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”),
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
“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
“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
“For the year, revenues were
Financial Results (unaudited, amounts in thousands, except per share data)
Fourth Quarter Fiscal Year 2025
Total revenues were
Full Fiscal Year 2026
Total revenues were
Division Performance
| Revenues | Organic Revenues Growth1 | Core Organic Revenues Growth | ||||||||||
| (Amounts in thousands) | Three Months Ended | Year Ended | Three Months Ended | Year Ended | Three Months Ended | Year Ended | ||||||
| SDC | $ | 29,136 | $ | 101,567 | 17.7 | % | 8.7 | % | 11.5 | % | 4.7 | % |
| BPD | 8,847 | 48,626 | (29.9 | )% | (0.2 | )% | (31.6 | )% | (2.5 | )% | ||
| CS | 13,559 | 53,551 | 2.3 | % | 3.5 | % | 2.1 | % | 3.5 | % | ||
| CG | 12,182 | 45,386 | 5.8 | % | (3.6 | )% | 4.0 | % | (4.9 | )% | ||
| Total | $ | 63,724 | $ | 249,130 | 2.6 | % | 3.4 | % | (0.6 | )% | 1.2 | % |
Sterilization and Disinfection Control (46% of revenues in 4Q26) revenues were
Gross profit percentage increased 270 bps for the quarter and 10 bps for the year (normalizing for
Calibration Solutions (21% of revenues in 4Q26) revenues were
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
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
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
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 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
Mesa Laboratories Contacts:
1-303-987-8000
investors@mesalabs.com
Financial Summary (Unaudited except for the information as of and for the year ended
| Condensed Consolidated Statements of Operations | |||||||||||
| (Amounts in thousands, except per share data) | Three Months Ended | Year Ended | |||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| Revenues | $ | 63,724 | $ | 62,135 | $ | 249,130 | $ | 240,978 | |||
| Cost of revenues | 21,519 | 23,723 | 90,860 | 90,108 | |||||||
| Gross profit | 42,205 | 38,412 | 158,270 | 150,870 | |||||||
| Operating expenses | 39,457 | 36,943 | 139,759 | 134,534 | |||||||
| Operating income | 2,748 | 1,469 | 18,511 | 16,336 | |||||||
| Nonoperating expense (income) | 4,341 | 1,008 | 6,497 | 10,375 | |||||||
| (Loss) earnings before income taxes | (1,593 | ) | 461 | 12,014 | 5,961 | ||||||
| Income tax expense | 2,543 | 7,575 | 5,302 | 7,935 | |||||||
| Net (loss) income | $ | (4,136 | ) | $ | (7,114 | ) | $ | 6,712 | $ | (1,974 | ) |
| Earnings per share (basic) | $ | (0.75 | ) | $ | (1.31 | ) | $ | 1.22 | $ | (0.36 | ) |
| Earnings per share (diluted) | (0.75 | ) | (1.31 | ) | 1.21 | (0.36 | ) | ||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 5,544 | 5,439 | 5,514 | 5,421 | |||||||
| Diluted | 5,544 | 5,439 | 5,565 | 5,421 | |||||||
| Consolidated Condensed Balance Sheets | ||||
| (Amounts in thousands) | ||||
| Cash and cash equivalents | $ | 26,928 | $ | 27,321 |
| Other current assets | 79,340 | 75,364 | ||
| Total current assets | 106,268 | 102,685 | ||
| Noncurrent assets | 321,479 | 330,663 | ||
| Total assets | $ | 427,747 | $ | 433,348 |
| Liabilities | $ | 241,502 | $ | 273,518 |
| Stockholders’ equity | 186,245 | 159,830 | ||
| Total liabilities and stockholders’ equity | $ | 427,747 | $ | 433,348 |
| Reconciliation of Non-GAAP Measures (Unaudited) | |||||||||||||
| GAAP Operating Income (Loss) to Non-GAAP Adjusted Operating Income (“AOI”) | |||||||||||||
| (Amounts in thousands, except per share data) | Three Months Ended | Year Ended | |||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||
| Operating income (GAAP) | $ | 2,748 | $ | 1,469 | $ | 18,511 | $ | 16,336 | |||||
| Amortization of intangible assets | 4,485 | 6,143 | 18,017 | 19,145 | |||||||||
| Stock-based compensation expense | 6,793 | 3,138 | 17,868 | 13,142 | |||||||||
| Depreciation expense | 1,265 | 1,354 | 5,254 | 5,382 | |||||||||
| AOI (non-GAAP) | $ | 15,291 | $ | 12,104 | $ | 59,650 | $ | 54,005 | |||||
| Unusual items – before tax | |||||||||||||
| Non-cash GKE inventory step-up1 | $ | -- | $ | -- | $ | -- | $ | 1,232 | |||||
| GKE integration costs2 | -- | 152 | -- | 1,500 | |||||||||
| Severance costs3 | -- | -- | 848 | -- | |||||||||
| CEO transition costs4 | 2,989 | -- | 2,989 | -- | |||||||||
| Total impact of unusual items on AOI – before tax | $ | 2,989 | $ | 152 | $ | 3,837 | $ | 2,732 | |||||
| AOI excluding unusual items (non-GAAP) | $ | 18,280 | $ | 12,256 | $ | 63,487 | $ | 56,737 | |||||
| AOI per share - basic (non-GAAP) | $ | 2.76 | $ | 2.23 | $ | 10.82 | $ | 9.96 | |||||
| AOI per share - diluted (non-GAAP) | $ | 2.76 | 2.23 | $ | 10.72 | 9.96 | |||||||
| AOI excluding unusual items per share – basic (non -GAAP) | $ | 3.30 | 2.25 | $ | 11.51 | 10.47 | |||||||
| AOI excluding unusual items per share – diluted (non-GAAP) | $ | 3.30 | 2.25 | $ | 11.41 | 10.47 | |||||||
| Weighted average common shares outstanding: | |||||||||||||
| Basic | 5,544 | 5,439 | 5,514 | 5,421 | |||||||||
| Diluted | 5,544 | 5,439 | 5,565 | 5,421 | |||||||||
| 1Non-cash cost of revenues expense associated with the step up to fair value of GKE inventory due to application of purchase accounting | |||||||||||||
| 2GKE integration costs primarily consist of consulting costs for the integration of the acquiree, including the implementation of the enterprise resource planning tool and professional auditing services related to the audit of purchase accounting | |||||||||||||
| 3Severance charges recorded in 2Q26 for individuals in each of our business units and corporate functions. The charges affected employees in each of our | |||||||||||||
| 4CEO transition costs primarily consist of severance costs, fees paid to a search firm, and legal costs. | |||||||||||||
Organic and Core Organic Revenues Growth (Unaudited)
| Three Months Ended | Year Ended | |||
| Total revenues growth | 2.6 | % | 3.4 | % |
| Impact of acquisitions | -- | % | -- | % |
| Organic revenues growth(non-GAAP) | 2.6 | % | 3.4 | % |
| Currency translation | (3.2 | )% | (2.2 | )% |
| Core organic revenues growth(non-GAAP) | (0.6 | )% | 1.2 | % |
Free Cash Flow (Unaudited)
| (Amounts in thousands, except per share data) | Year Ended | |||||
| 2026 | 2025 | |||||
| Net cash provided by operating activities (GAAP) | $ | 42,831 | $ | 46,808 | ||
| Purchases of property, plant and equipment (GAAP) | (3,250 | ) | (4,249 | ) | ||
| Free cash flow (non-GAAP) | $ | 39,581 | $ | 42,559 | ||
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.
