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, 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 4,305,801 shares of the Issuer's common stock, no par value,
outstanding as of December 31, 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 $ 3,330,514 $ 1,789,632
Accounts Receivable, Net 1,737,815 2,134,443
Inventories 1,920,539 2,006,773
Prepaid Income Tax - 55,395
Prepaid Expenses 31,507 35,070
Deferred Income Taxes 89,835 89,835
TOTAL CURRENT ASSETS 7,110,210 6,111,148
PROPERTY, PLANT &
EQUIPMENT, NET 1,571,137 1,577,544
OTHER ASSETS
Patents, Trademarks and
Covenants, Net 1,007,640 1,103,177
TOTAL ASSETS $ 9,688,987 $ 8,791,869
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 61,915 $ 100,733
Accrued Salaries &
Payroll Taxes 187,525 289,643
Other Accrued Expenses 239,839 268,736
Taxes Payable 66,364 36,644
TOTAL CURRENT LIABILITIES 555,643 695,756
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,
4,305,801 shares (12/31/96)
and 4,314,157 shares (3/31/96)3,300,036 3,450,141
Retained Earnings 5,775,173 4,587,837
TOTAL STOCKHOLDERS' EQUITY 9,075,209 8,037,978
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 9,688,987 $ 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
Dec 31, 1996 Dec 31, 1995
<S> <C> <C>
Sales $ 2,108,845 $ 2,216,574
Cost of Goods Sold 795,505 888,253
Selling, General &
Administrative 535,239 551,658
Research and Development 75,390 52,292
Other (Income) and
Expenses (32,828) (15,895)
1,373,306 1,476,308
Earnings Before
Income Taxes 735,539 740,266
Income Taxes 249,000 259,100
Net Income $ 486,539 $ 481,166
Net Income Per Share of
Common Stock $ .11 $ .11
Weighted Average Number of
Shares Outstanding 4,480,000 4,401,000
</TABLE>
Page 3 of 9
ITEM 1. FINANCIAL STATEMENTS (CONTINUED) FORM 10-QSB
<TABLE>
MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Nine Months Nine Months
Ended Ended
Dec 31, 1996 Dec 31, 1995
<S> <C> <C>
Sales $ 5,754,358 $ 5,668,666
Cost of Goods Sold 2,227,944 2,218,516
Selling, General &
Administrative 1,633,692 1,538,503
Research and
Development 178,734 201,816
Other (Income) and
Expenses (83,348) (36,301)
3,957,022 3,922,534
Earnings Before
Income Taxes 1,797,336 1,746,132
Income Taxes 610,000 611,100
Net Income $ 1,187,336 $ 1,135,032
Net Income Per Share of
Common Stock $ .26 $ .26
Weighted Average Number of
Shares Outstanding 4,502,000 4,352,000
</TABLE>
Page 4 of 9
ITEM 1. FINANCIAL STATEMENTS (CONTINUED) FORM 10-QSB
<TABLE>
MESA LABORATORIES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Nine Months
Ended Ended
Dec 31, 1996 Dec 31, 1995
<S> <C> <C>
Increase (Decrease) in Cash and Cash
Equivalents
Cash Flows From Operating Activities:
Net Income $ 1,187,336 $ 1,135,032
Depreciation and
Amortization 188,511 217,939
Change in Assets and Liabilities-
(Increase) Decrease in
Accounts Receivable 396,628 (235,519)
(Increase) Decrease in
Inventories 86,234 (37,597)
(Increase) Decrease in
Prepaid Expenses 58,958 69,488
(Increase) Decrease in
Deposits - 6,434
Increase (Decrease) in
Accounts Payable (38,818) (16,357)
Increase (Decrease) in
Accrued Liabilities (101,295) (25,622)
Net Cash (Used) Provided by Operating
Activities 1,777,554 1,113,798
Cash Flows From Investing Activities:
(Increase) Decrease in,
Patents and Trademarks (4,001) (1,549)
Capital Expenditures,
Net of Retirements (82,566) (404,755)
Net Cash (Used) Provided by
Investing Activities (86,567) (406,304)
Cash Flows From Financing Activities:
Common Stock Repurchases (155,747) (30,815)
Proceeds From Stock Options
Exercised 5,642 82,262
Net Cash (Used) Provided by
Financing Activities (150,105) 51,447
Net Increase (Decrease) In
Cash and Equivalents 1,540,882 758,941
Cash and Cash Equivalents at Beginning
of Period 1,789,632 402,913
Cash and Cash Equivalents
at End of Period $ 3,330,514 $1,161,854
</TABLE>
Page 5 of 9
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)FORM 10-QSB
MESA LABORATORIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 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 December 31, 1996, the Company had cash and cash equivalents
of $3,330,514. In addition, the Company had other current assets
totaling $3,779,696 and total current assets of $7,110,210. Current
liabilities of Mesa Laboratories, Inc. were $555,643 which resulted in
a current ratio of 12.8:1.
The Company has made net capital asset purchases of $82,566 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 December 31,
1996, the Company has purchased 197,320 shares of its common stock at
a cost of $589,842. 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 nine months ended December 31, 1996 increased
$85,692 or 2% to $5,754,358 from the $5,668,666 net sales level
achieved for the same nine month period last year. Net sales for the
quarter decreased $107,729 to $2,108,845 from the $2,216,574 net sales
level achieved in the same quarter last year. For the first nine and third
fiscal quarter, the Medical and Nusonics product groups showed increases
which were off-set by a decrease in Datatrace sales. Factors currently
limiting growth in Datatrace sales include delays in introducing the new
humidity logger and the current weakness in key European markets.
COST OF GOODS SOLD
Cost of goods sold for the first nine 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 38% which represents
a decrease of 2% 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
continues to be phased into production.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the first nine
months rose 6% or $95,189 to $1,633,692 from $1,538,503 in the same
period last year. Selling, general and administrative expenses for
the current quarter totaled $535,239 which was down 3% or $16,419 from
$551,658 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.
RESEARCH AND DEVELOPMENT
Research and development for the first nine months decreased to
$178,734 from $201,816 last year. Research and development for the
quarter was $75,390 which represents a $23,098 increase in expense in
relation to the same quarter last year. For the year-to-date, research
and development spending has decreased due to a
reduction in salary expense, which is being partially off-set by
consulting expenses. Research and development expenses increased during the
third quarter due to increased product development activity.
Page 7 of 9
NET INCOME FORM 10-QSB
Net income for the nine months ended December 31, 1996, increased
5% to $1,187,336 or $.26 per share from $1,135,032 or $.26 per share last
year. Net income for the quarter was $486,539 or $.11 per share which
rose 1% compared to net income of $481,166 or $.11 per share in the
same quarter last year. During the third quarter and first nine
months of the fiscal year, net income remained very strong exceeding 20% of net
sales. This trend during the first half of the fiscal year
was attributable to a decrease in Research and Development expense. During
the third quarter and for the remainder of the fiscal year, reductions in
Datatrace manufacturing cost will be the key contributor to net income strength.
PART II-OTHER INFORMATION
None.
Page 8 of 9
FORM 10-QSB
MESA LABORATORIES, INC.
DECEMBER 31, 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: December 14, 1997 BY: /S/Luke R. Schmieder
Luke R. Schmieder
President, Chief Executive
Officer, Treasurer and
Director
DATED: December 14, 1997 BY: /S/Steven W. Peterson
Steven W. Peterson
Vice President-Finance, Chief
Financial and Accounting Officer
and Secretary
Page 9 of 9
