MESA LABORATORIES INC /CO/

Mesa**** Laboratories, Inc.**

Notes to Condensed Consolidated Financial Statements

(unaudited)

(dollar and share amounts in thousands, unless otherwise specified)

Note*1***.Description of Business andSummary ofSignificantAccounting Policies**

Description of Business

In this Quarterly Report on Form10-Q, Mesa Laboratories, Inc., a Colorado corporation, together with its subsidiaries, is collectively referred to as “we,” “us,” “our,” the “Company,” or “Mesa.”

We are a global leader in the design and manufacture of critical quality control solutions and life sciences tools for regulated applications in the pharmaceutical, healthcare and medical device industries. With manufacturing operations in the United States and Europe, and commercial reach across North America, Europe, the Asia Pacific region, and throughout the world, we serve customers whose applications demand accuracy, reliability and regulatory compliance.

As of* September 30, 2026*, we managed our operations infour reportable segments, or divisions:

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. In the opinion of management, such unaudited information includes all adjustments, consisting of normal recurring adjustments, necessary for the fair statement of our financial position and results of operations. The results of operations for interim periods arenot necessarily indicative of results that* maybe achieved for the entire year. The accompanying Condensed Consolidated Balance Sheet data as of March 31, 2026* was derived from audited financial statements but doesnot include all disclosures required by U.S. GAAP. The Condensed Consolidated Financial Statements include the accounts of Mesa and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We have madeno material changes to the application of significant accounting policies disclosed in our Annual Report on Form10-K for the fiscal year ended* March 31, 2026*. This report should be read in conjunction with the consolidated financial statements included in that report.

Our fiscal year ends on* March**31.* References in this report to a particular “year” or “quarter” refer to our fiscal year or fiscal quarters, respectively. References to “fiscal year2026” refer to our fiscal year ended* March 31, 2026,and references to “fiscal year2027”* refer to our fiscal year ending* March 31, 2027.*Unless otherwise indicated, amounts shown in this report are in thousands.

Page6

Risks and Uncertainties

The preparation of financial statements requires the use of estimates and assumptions that affect reported amounts of assets and liabilities at the reporting date and revenues and expenses during the reporting periods. These estimates represent management's judgment about the outcome of future events. The global business environment continues to be impacted by cost pressures, economic uncertainties, regulatory changes and other factors. Changes in, and the resulting effects of, potential government trade, fiscal and monetary policies, interest rates, foreign currency values, supply chains, demand for goods and services, a global or regional recession, or other circumstances cannot be reliably predicted. Actual results could differ from our estimates. Refer to Part I, Item1A. Risk Factorsin our Annual Report on Form10-K for the fiscal year ended* March 31, 2026*.

Recent Accounting Pronouncements

We have reviewed all recently issued accounting pronouncements and have concluded that, other than as described below, they arenot applicable to us or arenot expected to have a material impact on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

In* July 2025,the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU")2025-05, Financial Instruments—Credit Losses (Topic326): Measurement of Credit Losses for Accounts Receivable and Contract Assets*. ASU2025-05 introduces a practical expedient that removes the requirement to incorporate macroeconomic forecasts into the estimation of expected credit losses for current accounts receivable and contract assets arising from contracts with customers. We adopted the ASU effective* April 1, 2026on a prospective basis and elected the practical expedient allowing us to assume conditions as of the balance sheet date will remain unchanged for the remaining lives of the assets. This adoption didnot* have a material impact on our consolidated financial statements, allowance for credit losses or related disclosures.

In* September 2025,the FASB issued ASU2025*-06, Intangibles—Goodwill and Other (Topic350*): Internal-Use Software*. ASU2025-06 modernizes accounting for costs incurred in the development of internal-use software by eliminating the requirement to evaluate distinct development stages. We early adopted the ASU effective* April 1, 2026,on a prospective basis. This adoption didnot* have a material impact on our consolidated financial statements or related disclosures.

Recently Issued Accounting Pronouncements

In* November 2024,the FASB issued ASU2024*-03, Expense Disaggregation Disclosures (Subtopic220*-40): Disaggregation of Income Statement Expenses.ASU2024*-03 requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The ASU is effective for fiscal years beginning after* December 15, 2026 (our fiscal year2028* for annual periods) and interim periods within fiscal years beginning after* December 15, 2027 (our fiscal year2029* for interim periods), with early adoption and prospective or retrospective application permitted. We intend to adopt ASU2024-03 prospectively, and we expect to disclose additional detail regarding the nature and classification of certain categories of expense once adopted.

Note2. Revenues

We develop, manufacture, market and sell consumables, instruments and related services for quality control and life sciences applications.

Consumables are single-use products requiring frequent replacement in our customers' operating cycles. Consumables sold by our Sterilization and Disinfection Control division, such as biological and chemical indicator test strips, are used on a standalone basis. Consumables sold by our Clinical Genomics and Biopharmaceutical Development divisions, such as reagents used for molecular and genetic analysis or solutions used for protein synthesis, are critical to the ongoing use of our instruments.

Hardware sales include physical products such as instruments used for genetic or molecular analysis, protein synthesizers, medical meters, wireless sensor systems, data loggers, and process challenge devices. Hardware* may*be offered with accompanying perpetual or annual software licenses, which in some cases are required for the hardware to function.

Revenues from consumables and hardware are recognized upon transfer of control to the customer. Control of consumables and hardware sold in the U.S. and Asia Pacific typically transfers at the point of shipment, whereas control of products sold in Europe typically transfers upon delivery to the customer site.

Page7

We also offer calibration, maintenance and testing services. Services result in revenues recognized either ratably over time, for example, when we are contractually obligated to perform labor and replace parts on an as-needed basis throughout a specified service period, or at a point in time, upon completion of a specific, discrete service.

We present disaggregated revenues consistent with how management evaluates the business, based on business unit and the nature of goods and services provided.

The following tables present disaggregated revenues for thethree andsix months ended* September 30, 2026* and2025:

Page8

Revenues from external customers are attributed to individual countries based on the locations to which the products are shipped or exported, or locations where services are performed, as follows:

No foreign country other than China exceeded10% of total revenues for thethree months ended* September 30, 2026.No foreign country exceeded10% of total revenues for thesix months ended September 30, 2026.*

Contract Liabilities

Our contracts have varying payment terms and conditions. Some customers prepay for products and services, resulting in contract liabilities recorded as unearned revenues in our unaudited Condensed Consolidated Balance Sheets. The significant majority of our revenues, related receivables and contract liabilities arise from contracts with original durations oftwelve months or less. Contract liabilities are recognized as revenues as we satisfy our obligations under the terms of the contracts.

A summary of contract liabilities is as follows:

Note3. Fair Value Measurements and Concentrations of Credit Risk

Our financial instruments consist primarily of cash and cash equivalents, trade accounts receivable, trade accounts payable and debt. Due to their short-term nature, the carrying values of cash and cash equivalents, trade accounts receivable and trade accounts payable approximate fair value.

The carrying amounts of our term loan and revolving line of credit approximate fair value due to their variable interest rates, which reflect current market rates. These instruments are classified as Level2 instruments within the fair value hierarchy.

There wereno assets or liabilities measured at fair value on a nonrecurring basis or transfers between the levels of the fair value hierarchy during thethree andsix months ended* September 30, 2026*.

The financial instruments that could subject us to the highest concentrations of credit risk are cash and accounts receivable. We maintain cash deposits at multiple banking institutions across the world to diversify cash holdings and reduce the risk of loss. Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sales.No customer accounted for more than10% of total trade receivables or revenues as of* September 30, 2026*. However, while our customer base is generally diversified at the consolidated level, certain of our businesses have higher customer concentrations. In our Clinical Genomics division, a significant portion of revenues and receivables is generated from a relatively small number of established customers. One customer accounted for approximately 18% of the division's trade receivables as of* September 30, 2026,and 15% and 19% of the division’s revenues for thethree* andsix months ended* September 30, 2026,*respectively.

Page9

Note4. Supplemental Information

Inventories consisted of the following:

Prepaid expenses and other current assets consisted of the following:

Accrued payroll and benefits consisted of the following:

Other accrued expenses consisted of the following:

Page10

Depreciation expense was as follows:

Note5. Goodwill and Intangible Assets

Intangible assets other than goodwill consisted of the following:

Amortization expense for intangible assets was as follows:

Estimated future amortization expense for the following fiscal years ending* March 31is presented below, based on foreign currency exchange rates in effect as of September 30, 2026*:

The change in the carrying amount of goodwill was as follows:

Page11

Note*6***.**** Indebtedness**

Credit Facility

On* April 5, 2024,we entered into afive*-year credit agreement with a syndicate of lenders, subsequently amended and restated (the “Amended and Restated Credit Agreement” or the “Credit Facility”). The Credit Facility matures in* April 2029*and consists of:

Borrowings under our Credit Facility bear interest at a Secured Overnight Financing Rate ("SOFR") rate or a base rate, plus an applicable spread that varies with our total net leverage ratio.

The weighted average interest rate on borrowings under the Credit Facility was 5.7% as of* September 30, 2026* and 5.9% as of* March 31, 2026.*

The financial covenants in the Credit Facility include a maximum total net leverage ratio of 3.5 to1.0 on each quarterly testing date after* March 31, 2026.The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to1.0.* Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes to our business as defined in the contract, engage in certain transactions with affiliates, or conduct asset sales.

During thethree months ended* September 30, 2026,we entered into an amendment to the Credit Facility (the “Amendment”). The Amendment increases the amount of restructuring-related charges that may*be excluded from the calculation of our net leverage ratio, as defined in the Credit Facility, and permits us to make share repurchases as restricted payments, subject to certain conditions.

Term Loan

We are required to make quarterly principal payments on the Term Loan. During thethree andsix months ended* September 30, 2026*, we made required payments of $1,406 and $2,813, respectively. For fiscal years ending* March 31,*required future principal payments on the Term Loan are as follows:

The Term Loan, net of unamortized debt issuance costs, was as follows:

Page12

We recognized interest expense on the Term Loan as follows:

Revolver

As of* September 30, 2026*, the outstanding balance under the Revolver was $67,250, and $57,750 was available for borrowing. Subsequent to* September 30, 2026*, we repaid an additional $5,000 on the Revolver.

We are obligated to pay quarterly unused commitment fees of between 0.20% and 0.275% of the Revolver’s unused principal amount, based on our leverage ratio.

The balance of unamortized customary lender fees related to the Revolver was $859 and $1,018 as of* September 30, 2026* and* March 31, 2026,*respectively.

Convertible Notes**

On* August 15, 2025,our previously outstanding 1.375% convertible notes (the "Notes") matured. We settled the aggregate principal balance of $97,500 and accrued interest using borrowings under our Revolver and cash on hand. Interest expense recognized in connection with the Notes during thethree* andsix months ended* September**30,* 2025 was $236 and $706, respectively, consisting of coupon interest expense of $168 and amortization of debt issuance costs of $68 for thethree months ended* September 30, 2025and $503 of coupon interest expense and $203 of amortization of debt issuance costs for thesix* months ended* September 30, 2025.*

Note7. Stock Transactions and Stock-Based Compensation

Stock-Based Compensation

During thesix months ended* September 30, 2026,we issued time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") pursuant to the Amended and Restated Mesa Laboratories, Inc.2021 Equity Incentive Plan (the"2021* Equity Plan"), which authorizes the issuance of 1,156 shares of common stock to eligible participants.

The following is a summary of RSU and PSU award activity for thesix months ended* September 30, 2026*:

Time-based RSUs typically vest in equal installments on each of the first, second, andthird anniversaries of the grant date. RSUs granted to non-employee directors typically vestone year from the grant date. Certain RSUs are subject to accelerated expense recognition based on retirement eligibility provisions. Time-based RSUs vest and settle in shares of our common stock on aone-for-one basis.

Page13

During thesix months ended* September 30, 2026,the Compensation Committee of the Board of Directors awarded 48 PSUs at target (the"FY27* PSUs") to eligible employees. TheFY27 PSUs are subject to service conditions and market conditions based on our total shareholder return relative to a selected peer index. The market performance and service periods are from* June**15,* 2026 through* June 14, 2029.The number of shares that maybe earned will range from 0% to 200% of the target number of shares, andno* shares will vest if threshold performance isnot achieved. Shares earned are subject to atwo-year post-vesting holding period.

As of* September 30, 2026,there were 105 shares subject to outstanding options, with a weighted average exercise price per share of $183.18, an aggregate intrinsic value of $85 and a weighted-average remaining contractual life of 1.5 years. We havenot* granted options to any plan participants in fiscal year2026 or thefirst six months of fiscal year2027.

Liability Classified PSUs

During thesix months ended* September 30, 2026,liability-classified PSUs were granted to certain key employees. The awards mayvest based on our over-achievement against a challenging threshold for revenues and adjusted operating income targets; the value of shares awarded will range from $0 to approximately $3,000, depending on Company performance. The awards represent a fixed monetary value that will be settled in a variable number of shares. As of September**30,* 2026, we have recognizedno compensation expense or corresponding liability in our Condensed Consolidated Financial Statements based on expected achievement of performance conditions. Performance is measured from* April 1, 2026to March 31, 2027.Any awards earned will vest in June 2027and be subject to aone*-year holding period.

Note*8***.**** Earnings per Share **

The following table presents a reconciliation of the denominators used in the computation of basic and diluted earnings per share ("EPS"):

(1)Weighted average outstanding shares of common stock includes awards that havenot yet vested and arenot yet legally outstanding, but for whichno vesting criteria other than the passage of time remain, such as RSUs granted to retirement-eligible employees and certain awards granted to our former CEO that arenot subject to continued service requirements but havenot yet vested.

The following contingently issuable securities were excluded from the calculation of diluted EPS as their inclusion would be anti-dilutive:

Stock awards are potentially dilutive securities and as such are excluded from the calculation of diluted EPS if their inclusion would be anti-dilutive, or if achievement of performance-based thresholds as of our reporting date wouldnot result in the awards vesting.

Page14

Note*9***.**** Income Taxes**

We reported an income tax provision as follows:

For interim income tax reporting, we estimate our annual effective tax rate and apply this effective tax rate to our year-to-date pre-tax income. Each quarter, our estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. Additionally, the tax effects of significant unusual or infrequently occurring items are recognized as discrete items in the interim period in which the events occur. There is a potential for volatility in the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which they relate, changes in tax laws and foreign tax holidays, settlement with taxing authorities, and foreign currency fluctuations.

The effective tax rate for thethree andsix months ended* September 30, 2026differed from the statutory federal rate of 21% primarily due to the impact of the valuation allowance on U.S. deferred taxes. Given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next12* months, sufficient positive evidence* maybecome available to allow us to reach a conclusion that a significant portion of the valuation allowance willno* longer be needed. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to achieve.

Note*10***.**** Commitments andContingencies**

As of* September 30, 2026*, we arenot party to any legal proceeding that management believes could have a material adverse effect on our unaudited consolidated financial position, results of operations, or cash flows.

Note11**.**** Segment Information**

Segment information is prepared on the same basis our chief operating decision maker ("CODM"), our CEO, uses to assess segment performance, allocate resources, evaluate financial results, and make key operating decisions. Ourfour reportable segments are organized primarily by the nature of the goods and services they sell. Our CODM regularly reviews segment-level U.S. GAAP revenues and gross profit relative to forecasted and prior period amounts, as well as non-GAAP adjusted operating expenses compared with budgeted amounts. Our CODM also regularly reviews non-GAAP organic revenues growth to support strategic planning and resource deployment.

Page15

The following tables set forth our segment information:

Page16

The following table sets forth inventories by reportable segment. Our CODM isnot provided with and doesnot regularly review any other segment asset information.

Note12**.**** **Subsequent Events

Restructuring

On* October 6, 2026,our Board of Directors approved a restructuring program (the “Restructuring Program”) designed to focus our Clinical Genomics division on pharmacogenomics, oncology and high-utilization customer accounts and to reduce operating costs. The Restructuring Program includes the elimination of approximatelyforty* positions, primarily in our Clinical Genomics division, with additional reductions in our corporate functions and the exit of our Hamburg, Germany facility upon the expiration of its lease in* February 2027.We began notifying terminated employees on October 12, 2026.*We expect to incur total pre-tax charges of approximately $2,600 to $3,400, net of an expected non-cash reversal of approximately $300 of previously recognized stock-based compensation expense, primarily related to employee-related costs.

We expect the Restructuring Program to be substantially complete by the end of fiscal year2027, except for certain international employee exits subject to protected notice periods, which we expect to complete in thefirst half of fiscal year2028. These amounts are preliminary estimates and* maychange, including as a result of local employee consultation processes. We will assess goodwill and long-lived assets associated with Clinical Genomics for impairment in thethird* quarter of fiscal2027 as a result of the Restructuring Program. As of* September 30, 2026,*Clinical Genomics held goodwill and long-lived intangible assets of $17,187 and $7,156 respectively, as well as approximately $9,700 of other long-lived assets.

Repurchase Program

On* November 4, 2026,the Board of Directors terminated the Company’s existing share repurchase program, which was authorized in2005,* and authorized a new program to repurchase up to $40,000 of the Company’s common stock. Repurchases* maybe made from time to time in the open market, including under Rule10b5*-1 trading plans, in privately negotiated transactions, or by other means, in compliance with applicable securities laws. The timing and amount of repurchases will depend on the market price of the stock, business and market conditions, capital requirements and other factors. The Company expects to fund repurchases with cash on hand and cash from operations. The program expires on* December 31, 2028,doesnot* obligate the Company to acquire any particular amount of common stock, and* may*be modified, suspended or terminated at any time at the Board’s discretion.

Page17