form-10qsb_093001
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, 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
(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 3,376,260 shares of the Issuer's common stock, no par value,
outstanding as of September 30, 2001.
ITEM 1. FINANCIAL STATEMENTS FORM 10-QSB
MESA LABORATORIES, INC.
BALANCE SHEETS
(UNAUDITED)
ASSETS SEPTEMBER 30, 2001 MARCH 31, 2001
------ ------------------ ----------------
CURRENT ASSETS
Cash and Cash Equivalents $ 2,294,614 $ 2,316,769
Accounts Receivable, Net 2,785,877 3,286,337
Inventories 2,464,425 2,402,847
Prepaid Expenses 126,665 133,408
----------- -----------
TOTAL CURRENT ASSETS 7,671,581 8,139,361
PROPERTY, PLANT & EQUIPMENT, NET 1,419,490 1,471,662
OTHER ASSETS
Long-term Receivable 462,000 -
Intangible Assets, Net 4,207,942 4,207,942
----------- -----------
TOTAL ASSETS $13,761,013 $13,818,965
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts Payable $ 53,289 $ 353,519
Accrued Salaries & Payroll Taxes 285,995 267,964
Other Accrued Expenses 90,380 108,771
Taxes Payable 68,773 130,461
----------- -----------
TOTAL CURRENT LIABILITIES 498,437 860,715
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,
3,376,260 shares (9/30/01)
and 3,542,160 shares (3/31/01) 1,872,977 2,165,549
Retained Earnings 11,364,307 10,767,409
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 13,237,284 12,932,958
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $13,761,013 $13,818,965
=========== ===========
MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Three Months
Ended Ended
Sept. 30, 2001 Sept. 30, 2000
-------------- --------------
Sales $2,668,994 $2,345,519
---------- ----------
Cost of Goods Sold 1,042,302 887,072
Selling, General & Administrative 599,239 603,292
Research and Development 57,834 65,076
Other (Income) and Expenses (21,498) (39,524)
---------- ----------
1,677,877 1,515,916
---------- -----------
Earnings Before Income Taxes 991,117 829,603
Income Taxes 341,000 303,000
---------- ----------
Net Income $ 650,117 $ 526,603
========== ==========
Reported Net Income $ 650,117 $ 526,603
Add Back: Goodwill Amortization - 65,667
Add Back: Trademark Amortization - 24,225
---------- ----------
Adjusted Net Income $ 650,117 $ 616,495
========== ==========
Basic Earnings Per Share:
Reported Net Income $ .19 $ .14
Goodwill Amortization - .02
Trademark Amortization - .01
---------- ----------
Adjusted Net Income Per Share (Basic) $ .19 $ .17
========== ==========
Diluted Earnings Per Share:
Reported Net Income $ .19 $ .14
Goodwill Amortization - .02
Trademark Amortization - .00
---------- ----------
Adjusted Net Income Per Share (Diluted) $ .19 $ .16
========== ==========
Average Common Shares Outstanding (Basic) 3,433,000 3,724,000
========== ==========
Average Common Shares Outstanding (Diluted) 3,446,000 3,762,000
========== ==========
MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Six Months
Ended Ended
Sept. 30, 2001 Sept. 30, 2000
-------------- --------------
Sales $4,728,648 $4,606,516
---------- ----------
Cost of Goods Sold 1,836,165 1,706,463
Selling, General & Administrative 1,162,641 1,268,843
Research and Development 156,648 125,747
Other (Income) and Expenses (45,336) (71,443)
---------- ----------
3,110,118 3,029,610
---------- ----------
Earnings Before Income Taxes 1,618,530 1,576,906
Income Taxes 514,822 547,693
---------- ----------
Net Income $1,103,708 $1,029,213
========== ==========
Reported Net Income $1,103,708 $1,029,213
Add Back: Goodwill Amortization - 131,334
Add Back: Trademark Amortization - 48,450
---------- ----------
Adjusted Net Income $1,103,708 $1,208,997
========== ==========
Basic Earnings Per Share:
Reported Net Income $ .32 $ .27
Goodwill Amortization - .04
Trademark Amortization - .01
---------- ----------
Adjusted Net Income Per Share (Basic) $ .32 $ .32
========== ==========
Diluted Earnings Per Share:
Reported Net Income $ .32 $ .27
Goodwill Amortization - .04
Trademark Amortization - .01
---------- ----------
Adjusted Net Income Per Share (Diluted) $ .32 $ .32
========== ==========
Average Common Shares Outstanding (Basic) 3,469,000 3,747,000
========== ==========
Average Common Shares Outstanding (Diluted) 3,490,000 3,774,000
========== ==========
MESA LABORATORIES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Six Months
Ended Ended
Sept. 30, 2001 Sept. 30, 2000
-------------- --------------
Cash Flows From Operating Activities:
Net Income $1,103,708 $1,029,213
Depreciation and Amortization 58,371 260,068
Change in Assets and Liabilities-
(Increase) Decrease in Accounts Receivable 38,460 (381,897)
(Increase) Decrease in Inventories (61,578) (166,935)
(Increase) Decrease in Prepaid Expenses 6,743 10,927
Increase (Decrease) in Accounts Payable (300,230) (72,831)
Increase (Decrease) in Accrued Liabilities (62,048) (137,942)
---------- ----------
Net Cash (Used) Provided by Operating
Activities 783,426 540,603
---------- ----------
Cash Flows From Investing Activities:
Capital Expenditures, Net of Retirements (6,199) (26,812)
---------- ----------
Net Cash (Used) Provided by Investing Activities (6,199) (26,812)
---------- ----------
Cash Flows From Financing Activities:
-
Treasury Stock Purchases (799,385) (604,081)
Proceeds From Stock Options Exercised 3 13,943
---------- ----------
Net Cash (Used) Provided by Financing Activities (799,382) (590,138)
---------- ----------
Net Increase (Decrease) In Cash and Equivalents (22,155) (76,347)
---------- ----------
Cash and Cash Equivalents at Beginning of Period 2,316,769 2,849,709
---------- ----------
Cash and Cash Equivalents at End of Period $2,294,614 $2,773,362
========== ==========
MESA LABORATORIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 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 September 30, 2001, are as
follows:
Automata Other
Instruments Acquisitions Total
----------- ------------ ----------
Balance March 31, 2001 $3,588,121 $619,821 $4,207,942
Goodwill acquired during the year - - -
Impairment losses - - -
Balance September 30, 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 September 30, 2001, the Company had cash and short term investments of
$2,294,614. In addition, the Company had other current assets totaling $5,376,967
and total current assets of $7,671,581. Current liabilities of Mesa Laboratories,
Inc. were $498,437 which resulted in a current ratio of 15.4:1.
The Company has made net capital asset purchases of $6,199 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 six months ended September 30, 2001 increased $122,132 or 3%
to $4,728,648 from the $4,606,516 net sales level achieved for the same six month
period last year. Net sales for the quarter increased $323,475 or 14% to $2,668,994
from the $2,345,519 net sales level achieved in the same quarter last year. Net
sales for both the quarter and six month period were favorably impacted by higher
shipments of the Echo Dialyzer Reprocessing System, which raised medical product
sales for the first six months by over 20 percent. A portion of the Echo Dialyzer
Reprocessing systems shipped during the last quarter were sold under terms which
allow periodic payments over the next fifty-four months. Under current accounting
rules, all revenue for these shipments was recognized at the time of shipment and a
long-term receivable was recognized. Datatrace logging products produced a small
decrease for the periods with the products producing two and four percent decreases
from last year's quarter and six month periods, respectively.
COST OF GOODS SOLD
Cost of goods sold for the first six months as a percent of net sales was 39%
which represents a 2% increase from the 37% level for the same six month period last
year. Cost of goods sold for the current quarter as a percent of net sales was 39%,
representing a 1% increase compared to the 38% level in the same quarter last year.
The increase realized during the second quarter and first six 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 six months decreased
8% or $106,202 to $1,162,641 from $1,268,843 in the same period last year. For the
current quarter, selling, general and administrative expenses totaled $599,239, which
was down 1% or $4,053 from $603,292 expended in the same quarter last year.
Marketing expenses accounted for an overall 12% increase with Medical marketing
expenses gaining over 34% from the prior year while Datatrace marketing expenses
increased 9%. 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 bad debt costs. Administration costs for the first six months
decreased 27% due to decreased amortization expense due to application of newly
adopted accounting standards.
RESEARCH AND DEVELOPMENT
Research and development for the first six months increased to $156,648 from
$125,747 which represents a 25% increase from the same period last year. Research and
development for the quarter was $57,834, which represents a decrease of $7,242 or 11%
from the $65,076 level expensed in the same quarter last year. Research and
development costs for the six 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 six months ended September 30, 2001 increased 7% to
$1,103,708 or $.32 per share from $1,029,213 or $.27 per share last year. Net income
for the quarter was $650,117 or $.19 per share compared to net income of $526,603 or
$.14 per 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.
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 13, 2001 BY:
-------------------------------------
Luke R. Schmieder
President, Chief Executive Officer,
Treasurer and Director
DATED: November 13, 2001 BY:
--------------------------------------
Steven W. Peterson
Vice President-Finance, Chief
Financial and Accounting Officer and
Secretary