) Supplemental Information Regarding Non-GAAP Financial Measures In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we provide non-GAAP adjusted operating income, non-GAAP adjusted operating income per share amounts, non-GAAP adjusted operating income excluding unusual items, non-GAAP adjusted operating income excluding unusual items per share amounts, non-GAAP organic revenues growth, and non-GAAP core organic revenues growth, in order to provide meaningful supplemental information regarding our operational performance. We believe that the use of these non-GAAP financial measures, in addition to GAAP financial measures, helps investors to gain a better understanding of our operating results, consistent with how management measures and forecasts our operating performance, especially when comparing such results to previous periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes. This information facilitates management's internal comparisons to our historical operating results as well as to the operating results of our competitors. Since management finds these measures to be useful, we believe that our investors can benefit by evaluating both GAAP and non-GAAP results. The non-GAAP measures of adjusted operating income and adjusted operating income per share presented in the reconciliation above are defined to exclude the non-cash impact of amortization of intangible assets acquired in a business combination, stock-based compensation, depreciation and impairment of goodwill and long-lived assets. To calculate adjusted operating income, we exclude, as applicable: Impairments of long-lived assets, as such charges are outside of our normal operations and in most cases are difficult to accurately forecast. Stock-based compensation expense, as it is a non-cash charge and costs calculated for this expense vary in accordance with the stock price on the date of grant. Depreciation expense, as it is a non-cash charge. The expense associated with the amortization of acquisition-related intangible assets, as a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of up to 20 years. Exclusion of amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies. The non-GAAP measures of adjusted operating income excluding unusual items and adjusted operating income excluding unusual items per share presented in the reconciliation above are defined as adjusted operating income less unusual items that are not on-going and are related to a specific transaction. We exclude these unusual items as they are outside of normal operations and are not on-going. Our management recognizes that items such as amortization of intangible assets, stock-based compensation expense, depreciation expense and impairment losses on goodwill and long-lived assets can have a material impact on our operating and net income. To gain a complete picture of all effects on our profit and loss from any and all events, management relies (and investors should rely) on the GAAP consolidated statements of operations. The non-GAAP numbers focus instead on our core operating business. Readers are reminded that non-GAAP measures are merely a supplement to, and not a replacement for, or superior to, financial measures prepared according to GAAP. They should be evaluated in conjunction with the GAAP financial measures. Our non-GAAP information may be different from the non-GAAP information provided by other companies.