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 September 30, 1996
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
3904 YOUNGFIELD STREET, WHEAT RIDGE, COLORADO 80033
(Previous Address) (Previous Zip
Code)
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 4,330,901 shares of the Issuer's common stock,
no par value, outstanding as of September 30, 1996.
Page 1 of 9
ITEM 1. FINANCIAL STATEMENTS FORM 10-QSB
<TABLE>
MESA LABORATORIES, INC.
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
SEPTEMBER 30, 1996 MARCH 31, 1996
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 3,123,077 $ 1,789,632
Accounts Receivable, Net 1,523,032 2,134,443
Inventories 1,933,317 2,006,773
Prepaid Income Tax - 55,395
Prepaid Expenses 12,444 35,070
Deferred Income Taxes 89,835 89,835
TOTAL CURRENT ASSETS 6,681,705 6,111,148
PROPERTY, PLANT &
EQUIPMENT, NET 1,585,873 1,577,544
OTHER ASSETS
Patents, Trademarks and
Covenants, Net 1,040,819 1,103,177
TOTAL ASSETS $ 9,308,397 $ 8,791,869
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 134,598 $ 100,733
Accrued Salaries & Payroll Taxes 150,528 289,643
Other Accrued Expenses 218,754 268,736
Taxes Payable 1,964 36,644
TOTAL CURRENT LIABILITIES 505,844 695,756
LONG TERM LIABILITIES
Deferred Income Taxes Payable 58,135 58,135
STOCKHOLDERS' EQUITY
Preferred Stock, No Par Value - -
Common Stock, No Par Value;
authorized 8,000,000 shares;
issued and outstanding,
4,330,901 shares (9/30/96)
and 4,314,157 shares (3/31/96) 3,455,783 3,450,141
Retained Earnings 5,288,635 4,587,837
TOTAL STOCKHOLDERS' EQUITY 8,744,418 8,037,978
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 9,308,397 $ 8,791,869
</TABLE>
Page 2 of 9
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)FORM 10-QSB
<TABLE>MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Three Months
Ended Ended
Sept 30, 1996 Sept 30, 1995
<S> <C> <C>
Sales $ 1,802,944 $ 1,798,904
Cost of Goods Sold 704,385 720,729
Selling, General & Administrative 532,602 500,286
Research and Development 51,157 69,642
Other (Income) and Expenses (27,557) (10,476)
1,260,587 1,280,181
Earnings Before Income Taxes 542,357 518,723
Income Taxes 184,400 181,600
Net Income $ 357,957 $ 337,123
Net Income Per Share of
Common Stock $ .08 $ .08
Weighted Average Number of
Shares Outstanding 4,500,000 4,362,000
</TABLE>
Page 3 of 9
ITEM 1. FINANCIAL STATEMENTS (CONTINUED) FORM 10-QSB
<TABLE>
MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Six Months Six Months
Ended Ended
Sept 30, 1996 Sept 30, 1995
<S> <C> <C>
Sales $ 3,645,513 $ 3,452,092
Cost of Goods Sold 1,432,439 1,330,262
Selling, General & Administrative 1,098,452 986,845
Research and Development 103,344 149,523
Other (Income) and Expenses (50,520) (20,405)
2,583,715 2,446,225
Earnings Before Income Taxes 1,061,798 1,005,867
Income Taxes 361,000 352,000
Net Income $ 700,798 $ 653,867
Net Income Per Share of
Common Stock $ .16 $ .15
Weighted Average Number of
Shares Outstanding 4,511,000 4,324,000
</TABLE>
Page 4 of 9
ITEM 1. FINANCIAL STATEMENTS (CONTINUED) FORM 10-QSB
<TABLE>
MESA LABORATORIES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Six Months
Ended Ended
Sept 30, 1996 Sept 30, 1995
<S> <C> <C>
Increase (Decrease) in Cash and Cash
Equivalents
Cash Flows From Operating Activities:
Net Income $ 700,798 $ 653,867
Depreciation and Amortization 125,318 143,851
Change in Assets and Liabilities-
(Increase) Decrease in Accounts Receivable 611,411 13,872
(Increase) Decrease in Inventories 73,456 (66,955)
(Increase) Decrease in Prepaid Expenses 78,021 80,353
(Increase) Decrease in Deposits - 2,033
Increase (Decrease) in Accounts Payable 33,865 15,214
Increase (Decrease) in Accrued Liabilities (223,777) (24,670)
Net Cash (Used) Provided by Operating
Activities 1,399,092 817,565
Cash Flows From Investing Activities:
(Increase) Decrease in, Patents and Trademarks (4,001) (1,474)
Capital Expenditures, Net of Retirements (67,288) (353,923)
Net Cash (Used) Provided by Investing Activities (71,289) (355,397)
Cash Flows From Financing Activities:
Common Stock Repurchases - (30,816)
Proceeds From Stock Options Exercised 5,642 55,862
Net Cash (Used) Provided by Financing Activities 5,642 25,046
Net Increase (Decrease) In Cash and Equivalents 1,333,445 487,214
Cash and Cash Equivalents at Beginning
of Period 1,789,632 402,913
Cash and Cash Equivalents at End of Period $ 3,123,077 $ 890,127
</TABLE>
Page 5 of 9
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)FORM 10-QSB
MESA LABORATORIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
(Unaudited)
NOTE A. SUMMARY OF ACCOUNTING POLICIES
The summary of the Issuer's significant accounting policies are
incorporated by reference to the Company's annual report on Form
10KSB, at March 31, 1996.
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 September 30, 1996, the Company had cash and cash equivalents
of $3,123,077. In addition, the Company had other current assets
totaling $3,558,628 and total current assets of $6,681,705. Current
liabilities of Mesa Laboratories, Inc. were $505,844 which resulted in
a current ratio of 13.2:1.
The Company has made net capital asset purchases of $67,288 for
the fiscal year-to-date.
During the first quarter of fiscal 1995, the Company announced
its intention to repurchase up to 5% 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 used for general corporate purposes
and repurchases will be with existing cash reserves. At September 30,
1996, the Company has purchased 172,220 shares of its common stock at
a cost of $434,095. In the fourth quarter of fiscal 1996, the Company
authorized the repurchase of an additional 5% of its outstanding
shares under the same terms as the existing plan.
The Company anticipates that it will be able to meet the working
capital needs of its operations through internally generated cash flow
during the current fiscal year.
Page 6 of 9
FORM 10-QSB
RESULTS OF OPERATIONS
REVENUE
Net sales for the six months ended September 30, 1996 increased
$193,421 or 6% to $3,645,513 from the $3,452,092 net sales level
achieved for the same six month period last year. Net sales for the
quarter increased $4,040 to $1,802,944 from the $1,798,904 net sales
level achieved in the same quarter last year. For the first six
months of the fiscal year all of the product groups showed increases.
For the second fiscal quarter, the Nusonics line continued to show
increasing demand contributing to a sharp increase in backorders by
the end of the quarter.
COST OF GOODS SOLD
Cost of goods sold for the first six months as a percent of net
sales was 39% and unchanged from one year ago. Cost of goods sold for
the current quarter as a percent of net sales was 39% which represents
a decrease of 1% from the 40% level in the same quarter one year ago.
The quarter showed a decrease in cost of goods sold as a percentage of
sales. Most of the decrease realized in the quarter was attributable
to a decrease in Datatrace product costs as a percent of sales. This
decrease in Datatrace material cost occured as the new SMT circuit was
phased into production during the second half of the quarter.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the first six
months rose 11% or $111,607 to $1,098,452 from $986,845 in the same
period last year. Selling, general and administrative expenses for
the current quarter totaled $532,602 which was up 6% or $32,316 from
$500,286 expended in the same quarter one year ago. For the year,
increases throughout the three marketing groups were partially off-set
by a decrease in Administration expense. The largest increase in
sales and marketing cost was incurred by the Nusonics line as demand
for these products continues to increase.
RESEARCH AND DEVELOPMENT
Research and development for the first six months decreased to
$103,344 from $149,523 last year. Research and development for the
quarter was $51,157 which represents a $18,485 decrease in expense in
relation to the same quarter last year. For the year-to-date and
quarter, research and development spending has decreased due to a
reduction in salary expense, which is being partially off-set by
consulting expenses.
Page 7 of 9
NET INCOME FORM 10-QSB
Net income for the six months ended September 30, 1996, increased
7% to $700,798 or $.16 per share from $653,867 or $.15 per share last
year. Net income for the quarter was $357,957 or $.08 per share which
rose 6% compared to net income of $337,123 or $.08 per share in the
same quarter last year. During the second quarter and first six
months of the fiscal year, net income increased at a higher percentage
than net sales. This trend during the first half of the fiscal year
is attributable to a decrease in Research and Development expense. It
is expected that reductions in Datatrace Manufacturing costs should
continue the trend during the second half of the year.
PART II-OTHER INFORMATION
Item 7. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of Mesa Laboratories, Inc. was
held on October 4, 1996. Of the 4,327,151 shares entitled to vote,
3,683,127 were represented either in person or by proxy. A proposal
to create a stock option plan for the benefit of the Company's outside
directors was voted upon and approved by the shareholders, Also, five
directors were elected to serve until the next Annual Meeting of
Shareholders. The five directors elected were:
Luke R. Schmieder H. Stuart Campbell
Paul D. Duke G. Lee Southard
Philip D. Quedenfeld
All director positions stand for election at each Annual Meeting
of Shareholders.
Page 8 of 9
FORM 10-QSB
MESA LABORATORIES, INC.
SEPTEMBER 30, 1996
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: November 12, 1996 BY: /S/Luke R. Schmieder
Luke R. Schmieder
President, Chief Executive
Officer, Treasurer and
Director
DATED: November 12, 1996 BY: /S/Steven W. Peterson
Steven W. Peterson
Vice President-Finance, Chief
Financial and Accounting Officer
and Secretary
Page 9 of 9
