Mesa Laboratories, Inc.

Total revenues were $60.1 million, up 1% year over year. Gross profit was $39 million, or 64.9% of revenue, versus 62.0% last year. GAAP operating income was $7 million, up 129%, and GAAP net income was $2.8 million, or $0.49 per diluted share, down 40.3% due to a non-operating swing. Adjusted operating income was $15 million, or $2.61 per diluted share; excluding a $382,000 legal settlement, AOI was $15.4 million and margin was 25.6% versus 21.7% last year. For the quarter, SDC revenue was $24.5 million and down 3.6% organically; BPD revenue was $12.1 million and up 5%; Calibration Solutions revenue was $13.3 million and up 7.6%; Clinical Genomics revenue was $10.3 million and essentially flat. Cash and cash equivalents were $30.7 million, operating cash flow was $14.7 million, and the company repaid $8.7 million of debt, taking net leverage to 1.85x. Management did not give full-year fiscal 2027 guidance yet; it said full-year guidance will be provided at the next earnings call in November alongside first-half results, and it expects to keep deleveraging toward roughly 1.5x to 1.75x by fiscal year-end.

Kadia framed Mesa as a portfolio of durable, regulation-embedded businesses with “real and growing earnings power” but fixable execution problems. He spent much of his remarks on culture and operating discipline, saying he has been visiting sites, meeting employees and customers, and pushing a growth mindset plus faster decision-making. Strategically, he highlighted reallocated capital and mindshare toward SDC, BPD and other higher-return areas, a new BPD general manager, and an accelerated timeline for the next-generation Gyrolab platform, now expected to launch in fiscal 2028.

Sakys focused on the numbers: $60.1 million of revenue, 64.9% gross margin, $15 million of adjusted operating income, $30.7 million of cash, and $8.7 million of debt paydown. He said gross profit expansion was driven by lower third-party labor and consultants, supply chain efficiencies, and favorable mix, while operating expenses fell 5.6% from cost discipline. He also noted $14.7 million of operating cash flow, a $12.8 million year-over-year increase, and said the company is aiming to reduce net leverage from 1.85x toward 1.5x to 1.75x as it preserves financial flexibility.

Analysts pressed management on where it plans to focus after years of M&A, what execution fixes are being made, and whether there are costs tied to those fixes. Kadia answered that the main levers are talent changes, more senior operational focus, and a culture shift toward urgency and capital allocation discipline, while declining to pre-announce guidance or market assumptions before November. On SDC, management said the issue was delivery execution and late shipments, with backlog up about $1 million; Sakys said the company expects to continue clearing backlog but would not give a specific timeframe. A separate question on China drew a cautious response: Kadia said the market has structural issues and Mesa’s exposure has already declined significantly, with China now a small part of total revenue.