form10q0601
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 June 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
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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
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(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 ___.
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State the number of shares outstanding of each of the
Issuer's classes of common stock, as of the latest practicable date:
There were 3,472,560 shares of the Issuer's common stock,
no par value, outstanding as of June 30, 2001.
ITEM 1. FINANCIAL STATEMENTS FORM 10-QSB
MESA LABORATORIES, INC.
BALANCE SHEETS
(UNAUDITED)
ASSETS JUNE 30, 2001 MARCH 31, 2001
------ ------------- ------------
CURRENT ASSETS
Cash and Cash Equivalents ...... $ 2,207,892 $ 2,316,769
Accounts Receivable, Net ....... 2,866,303 3,286,337
Inventories .................... 2,556,899 2,402,847
Prepaid Expenses and
Other Assets................... 211,680 133,408
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TOTAL CURRENT ASSETS ........ 7,842,774 8,139,361
PROPERTY, PLANT AND EQUIPMENT, NET . 1,446,383 1,471,662
OTHER ASSETS
Intangible Assets, Net ......... 4,207,942 4,207,942
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TOTAL ASSETS ............... $13,497,099 $13,818,965
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable ............... $ 55,523 $ 353,519
Accrued Salaries and Payroll Taxes 260,353 267,964
Other Accrued Expenses ......... 106,003 108,771
Taxes Payable .................. 16,377 130,461
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TOTAL CURRENT LIABILITIES ........ 438,256 860,715
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,
3,472,560 shares (6/30/01)
and 3,542,160 shares (3/31/01) 2,036,353 2,165,549
Retained Earnings .............. 10,997,198 10,767,409
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TOTAL STOCKHOLDERS' EQUITY ....... 13,033,551 12,932,958
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ............. $13,497,099 $13,818,965
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ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
---------------------------------
FORM 10-QSB
MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Three Months Ended
June 30, 2001 June 30, 2000
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Sales ..................................... $ 2,059,654 $ 2,260,997
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Cost of Goods Sold ........................ 793,863 819,391
Selling, General and Administrative ......... 563,402 665,551
Research and Development .................. 98,814 60,671
Other (Income) and Expenses ............... (23,838) (31,919)
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1,432,241 1,513,694
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Earnings Before Income Taxes .............. 627,413 747,303
Income Taxes .............................. 173,822 244,693
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Net Income ................................ $ 453,591 $ 502,610
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Reported Net Income ....................... $ 453,591 $ 502,610
Add Back: Goodwill Amortization ........... -- 65,667
Add Back: Trademark Amortization .......... -- 24,225
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Adjusted Net Income ....................... $ 453,591 $ 592,502
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Basic Earnings Per Share:
Reported Net Income ....................... $ .13 $ .13
Goodwill Amortization ..................... -- .02
Trademark Amortization .................... -- .01
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Adjusted Net Income Per Share (Basic) ..... $ .13 $ .16
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Diluted Earnings Per Share:
Reported Net Income ....................... $ .13 $ .13
Goodwill Amortization ..................... -- .02
Trademark Amortization .................... -- .01
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Adjusted Net Income Per Share (Diluted) ... $ .13 $ .16
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Average Common Shares Outstanding (Basic) . 3,507,000 3,771,000
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Average Common Shares Outstanding (Diluted) 3,525,000 3,791,000
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ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
--------------------------------
FORM 10-QSB
MESA LABORATORIES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
June 30, 2001 June 30, 2000
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Cash Flows From Operating Activities:
Net Income .................................... $ 453,591 $ 502,610
Depreciation and Amortization ................. 29,185 130,034
Change in Assets and Liabilities-
(Increase) Decrease in Accounts Receivable . 420,034 (111,827)
(Increase) Decrease in Inventories ......... (154,052) (228,974)
(Increase) Decrease in Prepaid Expenses .... (78,272) 19,320
Increase (Decrease) in Accounts Payable .... (297,996) 79,429
Increase (Decrease) in Accrued Liabilities . (124,463) (118,823)
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Net Cash (Used) Provided by Operating
Activities .................................... 248,027 271,769
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Cash Flows From Investing Activities:
Capital Expenditures, Net of Retirements ...... (3,906) (24,888)
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Net Cash (Used) Provided by Investing Activities (3,906) (24,888)
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Cash Flows From Financing Activities:
Treasury Stock Purchases ...................... (353,001) (302,965)
Proceeds From Stock Options Exercised ......... 3 13,438
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Net Cash (Used) Provided by Financing Activities (352,998) (289,527)
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Net Increase (Decrease) In Cash and Equivalents (108,877) (42,646)
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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 ..... $ 2,207,892 $ 2,807,063
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ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
FORM 10-QSB
MESA LABORATORIES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 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. In accordance with
FASB No. 142, the Company will complete its goodwill impairment
test within the first six months of the fiscal year.
The changes in the carrying amount of goodwill as of June 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 June 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 June 30, 2001, the Company had cash and short term
investments of $2,207,892. In addition, the Company had other
current assets totaling $5,634,882 and total current assets of
$7,842,774. Current liabilities of Mesa Laboratories, Inc. were
$438,256 which resulted in a current ratio of 17.9:1.
The Company has made net capital asset purchases of $3,906
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.
FORM 10-QSB
RESULTS OF OPERATIONS
REVENUE
Net sales for the three months ended June 30, 2001 decreased
$201,343 or 9% to $2,059,654 from the $2,260,997 net sales level
achieved for the same three month period last year. Three quarters
of the decrease was attributable to a decline in medical product
sales. The remainder of the decrease was attributable to a decline
in Datatrace sales during the quarter. Nusonics products for the
quarter registered a small increase. The decrease in Datatrace
sales was less than seven percent compared to the same quarter last
year. Most of the sales decline for medical product was
attributable to decreased dialyzer reprocessor sales. In the first
quarter last year, one customer accounted for approximately
$200,000 of dialyzer reprocessor sales. In the first quarter of
this fiscal year, the same customer placed an order that exceeds
$700,000 of dialyzer reprocessors, but due to the size of the
order, shipment will not occur until the second quarter reversing
the initial shortfall in dialyzer reprocessor shipments in the
first quarter.
COST OF GOODS SOLD
Cost of goods sold for the first three months as a percent of
net sales was 39% which represents a 3% increase from the 36% level
for the same three month period last year. Most of the increase
realized in the quarter was attributable to changing mix of
products due to the addition of the new Automata product line and
decreased sales of Datatrace products.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the first
three months decreased 15% or $102,149 to $563,402 from $665,551 in
the same period last year. Marketing expenses accounted for an
overall 5% decrease with Medical marketing expenses gaining over
38% from the prior year while Nusonics and Datatrace marketing
expenses both decreased. The increase in marketing expenses for
medical products was due chiefly to increased compensation and
staffing level compared to last year. Datatrace costs decreased
compared to last year due to lower outside commission costs.
Nusonics marketing costs declined for the quarter due chiefly to
lower compensation costs. Administration costs for the quarter
decreased 34% due to decreased amortization and compensation
expense.
RESEARCH AND DEVELOPMENT
Research and development for the first three months increased
to $98,814 from $60,671 which represents a 63% increase from the
same period last year. Research and development costs increased due
to higher compensation costs as personnel resources were shifted
from Nusonics marketing to research, 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 three months ended June 30, 2001 decreased
10% to $453,591 or $.13 per share from $502,610 or $.13 per share
last year. The decrease in net income compared to last year was due
chiefly to a decline in sales, but was partially off-set by a
decrease in goodwill amortization due to the application of newly
adopted accounting standards. On an earnings per share basis,
earnings remained unchanged due to the Company's on-going program
of repurchasing common shares.
PART II-OTHER INFORMATION
None.
FORM 10-QSB
MESA LABORATORIES, INC.
JUNE 30, 2001
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: August 9, 2001 BY: /s/ Luke R. Schmieder
Luke R. Schmieder
President, Chief
Executive Officer,
Treasurer and Director
DATED: August 9, 2001 BY: /s/ Steven W. Peterson
Steven W. Peterson
Vice
President-Finance, Chief
Financial and
Accounting Officer and
Secretary