UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (date of earliest event report)
December 7, 1999
MESA LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
Colorado 0-11740 84-0872291
------------------------- ------------------------ ------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or Identification No.)
organization)
12100 W. Sixth Avenue, Lakewood, Colorado 80228
-----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 987-8000
None
-----------------------------------------------------------------------
(Former name or former address, if changes since last report)
<PAGE>
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) The registrant is filing the required financial statements in connection
with its acquisition of certain assets of Automata Instrumentation, Inc. on
December 7, 1999 on this amendment to Form 8-K.
(b) The registrant is also filing the required pro forma information in
connection with the acquisition described in Item 7a above on this
amendment to Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MESA LABORATORIES, INC.
Date: February 22, 2000 By: /s/ Steve Peterson
--------------------------
Steve Peterson
Chief Financial Officer
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Table of Contents
Page
Independent Auditors' Report..........................................1
Financial Statements
Balance Sheets.....................................................2
Statements of Operations and Retained Earnings.....................3
Statements of Cash Flows...........................................4
Notes to Financial Statements.........................................5
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders
Automata Instrumentation, Inc.
Scottsdale, Arizona
We have audited the accompanying balance sheet of Automata Instrumentation, Inc.
as of December 31, 1998, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Automata Instrumentation, Inc.
at December 31, 1998 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/Ehrhardt Keefe Steiner & Hottman PC
Ehrhardt Keefe Steiner & Hottman PC
February 11, 2000
Denver, Colorado
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Balance Sheets
December 31, October 31,
1998 1999
--------- ---------
Assets (Note 2) (Unaudited)
Current assets
Cash ....................................... $ 16,204 $ 3,303
Accounts receivable ........................ 367,117 483,255
Income tax refund receivable (Note 5) ...... 5,720 --
Inventories ................................ 225,982 410,880
Prepaid expenses ........................... 12,784 17,675
--------- ---------
Total current assets ..................... 627,807 915,113
Property and equipment
Furniture and fixtures ..................... 30,939 30,546
Computer equipment ......................... 47,705 33,805
Equipment .................................. 165,238 179,887
Leasehold improvements ..................... -- 6,091
--------- ---------
243,882 250,329
Less accumulated depreciation .............. (162,033) (169,353)
--------- ---------
Total property and equipment ............. 81,849 80,976
--------- ---------
Other assets
Long-term deferred income tax asset, net
(Note 5) .................................. 19,859 --
Stockholder loan receivable ................ -- 2,469
--------- ---------
19,859 2,469
--------- ---------
Total assets .................................. $ 729,515 $ 998,558
========= =========
Liabilities and Stockholders' Equity
Current liabilities
Line-of-credit (Note 2) .................... $ 411,648 $ 136,171
Cash in excess of bank balance ............. -- 58,940
Accounts payable ........................... 105,498 111,475
Accrued liabilities ........................ 51,091 197,118
Stockholder note payable (Note 3) .......... 20,348 --
Current portion of capital lease obligation
(Note 4) .................................. 6,982 5,118
Deferred income tax liability, net (Note 5) -- 101,656
--------- ---------
Total current liabilities ................ 595,567 610,478
Long-term liabilities
Capital lease obligation, net of current
portion (Note 4) .......................... 11,737 7,852
Long-term deferred income tax liability,
net (Note 5) .............................. -- 6,995
--------- ---------
Total liabilities ........................ 607,304 625,325
Stockholders' equity
Common stock, no par value, 1,000,000 shares
authorized, 2,000 shares issued and
outstanding ............................... 9,406 9,406
Retained earnings .......................... 112,805 363,827
--------- ---------
122,211 373,233
--------- ---------
Total liabilities and stockholders' equity .... $ 729,515 $ 998,558
========= =========
See notes to financial statements.
- 2 -
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Statements of Operations and Retained Earnings
<TABLE>
<CAPTION>
Year Ended Ten Months Ended
December 31, October 31,
----------- ----------------------------
1998 1999 1998
----------- ----------- -----------
(Unaudited)
<S> <C> <C> <C>
Sales ............................. $ 2,757,179 $ 2,846,441 $ 2,331,507
Cost of goods sold ................ 1,349,619 1,181,613 1,141,256
----------- ----------- -----------
Gross profit ...................... 1,407,560 1,664,828 1,190,251
Selling, general and administrative
expenses ......................... 1,491,472 1,234,138 1,082,234
----------- ----------- -----------
(Loss) income from operations ..... (83,912) 430,690 108,017
Other income (expenses)
Other income ................... 7,216 9,237 359
Loss on sale of assets ......... (5,964) -- --
Interest expense ............... (31,281) (22,789) (25,246)
----------- ----------- -----------
(30,029) (13,552) (24,887)
----------- ----------- -----------
Net (loss) income before taxes .... (113,941) 417,138 83,130
Income tax benefit (provision) .... 46,927 (166,116) (17,973)
----------- ----------- -----------
Net (loss) income ................. (67,014) 251,022 65,157
Retained earnings - beginning of
period ........................... 179,819 112,805 179,819
----------- ----------- -----------
Retained earnings - end of period . $ 112,805 $ 363,827 $ 244,976
=========== =========== ===========
</TABLE>
See notes to financial statements.
- 3 -
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Statements of Cash Flow
<TABLE>
<CAPTION>
Year Ended Ten Months Ended
December 31, ------------------------
1998 1999 1998
--------- --------- ---------
(Unaudited)
<S> <C> <C> <C>
Cash flows from operating activities
Net (loss) income ................ $ (67,014) $ 251,022 $ 65,157
--------- --------- ---------
Adjustments to reconcile net
(loss) income to cash provided
by operating activities
Depreciation and amortization ... 50,540 26,944 37,789
Deferred income taxes ........... (41,207) 126,041 15,112
Loss on sale of property and
equipment ...................... 5,964 -- 5,964
Changes to certain assets and
liabilities
Accounts receivable ........... (57,418) (116,138) (68,964)
Income tax refund receivable .. (5,720) 5,720 --
Inventories ................... (13,719) (184,898) (187,829)
Prepaid expenses .............. (7,918) (4,891) (3,797)
Accounts payable .............. 50,799 5,977 106,552
Accrued liabilities ........... 3,634 146,027 9,008
--------- --------- ---------
(15,045) 4,782 (86,165)
--------- --------- ---------
Net cash (used) provided by
operating activities ....... (82,059) 255,804 (21,008)
--------- --------- ---------
Cash flows from investing activities
Purchase of property and equipment (9,402) (26,071) (9,402)
--------- --------- ---------
Net cash used by investing
activities ................. (9,402) (26,071) (9,402)
--------- --------- ---------
Cash flows from financing activities
Cash in excess of bank balance ... (22,803) 58,940 (22,803)
Net borrowings (payments) on
line-of-credit .................. 119,045 (275,477) 57,358
Proceeds from (payments toward)
stockholder loans ............... 15,062 (20,348) 15,062
Principal payments on capital
lease obligations ............... (3,639) (5,749) (3,215)
--------- --------- ---------
Net cash provided (used) by
financing activities ....... 107,665 (242,634) 46,402
--------- --------- ---------
Net increase (decrease) in cash .... 16,204 (12,901) 15,992
Cash - beginning of period ......... -- 16,204 --
--------- --------- ---------
Cash - end of period ............... $ 16,204 $ 3,303 $ 15,992
========= ========= =========
</TABLE>
Supplemental disclosures
Cash paid during the year for interest and income taxes $31,281 and
$5,720, respectively.
Cash paid during the periods ended October 31, 1999 and 1998 for
interest and income taxes was $22,789 and $5,100 and $25,246 and $2,860,
respectively.
Supplemental schedule of non-cash investing and financing activities During the
year ended December 31, 1998, the Company acquired equipment by entering
into a capital lease of $22,359.
See notes to financial statements.
- 4 -
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Organization
Automata Instrumentation, Inc. (the "Company") was incorporated July 3, 1986 in
the State of Arizona with the intent to conduct biomedical engineering. The
Company currently manufactures and services dialysis instruments which are sold
worldwide. The Company also provides an independent repair center for
hemodialysis system circuit card assemblies and modules.
Interim Financial Statements (Unaudited)
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments (consisting of only normal recurring accruals) necessary
to present fairly the financial position of the Company at October 31, 1999 and
the results of its operations and changes in cash flows for the ten months ended
October 31, 1999 and 1998. The results of operations for the ten months ended
October 31, 1999 and 1998 are not necessarily indicative of the results to be
expected for the full year.
Cash and Cash Equivalents
The Company considers short-term investments with original maturities of ninety
days or less to be cash and cash equivalents.
Inventories
Inventories are valued at the lower of first-in, first-out cost or market value.
Inventories consist of raw materials ($149,911), work-in-process ($29,190), and
finished goods ($46,811).
Property and Equipment
Property and equipment are stated at cost. Property and equipment are
depreciated over their estimated service lives of three to seven years using the
straight-line method.
Revenue Recognition
Revenue is recognized when the product is delivered to the customer.
Advertising Costs
The Company expenses advertising costs as incurred. Advertising expense for the
year ended December 31, 1998 was $28,065.
- 5 -
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies (continued)
Research and Development Costs
The Company expenses research and development costs in the year they are
incurred. Research and development cost charged to expense for the year ended
December 31, 1998 was $358,866.
Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Deferred tax liabilities and assets are determined
based on the difference between the financial statements and tax basis of assets
and liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. The measurement of deferred tax assets is
reduced, if necessary, by the amount of any tax benefits that, based on
available evidence, are not expected to be realized.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2 - Line-of-credit
The Company has a $400,000 line-of-credit (exceeded at December 31, 1998),
interest at 3.5% over the 30 day commercial paper rate (8.6% at December 31,
1998). The line-of-credit is collateralized by the assets of the Company and a
personal guarantee of the principal stockholder. The amount outstanding on this
line at December 31, 1998 is $411,648.
Note 3 - Stockholder Note Payable
Note payable stockholder consisted of an unsecured note, due on demand, with
interest payable annually at seven percent (7%). Balance at December 31, 1998
was $20,348.
Note 4 - Capital Lease Obligation
The Company leases equipment under a capital lease having monthly payments of
$766 per month that expires May 2001.
- 6 -
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Notes to Financial Statements
Note 4 - Capital Lease Obligation (continued)
The cost of equipment under capital lease at December 31, 1998 was approximately
$22,000 with related accumulated depreciation of $2,400.
Future lease payments under capital leases are as follows:
Year Ending December 31,
------------------------
1999 $ 9,192
2000 9,192
2001 3,830
--------
Total minimum lease payments 22,214
Less interest imputed (3,495)
--------
Present value of minimum lease
payments 18,719
Current portion (6,982)
--------
Long-term portion $ 11,737
========
Note 5 - Income Taxes
The components of the income tax benefit (provision) are as follows:
December 31,
1998
----------
Deferred
Federal $ 43,173
State 3,754
----------
$ 46,927
==========
The current deferred tax assets and the long-term deferred tax liabilities
consist of the following:
December 31,
1998
----------
Long-term deferred tax (liability) asset
Depreciation $ (11,249)
Net operating loss 31,108
----------
$ 19,859
==========
- 7 -
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Notes to Financial Statements
Note 5 - Income Taxes (continued)
During the year ended December 31, 1998, the Company generated a net operating
loss of approximately $82,000 for income tax reporting purposes. The $82,000 is
available to carry forward for federal income tax purposes and, if unused, will
expire in 2018 and represents an approximate $31,000 in deferred tax benefit as
of December 31, 1998.
Note 6 - Commitments
Operating Leases
The Company leases its office and production facility from another company owned
by the shareholders. The Company pays monthly lease payments of $8,500 plus
insurance and real property taxes on the property. The lease expires on June 30,
2023, with an option to renew. Effective January 1, 1999, the monthly lease
payments were negotiated to $11,000. Total lease expense for the year ended
December 31, 1998 was $102,000. At December 31, 1998, the Company owed
approximately $11,700 for property taxes under the lease.
The Company also leases certain office equipment and automobiles under operating
lease agreements which provide for the payment of rent totaling approximately
$1,900 per month. Rent expense under these operating leases totaled $20,000 for
the year ended December 31, 1998.
Future minimum rental payments are as follows:
Related
Year Ending December 31, Other Party Total
------------------------ -------- --------- ---------
1999 $ 27,300 $ 132,000 $ 159,300
2000 30,600 132,000 162,600
2001 22,400 132,000 154,400
2002 9,200 132,000 141,200
2003 6,500 132,000 138,500
Thereafter 3,800 2,574,000 2,577,800
-------- ---------- ---------
$ 99,800 $3,234,000 $3,333,800
======== ========== ==========
Warranty Reserve
The Company offers a warranty on some of its products which range from six
months to three years after purchase. The Company has estimated its anticipated
costs for warranty work on outstanding products to be approximately $8,300 as of
December 31, 1998.
- 8 -
<PAGE>
AUTOMATA INSTRUMENTATION, INC.
Notes to Financial Statements
Note 7 - Economic Dependency
The Company's purchases of a custom made PH sensor for three of the meters they
manufacture are highly concentrated with one major vendor located in the United
States. In the event this manufacturer is unable to supply this specialized
sensor, there are other manufactures that could provide the product.
Also, the Company has several customers that individually exceeded 10% of total
revenues.
Note 8 - Employee Benefit Plan
The Company has a qualified 401(k) plan (the "Plan") for those employees who
meet certain eligibility requirements as set forth in the Plan. The Company may
make discretionary contributions to the Plan. The Company made no contributions
for the year ended December 31, 1998.
- 9 -
<PAGE>
UNAUDITED PRO FORMA COMBINED
STATEMENTS OF OPERATIONS AND UNAUDITED PRO FORMA
COMBINED BALANCE SHEETS
The following unaudited pro forma combined statements of operations for the year
ended March 31, 1999 (Mesa Laboratories, Inc.) and December 31, 1998 (Automata
Instrumentation, Inc.) and the nine month period ended December 31, 1999 (Mesa
Laboratories, Inc.) and September 30, 1999 (Automata Instrumentation, Inc.) and
the unaudited pro forma combined balance sheet as of December 31, 1999 (Mesa
Laboratories, Inc.) and September 30, 1999 (Automata Instrumentation, Inc.) give
effect to Mesa Laboratories, Inc.'s purchase of certain assets of Automata
Instrumentation, Inc. effective December 7, 1999, including the related pro
forma adjustments described in the note thereto. The unaudited pro forma
statements of operations have been prepared as if the proposed transactions
occurred on April 1, 1998. The unaudited pro forma balance sheet has been
prepared as if the transaction was recorded on Mesa Laboratories, Inc.'s books
as of December 31, 1999. These pro forma statements are not necessarily
indicative of the results of operations or the financial positions as they may
be in the future or as they might have been had the transaction become effective
on the above mentioned date.
The unaudited pro forma combined statement of operations for the year ended
March 31, 1999 (Mesa Laboratories, Inc.) and December 31, 1998 (Automata
Instrumentation, Inc.) and March 31, 1999 and the nine month period ended
December 31, 1999 (Mesa Laboratories, Inc.) and September 30, 1999 (Automata
Instrumentation, Inc.) includes the results of operations of Mesa Laboratories,
Inc. and Automata Instrumentation, Inc.
The unaudited pro forma combined statements of operations and the unaudited pro
forma combined balance sheets should be read in conjunction with the separate
historical financial statements and notes thereto of Mesa Laboratories, Inc. and
Automata Instrumentation, Inc.
<PAGE>
Notes to Unaudited Pro Forma Combined Financial Statements
The following notes and adjustments are related to Mesa Laboratories, Inc.'s
("Mesa") purchase of certain assets of Automata Instrumentation, Inc.
("Automata").
(1) This entry removes Automata's assets that are already included in Mesa's
books as of December 31, 1999 since the acquisition was recorded as of
December 7, 1999.
On December 7, 1999, Mesa obtained the following and recorded the
transaction using the purchase method of accounting:
Current assets $ 854,500
Property, plant and equipment 30,000
Intangible assets 4,012,000
Current liabilities (409,000)
----------
Price paid $4,487,500
==========
Cash paid $4,100,000
==========
Stock issued (100,000 shares at $3.87
per share) $387,500
==========
(2) This entry eliminates sales and related cost of sales associated with
Automata's depot services. Mesa did not purchase the assets related to
this line of operation.
(3) This entry records amortization of intangible assets acquired in the
purchase, amortized over 25 years.
(4) This entry eliminates officer's salaries of Automata.
(5) This entry eliminates building rent related to an office lease which will
not be assumed by Mesa.
(6) Pro forma income tax adjustment a flat rate of 35% effective tax rate.
<PAGE>
Unaudited Pro Forma Combined Balance Sheet
<TABLE>
<CAPTION>
Mesa Automata
Laboratories Instrumentation,
Inc. Inc. Pro Forma Adjustments
Assets December 31, September 30, -----------------------------
1999 1999 Total Debit Credit Combined
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Current assets
Cash and cash
equivalents ....... $ 2,178,840 $ 25,136 $ 2,203,976 $ -- $ 25,136(1) $ 2,178,840
Accounts receivable,
net ............... 2,233,381 518,688 2,752,069 -- 518,688(1) 2,233,381
Inventories ........ 2,113,861 378,022 2,491,883 -- 378,022(1) 2,113,861
Prepaid expenses ... 48,073 17,567 65,640 -- 17,567(1) 48,073
Deferred income
taxes ............. 91,000 -- 91,000 -- -- 91,000
------------ ------------ ------------ ------------ ------------ ------------
Total current
assets ........... 6,665,155 939,413 7,604,568 -- 939,413 6,665,155
------------ ------------ ------------ ------------ ------------ ------------
Property, plant and
equipment, net ...... 1,563,627 59,775 1,623,402 -- 59,775(1) 1,563,627
Other assets
Intangible assets,
net ............... 4,655,254 -- 4,655,254 -- -- 4,655,254
------------ ------------ ------------ ------------ ------------ ------------
Total asset .......... $ 12,884,036 $ 999,188 $ 13,883,224 $ -- $ 999,188 $ 12,884,036
============ ============ ============ ============ ============ ============
Liabilities and
Stockholders' Equity
Current liabilities
Line-of-credit ..... $ -- $ 241,390 $ 241,390 $ 241,390(1) $ -- $ --
Accounts payable ... 237,407 110,383 347,790 110,383(1) -- 237,407
Accrued salaries
and payroll taxes .. 252,180 -- 252,180 -- -- 252,180
Other accrued
expenses .......... 198,852 15,881 214,733 15,881(1) -- 198,852
Taxes payable ...... 209,254 93,477 302,731 93,477(1) -- 209,254
------------ ------------ ------------ ------------ ------------ ------------
Total current
liabilities ...... 897,693 461,131 1,358,824 461,131 -- 897,693
Long-term liabilities
Deferred income
taxes payable ..... 78,000 -- 78,000 -- -- 78,000
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities . 975,693 461,131 1,436,824 461,131 -- 975,693
------------ ------------ ------------ ------------ ------------ ------------
Stockholders' equity
Preferred stock,
no par value ...... -- -- -- -- -- --
Common stock, no
par value;
authorized
8,000,000 (Mesa)
and 1,000,000
(Automata) shares;
issued and
outstanding,
3,798,476 (Mesa)
and 2,000
(Automata) ........ 2,694,958 9,405 2,704,363 9,405(1) -- 2,694,958
Retained earnings .. 9,213,385 528,652 9,742,037 528,652(1) -- 9,213,385
------------ ------------ ------------ ------------ ------------ ------------
Total
stockholders'
equity ........... 11,908,343 538,057 12,446,400 538,057 -- 11,908,343
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities
and shareholders'
equity .............. $ 12,884,036 $ 999,188 $ 13,883,224 $ 999,188 $ -- $ 12,884,036
============ ============ ============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unaudited Pro Forma Combined Statement of Operations for the Year Ended March 31, 1999
(Mesa Laboratories, Inc.) and December 31, 1998 (Automata Instrumentation, Inc.)
Mesa Automata Pro Forma Adjustments
Laboratories Instrumentation, ------------------------------
Inc. Inc. Total Debit Credit Combined
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Sales .............. $ 8,083,273 $ 2,757,179 $10,840,452 $ 639,800(2) $ -- $10,200,652
Cost of sales ...... 2,660,217 1,349,619 4,009,836 -- 160,000(2) 3,849,836
----------- ----------- ----------- ----------- ----------- -----------
Gross profit ....... 5,423,056 1,407,560 6,830,616 639,800 160,000 6,350,816
Operating expenses
Selling, general
and administrative 2,231,221 1,491,472 3,722,693 160,480(3) 186,400(4)
102,000(5) 3,594,773
Research and
development ..... 236,769 -- 236,769 -- -- 236,769
----------- ----------- ----------- ----------- ----------- -----------
Total operating
expenses ....... 2,467,990 1,491,472 3,959,462 160,480 288,400 3,831,542
----------- ----------- ----------- ----------- ----------- -----------
Operating income ... 2,955,066 (83,912) 2,871,154 800,280 448,400 2,519,274
Interest income,
net and other ..... 271,362 (30,029) 241,333 -- -- 241,333
----------- ----------- ----------- ----------- ----------- -----------
Earnings before
income taxes ...... 3,226,428 (113,941) 3,112,487 800,280 448,400 2,760,607
Income taxes ....... 1,123,000 (46,927) 1,076,073 -- 110,000 966,073
----------- ----------- ----------- ----------- ----------- -----------
Net income ......... $ 2,103,428 $ (67,014) $ 2,036,414 $ 800,280 $ 558,400 $ 1,794,534
=========== =========== =========== =========== =========== ===========
Net income per share
- basic $ .50 $ .42
=========== ===========
Net income per share
- diluted $ .49 $ .42
=========== ===========
Average common
shares outstanding
- basic 4,236,000 4,236,000
=========== ===========
Average common
shares outstanding
- diluted 4,272,000 4,272,000
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unaudited Pro Forma Combined Statement of Operations for the Nine Months Ended December 31, 1999
(Mesa Laboratories, Inc.) and September 30, 1999 (Automata Instrumentation, Inc.)
Mesa Automata Pro Forma Adjustments
Laboratories Instrumentation, ------------------------------
Inc. Inc. Total Debit Credit Combined
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Sales .............. $ 5,946,332 $ 2,562,342 $ 8,508,674 $ 467,000(2) $ -- $ 8,041,674
Cost of sales ...... 2,051,404 1,053,913 3,105,317 -- 117,000(2) 2,988,317
----------- ----------- ----------- ----------- ----------- -----------
Gross profit ....... 3,894,928 1,508,429 5,403,357 467,000 117,000 5,053,357
Operating expenses
Selling, general
and administrative 1,766,492 983,776 2,750,268 120,000(3) 41,800(4)
78,000(5) 2,750,468
Research and
development ..... 204,617 -- 204,617 -- -- 204,617
----------- ----------- ----------- ----------- ----------- -----------
Total operating
expenses ....... 1,971,109 983,776 2,954,885 120,000 119,800 2,955,085
----------- ----------- ----------- ----------- ----------- -----------
Operating income ... 1,923,819 524,653 2,448,472 587,000 236,800 2,098,272
Interest income,
net and other ..... 193,198 (9,652) 183,546 -- -- 183,546
----------- ----------- ----------- ----------- ----------- -----------
Earnings before
income taxes ...... 2,117,017 515,001 2,632,018 587,000 236,800 2,281,818
Income taxes ....... 743,228 97,927 841,155 -- 43,000 798,155
----------- ----------- ----------- ----------- ----------- -----------
Net income ......... $ 1,373,789 $ 417,074 $ 1,790,863 $ 587,000 $ 279,800 $ 1,483,663
=========== =========== =========== =========== =========== ===========
Net income per share
- basic $ .35 $ .38
=========== ===========
Net income per share
- diluted $ .35 $ .37
=========== ===========
Average common
shares outstanding
- basic 3,933,000 3,933,000
=========== ===========
Average common
shares outstanding
- diluted 3,961,000 3,961,000
=========== ===========
</TABLE>
