form10q123101.htm
Form 10-QSB
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2001
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
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(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 3,346,968 shares of the Issuer's common stock, no par value,
outstanding as of December 31, 2001.
ITEM 1. FINANCIAL STATEMENTS FORM 10-QSB
MESA LABORATORIES, INC.
BALANCE SHEETS
(UNAUDITED)
December 31, March 31,
2001 2001
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ASSETS
CURRENT ASSETS
Cash and Cash Equivalents ...... $ 3,138,153 $ 2,316,769
Accounts Receivable, Net ....... 2,310,130 3,286,337
Inventories .................... 2,315,510 2,402,847
Prepaid Expenses ............... 344,023 133,408
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TOTAL CURRENT ASSETS ........ 8,107,816 8,139,361
PROPERTY, PLANT & EQUIPMENT, NET . 1,397,757 1,471,662
OTHER ASSETS
Long-term Receivable ........... 385,000 --
Intangible Assets, Net ......... 4,207,942 4,207,942
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TOTAL ASSETS ............... $14,098,515 $13,818,965
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable ............... $ 50,941 $ 353,519
Accrued Salaries & Payroll Taxes 340,724 267,964
Other Accrued Expenses ......... 95,610 108,771
Taxes Payable .................. 32,236 130,461
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TOTAL CURRENT LIABILITIES ........ 519,511 860,715
LONG TERM LIABILITIES
Deferred Income Taxes Payable .. 25,292 25,292
STOCKHOLDERS' EQUITY
Preferred Stock, No Par Value .. -- --
Common Stock, No Par Value;
authorized 8,000,000 shares;
issued and outstanding,
3,346,968 shares (12/31/01)
and 3,542,160 shares (3/31/01) 1,811,842 2,165,549
Retained Earnings .............. 11,741,870 10,767,409
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TOTAL STOCKHOLDERS' EQUITY ....... 13,553,712 12,932,958
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ............. $14,098,515 $13,818,965
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MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Three Months
Ended Ended
December 31, December 31,
2001 2000
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Sales ..................................... $ 2,222,370 $ 2,010,386
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Cost of Goods Sold ........................ 921,413 721,515
Selling, General & Administrative ......... 508,814 611,497
Research and Development .................. 74,212 77,683
Other (Income) and Expenses ............... (15,579) (45,909)
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1,488,860 1,364,786
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Earnings Before Income Taxes .............. 733,510 645,600
Income Taxes .............................. 250,000 237,000
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Net Income ................................ $ 483,510 $ 408,600
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Reported Net Income ....................... $ 483,510 $ 408,600
Add Back: Goodwill Amortization ........... -- 65,667
Add Back: Trademark Amortization .......... -- 24,225
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Adjusted Net Income ....................... $ 483,510 $ 498,492
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Basic Earnings Per Share:
Reported Net Income ....................... $ .14 $ .11
Goodwill Amortization ..................... -- .02
Trademark Amortization .................... -- .01
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Adjusted Net Income Per Share (Basic) ..... $ .14 $ .14
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Diluted Earnings Per Share:
Reported Net Income ....................... $ .14 $ .11
Goodwill Amortization ..................... -- .02
Trademark Amortization .................... -- .00
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Adjusted Net Income Per Share (Diluted) ... $ .14 $ .13
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Average Common Shares Outstanding (Basic) . 3,354,000 3,671,000
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Average Common Shares Outstanding (Diluted) 3,418,000 3,725,000
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MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Nine Months
Ended Ended
December 31, December 31,
2001 2000
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Sales ..................................... $ 6,951,018 $ 6,616,902
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Cost of Goods Sold ........................ 2,757,578 2,427,978
Selling, General & Administrative ......... 1,671,455 1,880,903
Research and Development .................. 230,859 203,430
Other (Income) and Expenses ............... (60,915) (117,358)
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4,598,977 4,394,953
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Earnings Before Income Taxes .............. 2,352,041 2,221,949
Income Taxes .............................. 764,822 784,693
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Net Income ................................ $ 1,587,219 $ 1,437,256
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Reported Net Income ....................... $ 1,587,219 $ 1,437,256
Add Back: Goodwill Amortization ........... -- 197,001
Add Back: Trademark Amortization .......... -- 72,675
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Adjusted Net Income ....................... $ 1,587,219 $ 1,706,932
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Basic Earnings Per Share:
Reported Net Income ....................... $ .46 $ .39
Goodwill Amortization ..................... -- .05
Trademark Amortization .................... -- .02
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Adjusted Net Income Per Share (Basic) ..... $ .46 $ .46
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Diluted Earnings Per Share:
Reported Net Income ....................... $ .46 $ .38
Goodwill Amortization ..................... -- .05
Trademark Amortization .................... -- .02
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Adjusted Net Income Per Share (Diluted) ... $ .46 $ .45
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Average Common Shares Outstanding (Basic) . 3,431,000 3,722,000
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Average Common Shares Outstanding (Diluted) 3,455,000 3,751,000
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MESA LABORATORIES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Three Months
Ended Ended
December 31, December 31,
2001 2000
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Cash Flows From Operating Activities:
Net Income .................................... $ 1,587,219 $ 1,437,256
Depreciation and Amortization ................. 87,555 390,103
Change in Assets and Liabilities-
(Increase) Decrease in Accounts Receivable . 591,207 (681,717)
(Increase) Decrease in Inventories ......... 87,337 (413,429)
(Increase) Decrease in Prepaid Expenses .... (210,615) (15,658)
Increase (Decrease) in Accounts Payable .... (302,578) (42,734)
Increase (Decrease) in Accrued Liabilities . (38,626) 204,225
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Net Cash (Used) Provided by Operating
Activities .................................... 1,801,499 878,046
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Cash Flows From Investing Activities:
Capital Expenditures, Net of Retirements ...... (13,650) (80,053)
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Net Cash (Used) Provided by Investing Activities (13,650) (80,053)
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Cash Flows From Financing Activities:
Treasury Stock Purchases ...................... (966,495) (814,312)
Proceeds From Stock Options Exercised ......... 30 13,942
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Net Cash (Used) Provided by Financing Activities (966,465) (800,370)
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Net Increase (Decrease) In Cash and Equivalents 821,384 (2,377)
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Cash and Cash Equivalents at Beginning of Period 2,316,769 2,849,709
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Cash and Cash Equivalents at End of Period ..... $ 3,138,153 $ 2,847,332
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MESA LABORATORIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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, 2001.
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.
NOTE B. GOODWILL
In June 2001 The Financial Accounting Standards Board issued Financial
Accounting Standards No. 141, "Business Combinations" and No. 142, "Goodwill and
Other Intangible Assets." These Statements establish accounting and reporting
standards for business combinations and goodwill and other intangible assets,
respectively. The Company has adopted these statements as of April 1, 2001. As
allowed under FASB No. 141, the Company has elected to reclassify to goodwill
certain recognized intangible assets that do not meet the criteria for
recognition apart from goodwill. The company has also adopted FASB No. 142,
which no longer allows for amortization of goodwill. Goodwill will be tested for
impairment at the time of adoption and on an annual basis.
The changes in the carrying amount of goodwill as of December 31, 2001, are
as follows:
Automata Other
Instruments Acquisitions Total
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Balance March 31, 2001 $3,588,121 $619,821 $4,207,942
Goodwill acquired during the year - - -
Impairment losses - - -
Balance December 31, 2001 $3,588,121 $619,821 $4,207,942
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On December 31, 2001, the Company had cash and short term investments of
$3,138,153. In addition, the Company had other current assets totaling
$4,969,663 and total current assets of $8,107,816. Current liabilities of Mesa
Laboratories, Inc. were $519,511 which resulted in a current ratio of 15.6:1.
The Company has made net capital asset purchases of $13,650 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.
RESULTS OF OPERATIONS
REVENUE
Net sales for the nine months ended December 31, 2001 increased $334,116 or
5% to $6,951,018 from the $6,616,902 net sales level achieved for the same nine
month period last year. Net sales for the quarter increased $211,984 or 11% to
$2,222,370 from the $2,010,386 net sales level achieved in the same quarter last
year. Sales for the quarter were led by a 24% increase in medical products. The
Company's dialysis meters produced an 18% gain for the quarter compared to last
year, while the Echo Dialyzer Reprocessor shipments increased more than 50%
compared to last year. Datatrace loggers showed a small decline for the quarter
decreasing three percent from the same quarter a year ago. Sales for the first
nine months were led by a 16% increase in medical products with double digit
percentage increases on a year to year basis for both reprocessor and meter
products. Datatrace products continued to produce a small year to year decrease
in sales of four percent.
COST OF GOODS SOLD
Cost of goods sold for the first nine months as a percent of net sales was
40% which represents a 3% increase from the 37% level for the same nine month
period last year. Cost of goods sold for the current quarter as a percent of net
sales was 41%, representing a 5% increase compared to the 36% level in the same
quarter last year. The increase realized during the second quarter and first
nine months of fiscal 2002 was attributable to changing mix of products sold due
to an increase in sales of medical products in comparison to sales of the
Company's logging products.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the first nine months
decreased 11% or $209,448 to $1,671,455 from $1,880,903 in the same period last
year. For the current quarter, selling, general and administrative expenses
totaled $508,814, which was down 17% or $102,683 from $611,497 expended in the
same quarter last year. Marketing expenses accounted for an overall 7% increase
with Medical marketing expenses gaining over 16% from the prior year while
Datatrace marketing expenses increased 6%. The increase in marketing expenses
for medical products was due chiefly to increased compensation and bad debt
levels. Datatrace costs increased compared to last year due to higher
compensation and bad debt costs. Administration costs for the first nine months
decreased 29% due to decreased amortization expense due to the application of
newly adopted accounting standards.
RESEARCH AND DEVELOPMENT
Research and development for the first nine months increased to $230,859
from $203,430 which represents a 13% increase from the same period last year.
Research and development for the quarter was $74,212, which represents a
decrease of $3,471 or 4% from the $77,683 level expensed in the same quarter
last year. Research and development costs for the nine month period increased
due to higher consulting costs for two on-going software upgrade projects and
higher material costs for prototype development of the next generation of
Datatrace logging instruments.
NET INCOME
Net income for the nine months ended December 31, 2001 increased 10% to
$1,587,219 or $.46 per diluted share from $1,437,256 or $.38 per diluted share
last year. Net income for the quarter was $483,510 or $.14 per diluted share
compared to net income of $408,600 or $.11 per diluted share last year. The
increase in net income compared to last year was due chiefly to increased sales
and elimination of goodwill amortization due to the application of newly adopted
accounting standards.
PART II-OTHER INFORMATION
None.
MESA LABORATORIES, INC.
DECEMBER 31, 2001
SIGNATURES
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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.
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(Issuer)
DATED: February 14, 2002 BY: /s/Luke R. Schmieder
Luke R. Schmieder
President, Chief
Executive Officer,
Treasurer and Director
DATED: February 14, 2002 BY: /s/Steven W. Peterson
Steven W. Peterson
Vice President-Finance, Chief
Financial and Accounting
Officer and Secretary