form-10qsb_093002
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, 2002
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OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File Number 0-11740
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MESA LABORATORIES, INC.
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(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 3,290,236 shares of the Issuer's common stock, no par value,
outstanding as of September 30, 2002.
ITEM 1. FINANCIAL STATEMENTS FORM 10-QSB
MESA LABORATORIES, INC.
BALANCE SHEETS
(UNAUDITED)
SEPTEMBER 30, MARCH 31,
2002 2002
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ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 4,683,913 $ 3,461,978
Accounts Receivable, Net 2,311,225 2,296,024
Inventories 2,486,566 2,443,091
Prepaid Expenses 119,673 398,290
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TOTAL CURRENT ASSETS 9,601,377 8,599,383
PROPERTY, PLANT & EQUIPMENT, NET 1,394,784 1,398,398
OTHER ASSETS
Goodwill and Other 4,284,942 4,438,942
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TOTAL ASSETS $15,281,103 $14,436,723
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 73,849 $ 88,894
Accrued Salaries & Payroll Taxes 268,418 310,272
Other Accrued Expenses 73,966 66,878
Taxes Payable 168,532 34,661
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TOTAL CURRENT LIABILITIES 584,765 500,705
LONG TERM LIABILITIES
Deferred Income Taxes Payable 41,744 41,744
STOCKHOLDERS' EQUITY
Preferred Stock, No Par Value - -
Common Stock, No Par Value;
authorized 8,000,000 shares;
issued and outstanding,
3,290,236 shares (9/30/02)
and 3,342,376 shares (3/31/02) 1,693,599 1,791,758
Retained Earnings 12,960,995 12,102,516
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TOTAL STOCKHOLDERS' EQUITY 14,654,594 13,894,274
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $15,281,103 $14,436,723
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MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Three Months
Ended Ended
Sept. 30, 2002 Sept. 30, 2001
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Sales $2,431,869 $2,668,994
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Cost of Goods Sold 878,325 1,042,302
Selling, General & Administrative 493,455 599,239
Research and Development 79,480 57,834
Other (Income) and Expenses (15,979) (21,498)
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1,435,281 1,677,877
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Earnings Before Income Taxes 996,588 991,117
Income Taxes 335,500 341,000
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Net Income $ 661,088 $ 650,117
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Net Income Per Share (Basic) $ .20 $ .19
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Net Income Per Share (Diluted) $ .20 $ .19
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Average Common Shares Outstanding (Basic) 3,304,000 3,433,000
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Average Common Shares Outstanding (Diluted) 3,366,000 3,446,000
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MESA LABORATORIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Six Months
Ended Ended
Sept. 30, 2002 Sept. 30, 2001
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Sales $4,484,324 $4,728,648
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Cost of Goods Sold 1,690,108 1,836,165
Selling, General & Administrative 1,075,071 1,162,641
Research and Development 128,930 156,648
Other (Income) and Expenses (30,592) (45,336)
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2,863,517 3,110,118
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Earnings Before Income Taxes 1,620,807 1,618,530
Income Taxes 540,000 514,822
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Net Income $1,080,807 $1,103,708
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Net Income Per Share (Basic) $ .33 $ .32
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Net Income Per Share (Diluted) $ .32 $ .32
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Average Common Shares Outstanding (Basic) 3,318,000 3,469,000
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Average Common Shares Outstanding (Diluted) 3,389,000 3,490,000
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MESA LABORATORIES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Six Months
Ended Ended
Sept. 30, 2002 Sept. 30, 2001
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Cash Flows From Operating Activities:
Net Income $1,080,807 $1,103,708
Depreciation and Amortization 59,194 58,371
Change in Assets and Liabilities-
(Increase) Decrease in Accounts Receivable 138,799 38,460
(Increase) Decrease in Inventories (43,475) (61,578)
(Increase) Decrease in Prepaid Expenses 278,617 6,743
Increase (Decrease) in Accounts Payable (15,045) (300,230)
Increase (Decrease) in Accrued Liabilities 99,105 (62,048)
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Net Cash (Used) Provided by Operating
Activities 1,598,002 783,426
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Cash Flows From Investing Activities:
Capital Expenditures, Net of Retirements (55,580) (6,199)
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Net Cash (Used) Provided by Investing Activities (55,580) (6,199)
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Cash Flows From Financing Activities:
-
Treasury Stock Purchases (350,675) (799,385)
Proceeds From Stock Options Exercised 30,188 3
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Net Cash (Used) Provided by Financing Activities (320,487) (799,382)
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Net Increase (Decrease) In Cash and Equivalents 1,221,935 (22,155)
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Cash and Cash Equivalents at Beginning of Period 3,461,978 2,316,769
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Cash and Cash Equivalents at End of Period $4,683,913 $2,294,614
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MESA LABORATORIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001
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, 2002.
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 September 30, 2002, the Company had cash and short term investments of
$4,683,913. In addition, the Company had other current assets totaling
$4,917,464 and total current assets of $9,601,377. Current liabilities of Mesa
Laboratories, Inc. were $584,765 which resulted in a current ratio of 16.4:1.
The Company has made net capital asset purchases of $55,580 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, 2002 decreased $244,324 or
5% to $4,484,324 from the $4,728,648 net sales level achieved for the same six
month period last year. Net sales for the quarter decreased $237,125 or 9% to
$2,431,869 from the $2,668,994 net sales level achieved in the same quarter last
year. Net sales for both the quarter and six month period were unfavorably
impacted by lower shipments of the Echo Dialyzer Reprocessing System. This
unfavorable comparison for Echo Dialyzer Reprocessing systems and sales in total
was due to shipment in the comparable quarter last year of an order to a single
customer, which exceeded $800,000. Due to introduction in the current fiscal
year of the Datatrace Micropack III, logging products produced increases for the
quarter and six month periods of 40% and 17%, respectively. Medical meter
products also gained for the quarter and year-to-date periods from prior year
rising 9% and 5%, respectively.
COST OF GOODS SOLD
Cost of goods sold for the first six months as a percent of net sales was
38% which represents a 1% decrease from the 39% level for the same six month
period last year. Cost of goods sold for the current quarter as a percent of net
sales was 36%, representing a 3% decrease compared to the 39% level in the same
quarter last year. The decrease 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 Datatrace logging products in comparison to sales of the
Company's medical products.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the first six months
decreased 8% or $87,570 to $1,075,071 from $1,162,641 in the same period last
year. For the current quarter, selling, general and administrative expenses
totaled $493,455, which was down 18% or $105,784 from $599,239 expended in the
same quarter last year. Marketing expenses decreased 24% and 11% for the quarter
and six month periods, respectively with Medical marketing expenses declining
38% and 28% from the prior year while Datatrace marketing expenses decreased 4%
for the quarter and increased 12% for the six month period. The decrease in
marketing expenses for medical products was due chiefly to lower compensation
and bad debt levels. Datatrace costs increased for the six month period due to
promotional costs in support of the new Micropack III product. Administration
costs decreased only marginally for the quarter and six month periods
RESEARCH AND DEVELOPMENT
Research and development for the first six months decreased to $128,930
from $156,648 which represents an 18% decrease from the same period last year.
Research and development for the quarter was $79,480, which represents an
increase of $21,646 or 37% from the $57,834 level expensed in the same quarter
last year. Research and development costs for the six month period decreased due
to lower compensation, consulting and materials costs. The increase for the
quarter was due chiefly to higher material and supplies costs incurred during
the period.
NET INCOME
Net income for the six months ended September 30, 2002 decreased 2% to
$1,080,807 or $.32 per diluted share from $1,103,708 or $.32 per diluted share
last year. Net income for the quarter was $661,088 or a record $.20 per diluted
share compared to net income of $650,117 or $.19 per diluted share last year.
For the quarter, the increase in net income compared to last year was due
chiefly to increased sales of logging products. For the year-to-date, income was
down slightly due to lower total sales, but increased as a percent of sales due
to higher sales of logging products.
PART II-OTHER INFORMATION
ITEM 3. Controls and procedures
The Company, under the supervision of the chief executive and financial officer,
has conducted an evaluation of the effectiveness of the design and operation of
the Company's disclosure controls and procedures within 90 days of the filing
date of this quarterly report. Based upon the results of this evaluation, the
Company believes that they maintain proper procedures for gathering, analyzing
and disclosing all information in a timely fashion that is required to be
disclosed in its Exchange Act reports. There have been no significant changes in
the Company's controls subsequent to the evaluation date.
ITEM 6. Exhibits and reports on Form 8-K
a) Exhibits:
99.1 Certification of Chief Executive Officer and Chief Financial Officer
b) Reports on Form 8-K:
None
MESA LABORATORIES, INC.
SEPTEMBER 30, 2002
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 6, 2002 BY: /s/Luke R. Schmieder
Luke R. Schmieder
President, Chief Executive Officer,
Treasurer and Director
DATED: November 6, 2002 BY: /s/Steven W. Peterson
Steven W. Peterson
Vice President-Finance, Chief
Financial and Accounting Officer and
Secretary
CERTIFICATIONS
I, Luke R. Schmieder, the Chief Executive Officer of Mesa Laboratories, Inc.
(the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Mesa Laboratories,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 6, 2002
By: /s/Luke R. Schmieder
Name: Luke R. Schmieder
Title: Chief Executive Officer
I, Steven W. Peterson, the Chief Financial Officer of Mesa Laboratories, Inc.
(the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Mesa Laboratories,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 6, 2002
By: /s/Steven W. Peterson
Name: Steven W. Peterson
Title: Chief Financial Officer