Third quarter FY 2024 compared to third quarter FY 2023:
- Revenues decreased 1.5% but increased 0.6% vs 2Q24
- Non-GAAP core organic revenues3 decreased 9%
- Operating income decreased 102%
- Non-GAAP adjusted operating income1 excluding unusual items decreased 6.8% but increased 7.3% vs 2Q24
- Non-GAAP adjusted operating income excluding unusual items as a percentage of revenues increased sequentially to 22.4%
Executive Commentary (amounts in thousands)
“Revenues of
“Profitability as measured by our primary metric of non-GAAP adjusted operating income (“AOI”) excluding unusual items came in at
“We were pleased to add GKE to our Sterilization & Disinfection Control division as their high-quality chemical indicators and healthcare channels are highly complementary to our traditional strengths in biological indicators and life science channels. Looking ahead, with ongoing economic uncertainty, we will be conservative in deploying any increases in operating expenses,” concluded
Financial Results (amounts in thousands, except per share data)
Total revenues were
As detailed in the Unusual Items table below, operating income for 3Q24 and 3Q23 was impacted by unusual items totaling
On a non-GAAP basis, core organic decline was 9% and AOI decreased 13.5% to
Division Performance
| Revenues | Organic Revenues Growth2 | Core Organic Revenues Growth3 | |||||||||||||||||||||
(Amounts in thousands) | Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||
Sterilization and Disinfection Control | $ | 19,338 | $ | 52,345 | (4.8 | )% | 1.0 | % | (6.7 | )% | (0.6 | )% | ||||||||||||
Clinical Genomics | 12,546 | 41,464 | (19.5 | )% | (14.6 | )% | (19.0 | )% | (13.1 | )% | ||||||||||||||
9,430 | 28,526 | (19.1 | )% | (18.2 | )% | (19.1 | )% | (17.4 | )% | |||||||||||||||
Calibration Solutions | 12,159 | 34,948 | 12.9 | % | 8.6 | % | 12.9 | % | 8.7 | % | ||||||||||||||
Total reportable segments | $ | 53,473 | $ | 157,283 | (8.6 | )% | (6.2 | )% | (9.0 | )% | (6.0 | )% |
Sterilization and Disinfection Control (36% of revenues in 3Q24) revenues were
Clinical Genomics (23% of revenues in 3Q24) revenues were
Calibration Solutions (23% of revenues in 3Q24) revenues were
Use of Non-GAAP Financial Measures
Adjusted operating income, organic revenues growth and core organic revenues growth are non-GAAP measures that exclude or adjust for certain items, as detailed after the tables that accompany this press release under the heading “Supplemental Information Regarding Non-GAAP Financial Measures.” Reconciliations of GAAP to non-GAAP financial measures are provided in the tables that accompany this press release.
1 The non-GAAP measures of adjusted operating income and adjusted operating income per diluted share are defined to exclude the non-cash impact of amortization of intangible assets acquired in a business combination, stock-based compensation and impairment of goodwill and long-lived assets. A reconciliation between these non-GAAP measures and their GAAP counterparts is set forth below, along with additional information regarding their use.
2 Organic revenues growth, a non-GAAP measure, is reported revenues growth excluding the impact of acquisitions.
3 Core organic revenues growth, a non-GAAP measure, is reported revenues growth excluding the impact of acquisitions, currency translation and COVID related revenues.
About
Mesa is a global leader in the design and manufacture of life science tools and critical quality control solutions for regulated applications in the pharmaceutical, healthcare and medical device industries. Mesa offers products and services to help our customers ensure product integrity, increase patient and worker safety, and improve the quality of life throughout the world.
For more information about Mesa, please visit its website at www.mesalabs.com
Forward Looking Statements
This press release contains forward-looking statements regarding our future business expectations. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our historical experience and present expectations or projections. Any statements contained herein that are not statements of historical fact may be forward-looking statements, including statements relating to: our ability to successfully grow our business, including as a result of acquisitions; the results on operations of acquisitions; our ability to consummate acquisitions at our historical rate and at appropriate prices; our ability to effectively integrate acquired businesses and achieve desired results; the market acceptance of our products; reduced demand for our products that adversely impacts our future revenues, cash flows, results of operations and financial condition; conditions in the global economy and the particular markets we serve; significant developments or uncertainties stemming from the
Mesa Laboratories Contacts:
1-303-987-8000
investors@mesalabs.com
Financial Summary (Unaudited except for the information as of
Condensed Consolidated Statements of Income | ||||||||||||
(Amounts in thousands, except per share data) | Three Months Ended | Nine Months Ended | ||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Revenues | $ | 53,473 | $ | 54,287 | $ | 157,283 | $ | 163,489 | ||||
Cost of revenues | 20,071 | 21,522 | 60,589 | 62,997 | ||||||||
Gross profit | 33,402 | 32,765 | 96,694 | 100,492 | ||||||||
Operating expenses | 33,469 | 29,363 | 97,485 | 97,689 | ||||||||
Operating (loss) income | (67 | ) | 3,402 | (791 | ) | 2,803 | ||||||
Nonoperating (income) expense | (2,013 | ) | 1,486 | (475 | ) | 2,915 | ||||||
Earnings (loss) before income taxes | 1,946 | 1,916 | (316 | ) | (112 | ) | ||||||
Income tax (benefit) expense | (170 | ) | 1,465 | (653 | ) | (431 | ) | |||||
Net income | $ | 2,116 | $ | 451 | $ | 337 | $ | 319 | ||||
Earnings per share (basic) | $ | 0.39 | $ | 0.08 | $ | 0.06 | $ | 0.06 | ||||
Earnings per share (diluted) | 0.39 | 0.08 | 0.06 | 0.06 | ||||||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 5,393 | 5,339 | 5,384 | 5,312 | ||||||||
Diluted | 5,396 | 5,360 | 5,394 | 5,354 |
Consolidated Condensed Balance Sheets | ||||||
(Amounts in thousands) | ||||||
Cash and cash equivalents | $ | 28,224 | $ | 32,910 | ||
Other current assets | 90,131 | 86,065 | ||||
Total current assets | 118,355 | 118,975 | ||||
Property, plant and equipment, net | 31,775 | 28,149 | ||||
Other assets | 591,639 | 514,708 | ||||
Total assets | $ | 741,769 | $ | 661,832 | ||
Liabilities | $ | 338,808 | $ | 268,352 | ||
Stockholders’ equity | 402,961 | 393,480 | ||||
Total liabilities and stockholders’ equity | $ | 741,769 | $ | 661,832 |
Reconciliation of Non-GAAP Measures | ||||||||||||
(Unaudited) | ||||||||||||
(Amounts in thousands, except per share data) | Three Months Ended | Nine Months Ended | ||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Operating (loss) income (GAAP) | $ | (67 | ) | $ | 3,402 | $ | (791 | ) | $ | 2,803 | ||
Amortization of intangible assets | 7,975 | 7,147 | 22,380 | 21,573 | ||||||||
Stock-based compensation expense | 2,993 | 2,056 | 9,144 | 9,859 | ||||||||
Adjusted operating income (non-GAAP) | $ | 10,901 | $ | 12,605 | $ | 30,733 | $ | 34,235 | ||||
Adjusted operating income per share (basic) | $ | 2.02 | $ | 2.36 | $ | 5.71 | $ | 6.44 | ||||
Adjusted operating income per share (diluted) | $ | 2.02 | $ | 2.35 | $ | 5.70 | $ | 6.39 | ||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 5,393 | 5,339 | 5,384 | 5,312 | ||||||||
Diluted | 5,396 | 5,360 | 5,394 | 5,354 |
Organic and Core Organic Revenues Growth (Unaudited) | ||||||
Three Months Ended | Nine Months Ended | |||||
Total revenues growth | (1.5 | )% | (3.8 | )% | ||
Impact of acquisitions | (7.1 | )% | (2.4 | )% | ||
Organic revenues growth | (8.6 | )% | (6.2 | )% | ||
Currency translation | (0.6 | )% | (0.1 | )% | ||
COVID related revenues | 0.2 | % | 0.3 | % | ||
Core organic revenues growth | (9.0 | )% | (6.0 | )% |
Detail of Unusual Items (Unaudited)
As discussed above, operating income and adjusted operating income were impacted by various unusual items during the three and nine months ended
Impact of unusual items on operating income | Three Months Ended | Nine Months Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Operating (loss) income (GAAP) | $ | (67 | ) | $ | 3,402 | $ | (791 | ) | $ | 2,803 | |||
Unusual items – before tax | |||||||||||||
Non-cash cost of revenues expense associated with the step up to fair value of GKE inventory due to application of purchase accounting | $ | 412 | $ | -- | $ | 412 | $ | -- | |||||
GKE acquisition/integration costs | 770 | -- | 1,275 | -- | |||||||||
Restructuring costs | (102 | ) | -- | 248 | -- | ||||||||
Agena/Belyntic acquisition/integration costs | -- | 251 | -- | 874 | |||||||||
Total Impact of unusual items on operating income – before tax | 1,080 | 251 | 1,935 | 874 | |||||||||
Operating income excluding unusual items | $ | 1,013 | $ | 3,653 | $ | 1,144 | $ | 3,677 | |||||
Impact of unusual items on adjusted operating income | Three Months Ended | Nine Months Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Adjusted operating income (non-GAAP) | $ | 10,901 | $ | 12,605 | $ | 30,733 | $ | 34,235 | |||||
Unusual items – before tax | |||||||||||||
Non-cash cost of revenues expense associated with the step up to fair value of GKE inventory due to application of purchase accounting | $ | 412 | $ | -- | $ | 412 | $ | -- | |||||
GKE acquisition/integration costs | 770 | -- | 1,275 | -- | |||||||||
Restructuring costs | (102 | ) | -- | 248 | -- | ||||||||
Agena/Belyntic acquisition/integration costs | -- | 251 | -- | 874 | |||||||||
Total impact of unusual items on adjusted operating income – before tax | 1,080 | 251 | 1,935 | 874 | |||||||||
Adjusted operating income excluding unusual items | $ | 11,981 | $ | 12,856 | $ | 32,668 | $ | 35,109 |
Supplemental Information Regarding Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we provide non-GAAP adjusted operating income, non-GAAP adjusted operating income per share amounts, non-GAAP adjusted operating income excluding unusual items, organic revenues growth, and core organic revenues growth in order to provide meaningful supplemental information regarding our operational performance. We believe that the use of these non-GAAP financial measures, in addition to GAAP financial measures, helps investors to gain a better understanding of our operating results, consistent with how management measures and forecasts its operating performance, especially when comparing such results to previous periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes. This information facilitates management's internal comparisons to our historical operating results as well as to the operating results of our competitors. Since management finds this measure to be useful, we believe that our investors can benefit by evaluating both GAAP and non-GAAP results.
The non-GAAP measures of adjusted operating income and adjusted operating income per share presented in the reconciliation above are defined to exclude the non-cash impact of amortization of intangible assets acquired in a business combination, stock-based compensation and impairment of goodwill and long-lived assets. To calculate adjusted operating income, we exclude, as applicable:
- Impairments of long-lived assets as such charges are outside of our normal operations and in most cases are difficult to accurately forecast.
- Stock-based compensation expense as it is a non-cash charge and costs calculated for this expense vary in accordance with the stock price on the date of grant.
- The expense associated with the amortization of acquisition-related intangible assets as a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of up to 20 years. Exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.
Our management recognizes that items such as amortization of intangible assets, stock-based compensation expense and impairment losses on goodwill and long-lived assets can have a material impact on our operating and net income. To gain a complete picture of all effects on our profit and loss from any and all events, management does (and investors should) rely upon the GAAP consolidated statements of income. The non-GAAP numbers focus instead upon our core operating business.
Readers are reminded that non-GAAP measures are merely a supplement to, and not a replacement for, or superior to financial measures prepared according to GAAP. They should be evaluated in conjunction with the GAAP financial measures. Our non-GAAP information may be different from the non-GAAP information provided by other companies.
Source:
2024 GlobeNewswire, Inc., source