10QSB 1 0001.txt Form 10-QSB U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2000 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT For the transition period from ____________ to ____________ Commission File Number 0-11740 MESA LABORATORIES, INC. (Exact Name of Small Business Issuer as Specified in its Charter) COLORADO 84-0872291 (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 12100 WEST SIXTH AVENUE, LAKEWOOD, COLORADO 80228 (Address of Principal Executive Offices) (Zip Code) Issuer's telephone number, including area code: (303) 987-8000 Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act, during the past 12 months and (2) has been subject to the filing requirements for the past 90 days. Yes X No ___. State the number of shares outstanding of each of the Issuer's classes of common stock, as of the latest practicable date: There were 3,653,315 shares of the Issuer's common stock, no par value, outstanding as of December 31, 2000. MESA LABORATORIES, INC. BALANCE SHEETS (UNAUDITED)
ASSETS DECEMBER 31, 2000 MARCH 31, 2000 CURRENT ASSETS Cash and Cash Equivalents $ 2,847,332 $2,849,709 Accounts Receivable, Net 3,067,520 2,385,803 Inventories 2,374,484 1,961,055 Prepaid Expenses 53,989 38,331 Deferred Income Taxes 101,163 101,163 TOTAL CURRENT ASSETS 8,444,488 7,336,061 PROPERTY, PLANT & EQUIPMENT, NET 1,576,325 1,574,698 OTHER ASSETS Intangible Assets, Net 4,311,834 4,623,510 TOTAL ASSETS $14,332,647 $13,534,269 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 129,240 $ 171,974 Accrued Salaries & Payroll Taxes 313,676 323,349 Other Accrued Expenses 204,010 197,108 Taxes Payable 321,679 114,683 TOTAL CURRENT LIABILITIES 968,605 807,114 LONG TERM LIABILITIES Deferred Income Taxes Payable 127,691 127,691 STOCKHOLDERS' EQUITY Preferred Stock, No Par Value - - Common Stock, No Par Value; authorized 8,000,000 shares; issued and outstanding, 3,653,315 shares (12/31/00) and 3,787,476 shares (3/31/00) 2,402,991 2,687,087 Retained Earnings 10,833,360 9,912,377 TOTAL STOCKHOLDERS' EQUITY 13,236,351 12,599,464 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $14,332,647 $13,534,269
MESA LABORATORIES, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Three Months Ended Ended Dec. 31, 2000 Dec. 31, 1999 Sales $2,010,386 $2,277,250 Cost of Goods Sold 721,515 735,313 Selling, General & Administrative 611,497 734,803 Research and Development 77,683 73,714 Other (Income) and Expenses (45,909) (60,438) 1,364,786 1,483,392 Earnings Before Income Taxes 645,600 793,858 Income Taxes 237,000 280,228 Net Income $ 408,600 $ 513,630 Net Income Per Share (Basic) $ .11 $ .14 Net Income Per Share (Diluted) $ .11 $ .14 Average Common Shares Outstanding (Basic) 3,671,000 3,739,000 Average Common Shares Outstanding (Diluted)3,725,000 3,753,000
MESA LABORATORIES, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Nine Months Nine Months Ended Ended Dec. 31, 2000 Dec. 31, 1999 Sales $6,616,902 $5,946,332 Cost of Goods Sold 2,427,978 2,051,404 Selling, General & Administrative 1,880,903 1,766,492 Research and Development 203,430 204,617 Other (Income) and Expenses (117,358) (193,198) 4,394,953 3,829,315 Earnings Before Income Taxes 2,221,949 2,117,017 Income Taxes 784,693 743,228 Net Income $1,437,256 $1,373,789 Net Income Per Share (Basic) $ .39 $ .36 Net Income Per Share (Diluted) $ .38 $ .36 Average Common Shares Outstanding (Basic) 3,722,000 3,833,000 Average Common Shares Outstanding (Diluted)3,751,000 3,861,000
MESA LABORATORIES, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Nine Months Ended Ended Dec. 31, 2000 Dec. 31, 1999 Cash Flows From Operating Activities: Net Income $1,437,256 $1,373,789 Depreciation and Amortization 390,103 201,943 Change in Assets and Liabilities- (Increase) Decrease in Accounts Receivable (681,717) (489,315) (Increase) Decrease in Inventories (413,429) (372,046) (Increase) Decrease in Prepaid Expenses (15,658) (14,194) Increase (Decrease) in Accounts Payable (42,734) 148,007 Increase (Decrease) in Accrued Liabilities 204,225 94,159 Net Cash (Used) Provided by Operating Activities 878,046 942,343 Cash Flows From Investing Activities: (Increase) Decrease in Intangible Assets - (4,024,546) Capital Expenditures, Net of Retirements (80,053) (43,303) Net Cash (Used) Provided by Investing Activities (80,053) (4,067,849) Cash Flows From Financing Activities: Stock Issued for Acquisitions - 387,500 Treasury Stock Purchases (814,312) (1,829,905) Proceeds From Stock Options Exercised 13,942 71,334 Net Cash (Used) Provided by Financing Activities (800,370) (1,371,071) Net Increase (Decrease) In Cash and Equivalents (2,377) (4,496,577) Cash and Cash Equivalents at Beginning of Period 2,849,709 6,675,417 Cash and Cash Equivalents at End of Period $2,847,332 $2,178,840
MESA LABORATORIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 NOTE A. SUMMARY OF ACCOUNTING POLICIES The summary of the Issuer's significant accounting policies is incorporated by reference to the Company's annual report on Form 10KSB, at March 31, 2000. The accompanying unaudited condensed financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of the results of operations, financial position and cash flows. The results of the interim period are not necessarily indicative of the results for the full year. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES On December 31, 2000, the Company had cash and short term investments of $2,847,332. In addition, the Company had other current assets totaling $5,597,156 and total current assets of $8,444,488. Current liabilities of Mesa Laboratories, Inc. were $968,605 which resulted in a current ratio of 8.7:1. The Company has made net capital asset purchases of $80,053 for the fiscal year-to-date. The Company has instituted a program to repurchase up to 500,000 shares of its outstanding common stock. Under the plan, the shares may be purchased from time to time in the open market at prevailing prices or in negotiated transactions off the market. Shares purchased will be canceled and repurchases will be made with existing cash reserves. During the first nine months of the current fiscal year, the Company repurchased 157,051 shares of its outstanding common stock. RESULTS OF OPERATIONS REVENUE Net sales for the nine months ended December 31, 2000 increased $670,570 or 11% to $ 6,616,902 from the $5,946,332 net sales level achieved for the same nine month period last year. Net sales for the quarter decreased $266,864 or 12% to $2,010,386 from the $2,277,250 net sales level achieved in the same quarter last year. For the first nine months, Medical products increased over 100% which was off-set by 24% decreases in Nusonics and Datatrace sales. The Medical products sales increase was attributable to the addition of the Automata product line. Nusonics products continued its downward trend for the first nine months. The Datatrace line suffered a decrease of 24% during the first nine months. This decline was attributable to a decrease in international sales when compared to the same period last year. In total, third fiscal quarter sales were affected by production delays due to parts shortages. At quarter end, the Company was carrying a backlog of over $400,000 which was more than double normal levels. COST OF GOODS SOLD Cost of goods sold for the first nine months as a percent of net sales was 37% which represents a 3% increase from the 34% level for the same nine month period last year. Cost of goods sold for the current quarter as a percent of net sales was 36%, representing a 4% increase compared to the 32% level in the same quarter last year. The increase realized during the first nine months of fiscal 2001 was attributable to changing mix of products sold due to the addition of the new Automata products and increasing sales of Reprocessing products. SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expenses for the first nine months increased 6% or $114,411 to $1,880,903 from $1,766,492 in the same period last year. For the current quarter, selling, general and administrative expenses totaled $611,497, which was down 17% or $123,306 from $734,803 expended in the same quarter one year ago. For the first nine months, marketing expenses accounted for a decrease of less than one percent with Medical marketing expenses gaining 58% from the prior year and Nusonics marketing expenses decreasing over 37%. The increased marketing expense for the Medical products can be attributed to increased advertising, compensation and telephone costs in marketing its new Automata products and is lower than the rate of increase in Medical sales dollars. Decreased Nusonics marketing expenses are attributed to lower commission and advertising costs. For the first nine months, Datatrace marketing costs decreased 13%. Administration costs for the first nine months increased 14% due to increased amortization and consultant expense associated with the acquisition of Automata Instrumentation, Inc. RESEARCH AND DEVELOPMENT Research and development for the first nine months decreased to $203,430 from $204,617 which represents a decrease of less than 1% from the same period last year. Research and development for the quarter was $77,683 which represents an increase of $3,969 or 5% from the $73,714 level expensed in the same quarter last year. During the first nine months of fiscal 2001, the change in research and development costs was negligible. For the third fiscal quarter, spending increased due mainly to increased labor costs for prototype development of the Company's new Datatrace logging products. NET INCOME Net income for the nine months ended December 31, 2000 increased 5% to $1,437,256 or $.38 per share from $1,373,789 or $.36 per share last year. Net income for the quarter was $408,600 or $.11 per share compared to net income of $513,630 or $.14 per share in the same quarter last year. During the first nine months, net income increased due chiefly to increased revenue levels. This increase for the periods was partially off-set by higher amortization costs and lower interest income due to the acquisition of Automata Instrumentation, Inc. For the fiscal third quarter, net income decreased due chiefly to lower revenue levels. PART II-OTHER INFORMATION None. MESA LABORATORIES, INC. DECEMBER 31, 2000 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Issuer has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MESA LABORATORIES, INC. (Issuer) DATED: 2/14/01 BY: /s/ Luke R. Schmieder . Luke R. Schmieder President, Chief Executive Officer, Treasurer and Director DATED: 2/14/01 BY: /s/ Steven W. Peterson . Steven W. Peterson Vice President-Finance, Chief Financial and Accounting Officer and Secretary [ARTICLE] 5 [PERIOD-TYPE] 9-MOS [FISCAL-YEAR-END] MAR-31-2001 [PERIOD-END] DEC-31-2000 [CASH] 2,847,332 [SECURITIES] 0 [RECEIVABLES] 3,077,520 [ALLOWANCES] (10,000) [INVENTORY] 2,374,484 [CURRENT-ASSETS] 8,444,488 [PP&E] 2,968,379 [DEPRECIATION] (1,386,054) [TOTAL-ASSETS] 14,332,647 [CURRENT-LIABILITIES] 968,605 [BONDS] 0 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [COMMON] 2,402,991 [OTHER-SE] 10,833,360 [TOTAL-LIABILITY-AND-EQUITY] 14,332,647 [SALES] 6,616,902 [TOTAL-REVENUES] 6,616,902 [CGS] 2,427,978 [TOTAL-COSTS] 4,512,311 [OTHER-EXPENSES] 0 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] 0 [INCOME-PRETAX] 2,221,949 [INCOME-TAX] 784,693 [INCOME-CONTINUING] 1,437,256 [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 [NET-INCOME] 1,437,256 [EPS-BASIC] .39 [EPS-DILUTED] .38